Congress must deal with the U.S. debt limit this week or the government will eventually run out money. In 2015, Congress suspended the debt ceiling through last week – March 15.
With that deadline upon us, lawmakers must increase the current debt limit or suspend its implementation by midweek. Without that action, the U.S. Treasury will have no additional borrowing authority. The Trump Administration said it will use extraordinary measures to avoid default.
The National Milk Producers Federation has approved a series of recommended changes to the dairy Margin Protection Program that restores several elements that were first proposed in the 2014 farm bill.
NMPF said the recommendations range from changing the way feed costs are calculated to providing farmers greater flexibility in signing up for coverage and using other risk management tools.
The four-point plan was developed by NMPF’s Economic Policy Committee and reflects feedback from dairy farmers, economists and members of Congress.
In his state of the farmers Union address, National Farmers Union President Roger Johnson talked about several bigger issues that may get in the way of the next farm bill. One of those issues is consolidation. Johnson doesn’t want any of the proposed big mergers in agribusiness to be approved.
He said our economy is becoming concentrated. It’s a function that very few people with lots of wealth and lots of people with little wealth. Our view is we need the most robust competition possible in the marketplace. That’s when we get the fairest price for what we have to sell and that’s where we will pay the fairest cost for the things we have to buy.
Farm credit merger
Three major farm credit organizations have received preliminary approval for their merger from the Farm Credit Administration. This merger will include AgStar Financial Services,
which is now based in Mankato, Minnesota; 1st Farm Credit Services, with headquarters in Normal, Illinois; and Badgerland Financial, based in Prairie du Sac, Wisconsin.
The three lenders will now hold a stockholder vote. If approved, the merger will take effect July 1. The headquarters for the new entity will be in Sun Prairie, Wisconsin.
Rod Hebrink, who now leads AgStar Financial Services, will be president and chief executive officer for the new organization. Another merger has been proposed involving AgCountry Farm Credit Services and United FCS. This merger, which is also expected to take effect this summer, is still awaiting approval from the Farm Credit Administration.
Expects slow planting start
Although farmers were anxious for planting when February surprised the Midwest with warm weather, planting in the Corn Belt won’t be kicking in early in 2017, at least according to meteorologist Dale Mohler. “I think it will be a little bit of a slow start and a bit of a challenge early on because it will be a little cooler and a little wetter than normal in late March and early April,” Mohler said. Soil temperatures are the issue and those stem from what’s coming, weather-wise.
Corn closed the week 2.5 cents higher.
Last week, private exporters announced sale of 120,000 metric tons of corn to Mexico.
Corn sales were strong at 58 million bushels, the best total in seven weeks. Annual sales are up 51 percent from a year ago.
Ethanol production was supportive once again as production topped 1 million barrels per day for the 20th consecutive week.
The weekly ethanol data report showed that production improved to 1.045 million barrels per day. The increase
of 23,000 bpd was the biggest increase since October.
Highs for corn are likely to be scored during the spring planting time frame or very early summer as values rally to secure enough planted acres to meet record demand.
Informa updated 2017 U.S.-planted area forecasts – estimating corn acreage at 90.8 million acres versus 90.5 million acres last month. That’s down 3.2 million since last year.
NASS reports USDA planting intentions survey for March 31 report was conducted from Feb. 27 through March 18.
Strategy and outlook: A rally into weekly resistance was a great time to sell inventory, look to re-own on support as commercials have been big sellers lately.
Soybeans closed the week 6.5 cents lower.
Last week, private exporters reported a sale of 240,000 mt of soybeans to an unknown destination.
Soybeans sales were 25.6 mb, not a bad number, but it was the sixth lowest sale of the year.
Annual soybean sales are up 23 percent from last year.
The February NOPA crush report came in at only 142.8 mb, well below the average estimate of 146.1 mb and below last year’s crush figure of 146.2 mb.
From January, this was a major slowdown as January saw 160.6 mb crushed.
RJ O’Brien noted that the average daily crush rate fell to a five-month low at 5.1 mb. Soybean oil stocks increased to 142.79 mb, larger than last month’s 1.728 mb and much
larger than last month’s 1.655 mb.
Informa updated 2017 U.S. planted area forecasts- estimating soybean acreage at 88.7 million versus 86.5 ma last month. That’s up 7.4 ma versuss last year.
If wet growing conditions materialize this spring as forecast, corn will rally to buy acres as the market anticipate farmers will shift corn acres to soybeans. A very wet forecast will limit the upside for soybeans.
Strategy and outlook: Maintain re-ownership strategies into the summer months.
This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.
Brian Hoops can be reached at (605) 660-1155.
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