Midwest Marketing Solutions
Prevented plant claims paid
According to USDA Undersecretary for Farm Production and Conservation Bill Northey, numerous prevented plant claims have already been paid out.
“I think those claims have climbed over the $100 million mark so far and we expect that probably to pass the $1 billion mark at some point as you look at the acres that are likely to be in the prevented plant area,” he said.
The NRCS has also announced special cost-share funding for farmers to plant cover crops in eight states. Those eight states include Minnesota and South Dakota. These cost-share dollars are available through the EQIP program.
Acreage reporting deadline extended
The USDA has extended the acreage reporting deadline to July 22 for spring planted crops in twelve states.
The twelve states include Arkansas, Illinois, Indiana, Iowa, Michigan, Missouri, Minnesota, Ohio, Wisconsin, Kentucky, North Dakota, and Tennessee.
Farm Service Agency (FSA) administrator Richard Fordyce says the new deadline is to help accommodate farmers who have been battling the weather.
“Farmers were still trying to make planting decisions up until just a few days ago,” he said. “If they hadn’t made a decision whether they were going to be able to plant for not plant they weren’t attempting to make an acreage report.”
Corn closed the week $.16 higher. Last week, private exporters reported sale of 104,100 mts of corn to Panama for 2019/20.
In the weekly export inspections report; U.S. corn exports, for the week ended 7/04/19, were 27.7 million bushels (mb), at the top end of market expectations and were up from the previous week’s very poor exports of 11.2 mb.
Corn exports were still below the roughly 35.3 mb/week estimated it needs to average through the end of August in order to reach the USDA’s 2.200 billion bushels (bb).
In the weekly crop progress/conditions report; U.S. corn conditions 57 percent good/excellent versus 57 percent expected, 56 percent last week, 75 percent last year.
Iowa was down 3 percent to 61 percent good/excellent; Illinois down 5 percent to 37 percent; Indiana down 1 percent to 38 percent good/excellent; Minnesota up 2 percent to 60 percent good/excellent and Missouri down 1 percent to 28 percent good/excellent. South Dakota improved 4 percent to 62 percent good/excellent with North Dakota unchanged at 79 percent good/excellent.
In the monthly WASDE report, the USDA surprised the trade by raising U.S. corn ending stocks for both old and new crop. Old crop exports were lowered by 100 mb to 2.100 bb, lowered feed/residual by 25 mb and left ethanol usage unchanged at 5.45 bb. This resulted in an increase of ending stock stocks to 2.340 bb for 2018/19.
For 2019/20; the USDA used the surveyed acreage number of 91.7 million acres and left yields unchanged from last month at 166 bpa. With the increased carry in stocks and minimal demand changes; new crop corn carryout is forecast at 2.010 bb. This was well above pre-report trade estimates, however the trade quickly discounted the news as the USDA is resurveying farmers.
Strategy and outlook
With funds now going net long due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies. July corn has failed at successive challenges of major weekly resistance.
Soybeans closed the week $.38 higher. Last week, private exporters did not report any export sales.
U.S. soybean exports of 27.8 mb were slightly lower than 26.5 mb last week and were slightly above last year’s same-week exports of 24.5 mb. More importantly, they were slightly below the roughly 29.4 mb/week needed to average through the end of August in order to reach the USDA’s 1.700 bb export projection.
U.S. soybean conditions 53 percent good/excellent versus 55 percent expected, 54 percent last week, 71 percent last year.
U.S. soybean planting 96 percent complete versus 96 percent expected, 92 percent last week, 100 percent last year and 99 percent average.
Iowa conditions were unchanged at 64 percent good/excellent; Illinois lost 6 percent to 38 percent good/excellent; Indiana was unchanged at 37 percent good/excellent; Minnesota down 1 percent to 61 percent good/excellent; Missouri down 3 percent to 35 percent good/excellent with South Dakota down 2 percent to 52 percent good/excellent and North Dakota up 2 percent to 69 percent.
Soybeans had a largely uneventful report with minimal changes made to the old crop balance sheets. Total usage for 2018/19 was increased by 20 mb; resulting in ending stocks of 1.050 bb. Exports were left unchanged while crush was lowered by 15 mb and seed by 5 mb with residual usage up 41 mb.
For the 2019/20 marketing year, in addition to the lower beginning stocks, yields were lowered by 1 bpa to 48.5 bpa and planted acreage were lowered by 4.6 million, in accordance with the planting intentions report. This resulted in lower production by 305 mb and 325 mb less supply, offset by 75 mb reduction in exports. This lowered forecasted ending stocks from 1.045 bb to 795 mb. While it is a step in the right direction, it would be nearly double the 2nd largest carryover figure in history.
Strategy and outlook
With funds covering shorts due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies.
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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