Citizens Weekly Newsletter February 15, 2019

Published 5 months ago



· Much of this week was spent focusing on China trade talks while we worked to get caught up on data after the government shutdown, and digest what last week’s report information could mean long-term.


· Last Friday’s information was relatively absent of surprises. While corn yield and overall production came in a bit lower than anticipated the reduction in usage kept overall carryout in line with trader expectations ahead of the report. What was most interesting was the by-state breakdown in stocks both on and off the farm as those numbers will likely have implication in cash values paid in the coming months.


· When looking at on farm holdings, we saw relatively large reductions year over year in several states. The biggest being in Minnesota where on farm stocks were down 170 mbu from the year prior, and in Iowa where on farm stocks were 120 mbu lower. Increases were seen in Indiana, up 45 mbu from December 2017 and Ohio, up 90 mbu. Illinois and Nebraska were seen as unchanged, while here in Michigan on farm corn stocks are estimated to be 10 mbu higher than a year ago.


· Off farm stocks, or commercial corn holdings saw limited changes from the year prior. The biggest reductions were again seen in Minnesota, down 62 mbu and Iowa, down 83 mbu, with limited gains seen elsewhere.


· The change in soybean stocks was most interesting with on-farm holdings up 450 mbu from a year ago. The larger crop made for larger commercial holdings as well.


· Soybean supply and demand figures saw some relatively minor adjustments. The USDA lowered production a bit, in both yield and harvested acreage, increased crush demand while reducing export demand by another 25 mbu—a lower figure than many were expecting ahead of the report.


· Wheat numbers came in relatively close to expectations. Weather limited fall wheat planting across the country with winter wheat seedings coming in lower than last year and the lowest since 1909.


· Aside from the USDA numbers we saw trader attention remain focused on China trade talks. This week high level talks were held in Beijing, wrapping up with what many hope will be a framework that will help complete talks sooner than later. Early on in the week many news groups reported the White House would be open to extending the March 1st deadline put in place several months ago.


· This would be a direct turn away from the hardline stance President Trump had taken early on in the trade truce. However, many feel that if enough progress is made and a deal is days away the extension would be necessary to maintain good faith.


· Based on a statement released by the White House early Friday, a lot of progress was made during the week of talks, but “much work” remains before the March 1st deadline. Talks will resume in DC early next week.


· We also saw an agreement made between President Trump and Congress in budget dealings, keeping the government open. With so much work left to do to get information flow back up to date after the last shut down many are breathing a sigh of relief a deal has been made.


· Looking ahead traders will start to discuss what the planting outlook could be for 2019. The USDA will give its first initial outlook next week, but the information will be from a strictly economic approach, different than its survey-based figures that will be released late next month. At this point talk has begun that corn acres may gain as many acres year over year as first thought. In fact, some are saying there is a very real possibility corn carryout could come in lower than soybean carryout in the 19/20 crop year.

· The markets will be closed Monday in observance of President’s Day.

Agribusiness
Angie Setzer Charlotte, MI
5 months ago
https://agfuse.com/article/citizens-weekly-newsletter-february-15-2019
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Angie Setzer
Angie Setzer

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