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The three m’s: market, maturity, mandates

September 5, 2019
By Alex Londerville - Columnist , Farm News

Pro Farmer released the results of their 2019 crop tour with a national average corn yield at 163.3bu/acre and a soybean yield of 46.1 bu/acre. When comparing these results to the August USDA estimates it is shown that it is 6.2 bushels less for corn and 2.4 bushels less for soybeans. Although this was a negative survey, grains found no support.

The latest crop condition ratings, as of August 25, showed a one-point improvement in corn ratings at 57 percent good/excellent.

Corn in the dough stage lags 16 percent behind the average 71 percent , which means there were 26 million acres yet to hit dough stage. Also, corn dented is now at 27 percent , which is 26 percent behind average.

Soybean ratings improved two points for the week reaching 56 percent good/excellent. Soybean blooming are now at 94 percent , only 5 percent behind average while soybean setting pods are 12 percent behind the average 79 percent , this means there are 16 million soybean acres that have not set pods. During the maturity period we must realize that the weather is a negative factor. Temperatures vary over the next 2-weeks but seem to be in a cool pattern. This should lengthen filling but thankfully no killing frosts are to be seen.

The FSA updated their crop acreage data as of August 22nd adding 821,000 acres to the certified corn acres. They also added 184,000 acres to the present total bringing it up to 11.395 million acres. The updated soybean acreage numbers show certified soybean acres 784,000 higher than compared to August 1st. Prevent plant acres for soybeans were decreased from 101,000 acres to 4.452 million acres.

China announced that the government is planning to put retaliatory tariffs in place against the United States goods. After trade tensions were at an all-time high, conversation has resumed again to solve these matters. A planned meeting in September is still on the calendar for the two leaders. Also, a trade agreement between Japan and the United States has been reached. Agriculture is said to be a major component of this agreement.

The Renewable Fuels Association stated that at least 15 ethanol plants nationwide have been idled or shut down completely in recent months. Experts predict that number will continue to increase if changes aren't made. Recent RFS waivers and poor export demand has dropped margins into negative territory for most plants. Sonny Perdue announced that changes are being proposed to increase demand for corn-based ethanol. In addition, President Trump posted on his Twitter page, "The farmers are going to be so happy when they see what we are doing for Ethanol, not even including E-15, year around, which is already done. It will be a giant package, get ready! At the same time I was able to save the small refineries from certain closing. Great for all!" Exact details for President Trump's plan to save Ethanol are unknown at the moment. This brings some light to a very dim Ethanol market.

Export demand continues to be a concern for traders. Near record corn crops for many of the larger corn producing countries this year has cut the demand for US corn. Experts are forecasting first quarter exports near 350 million bushels. This number decreased 280 million bushels from last year.

For more information, you may contact Alex Londerville at (515)-341-7040, or e-mail at alonderville@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Alex Londerville. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

 
 

 

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