Wheat, Weather, and Wishes: July 4th Edition
Recent USDA and harvest reports suggest good news for the wheat market! Take a minute to read the updates on the Farm Bill, market, and weather outlooks -- all pertinent to your business...
2018 Farm Bill - As indicated in our tweet last week, the Senate overwhelming passed their version of the farm bill 86 to 11. There were not any amendments to cut crop insurance premium support or private sector delivery. Next conferees will be appointed by the House and Senate, the conference committee will begin to meet and negotiate the final language of the 2018 Farm Bill. Ag leaders aim to have the bill finalized prior to expiration of the current bill September 30, 2018. As a reminder and a picture is worth many words, the slice of crop insurance in the farm bill pie...
2018 production reporting, 2019 crop year - When reporting your 2018 production for the 2019 crop year there will be new reporting requirements by RMA. The disposition of the commodity will now be required - farm stored, commercial storage, fed, etc. Not a big deal, but not something you've had to report nor information we've had to gather previously. We discuss this in greater detail at our fall update meetings later this summer.
Markets - USDA released it's monthly report last Friday confirming much of the intended acres report released in March, for only the second time in history (1983), there are more bean acres than corn planted in the US for 2018. Inventories of beans and corn are up from last year; whereas wheat inventories are down, but 'disappearance' was down 17% from the same quarter last year.
- As expected, spring wheat acreage is up significantly which will put pressure on the DNS (Minneapolis) market; DNS acres are up more than 500,000 acres.
- Wheat harvest is flying along through the southern plains, most of KS is complete - USDA pegs the 2018 harvest at the smallest winter wheat crop since 2002. Though bushels and acres are down, the quality has been very good to now, 12+ percent protein and test weights above 60 pounds. This will definitely help with moving old, low quality bushels on hand. World wheat bushels continue to shrink across Europe - Russia and Ukraine have been lower their estimates on a weekly basis, most recently France has done the same with their projected wheat harvest. All good news to help shore up the price of wheat.
- Early indications of harvest results in our region are good - above average bushels, HRW making protein and decent test weights.
Trade - The on again, off again sanctions and retaliations have cycled to another '...we're close to agreement.' only to be followed by another list of commodities or products named for additional tariffs. Canada has announced US products to face additional tariffs in reference to the steel tariffs imposed earlier. This coming Friday is the looming deadline with China over the last round of yes/no rhetoric. The Chinese are the number one buyer of US spring wheat. The latest tweet or news release from President Trump is that a 'major, fair trade deal' is eminent. Let's hope so, we cannot endure soft prices coupled with limited market access.
Weather - As indicated and alluded to last week, weather will have a pronounced impact on the markets. July is critical time for corn and the high pressure ridge is in place, duration is the variable that forecasts don't agree. The biggest impact will be the lack of cool down at night, where temperatures are predicted to remain as high as the 70s and 80s...not good.
First map is 6/10 day forecast, followed by an 8/14 day forecast - minimal change expected thru the middle of the month.
The region of southern IA, southeastern NE, eastern KS and MO, already in a moisture stressed environment, they will realize a yield impact from this type of weather pattern.
I wish all a safe and happy 4th of July, Happy Birthday America!
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