AM Comments – Ag the Political Football 111519


US- china agreement critical to turning US Ag into a demand driven market. Kudlow and Ross both say the agreement is in final stages and “will get made in all likelihood.” This is the critical driver for markets over next 3-6 months.


US-China agreement is expected due to real effects of current tariffs showing up in economic data for many countries including US. But the implications of no deal ae staggering as Trump has threatened significant increases. Some say he would double down – and go to 1 Trillion in tariffs which would likely cause PRC currency to decline sharply, along with Asia Minor, and cripple trade between the US and China. Neither country wants that.


USMCA has gained the votes it needs to pass. But needs to get called to a vote. Politics will be 100% of that decision.


US Acreage in 2020 will likely increase significantly as some of the 19ma PP this year comes back into production. All initial studies suggest producers should be selling $4.00 2020 corn. The only significant offsets to this outlook are – a USDA set aside program, a major adverse weather event, a demand encouraging trade deal. The 1st 2 are unlikely.


Farmers still have about 5 bil bu of corn in the field (~1/3 pf the crop). MN has temporarily halted propane delivery to farms due to potential residential needs. So far we are hearinig good yields but test weights are – 46-59. TW could be a significant issue that needs to be monitored.


US cash markets in corn and beans continue to be strong. Corn and bean values increase in Eastern and central – southern belt. Where is the supply?


AgMarket.Net recommendations –

2019 Corn 65% sold (80% if you ran some across the scale). Selling strong basis and replacing with March re-ownership to maintain 35% long

2020 corn 20% sold around 406

2019 Beans 60% sold 9.46

2020 Beans 15% 9.60


Bill Biedermann


815-893-7443 o

815-404-1917 c