The US Trade policies have roiled markets for the last couple months. Grains have collapsed as weather improved and demand fell apart as a result of these policies. First on the export side and then on domestic announcements of ethanol closures.
Trumps tweets Friday afternoon (I emailed them out Friday) were very disturbing but have since been smoothed out and clarified. Trump was not telling or “herby ordering immediate” anything…he was suggesting that US companies seek other suppliers and consider moving back to the US. Thank God they clarified that. Weekend Whitehouse interviews were also clear to include statements that Trump is a Free Trader. And again, that is good to know since he has so often said how he loves Tariffs, how they are good for American, and how we are filling our coffers. Non the less, Trumps statement rattled even the conservative republicans and Free Traders (I think you all know that includes me).
This week:
Allow the market a day to continue the deluge of mis interpretation of what Trump meant. The balance of the week should find support. #1 weather. There is NO Freeze forecast so I don’t want to alarm you. However, the cool down is doing what for your corn? Allowing huge fill and test weight on everything that is in dent. True….but it is not the Dent corn we are concerned for. Cool weather is struggling to get you more than 10 GDU’s per day. How many does your farm need to hit BL let alone get to 18%. The REAL Problem is only 15 was in dent last week so maybe 27% is in dent now (we’ll see Monday afternoon). Even worse – 45% of the US corn crop was not even in DOUGH stage as of last week. So MAYBE we move from 55 dough to 70%, leaving 30% still in milk or less. Well, based on USDA’s unrealistic 13.9 crop forecast, that means that 4.17 Bil Bu probably still in milk stage. We’ll see what the conditions report says Monday afternoon. Now here is the forecast:
6-10 Day
8-14 Day
From Drew:
- Northwestern Russia will experience frost and a few light freezes in the coming week
- Coolest weather is expected Wednesday into the weekend when lows in the 30s Fahrenheit are expected to be common
- Most of the freezes will be light, but they will impact areas from northwestern Russia into the Volga-Vyatsk and northern Ural Mountain region
- Some crop damage is possible, but some of the impacted region experienced damaging frost and light freezes in mid-August which may minimize the impact of additional cold in the same areas
- Patches of frost are expected in Canada’s Prairies late this week, but early indications do not suggest a killing frost or freeze event and most areas will be warm enough to avoid any serious impact
- US – Degree-day accumulations will be near normal, but with crops being behind in their development greater warmth is needed for improved heat units and faster coarse grain maturation rates
So the weather should provide a smidge of support for this reason – odds are extremely high that the crop will get smaller, not bigger.
ProFarmer tour was the first boots in the field. They estimated the crop at 13.358 and 3.497, down 543 mil bu and down 184 mil bu respectively. This is not a OMG number. It is realistic based on the potential crop as PF Stated. And they stated that not all these fields will make it. We agree that immature corn will result in a lot of test weight loss and some fields will be a ZERO. No one knows and neither do we what the weather will do. But we do know that even if we are able to harvest 100% of the acres, there will be test weight loss and a lot of costs drying.
US Japan news – you can read what you want. Japan use to be the corn farmers #1 client. So they can buy when they want to. We will see. We need their business badly. For sure this is not bearish but we are not sure if it is bullish enough on its own.
US-EU, US- USMCA, US-S Korea maybe we will see some better news here as commentaries say trump needs to make deals in order to get re-elected. YEP
US-China – as of now 50% odds they meet in Washington. So don’t hold your breath.
US Dollar – Trump wants a cheaper dollar. That might be hard right now as him and Powell are not golfing buddies. Watch the charts. A reversal would be supportive to corn.
Technicals – Corn needs to hold 360 and get above 375 and381 to signal a turn.
Nov beans – need to hold 852 or 843. A close above 882 would be the first signal of a reversal.
So if you had to sum this up in once statement – demand has been demolished….but the crop is getting smaller and stocks will be closer to 1.5 than 2.18.
We will update our Monday Movie night with a video
Bill Biedermann
AgMarket.Net
815-893-7443 o
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