Headlines:
Nebraska Remains in State of Emergency
An Emergency Declaration for the state of Nebraska continues, as the state suffers from deadly flooding in many of its primary waterways, including the Niobrara and Platte Rivers. Nebraska Governor Pete Ricketts declared a statewide emergency on March 12. On March 16, Ricketts, U.S. Senator Ben Sasse, and State Senators visited Fremont, Niobrara, and Lynch as they surveyed the impact of historic flooding. They joined members of the Nebraska National Guard to get an aerial view of flooding impact as they traveled to thank Red Cross volunteers in Fremont, address a community meeting in Niobrara, and receive a briefing in Lynch. In the last week, Nebraska has experienced historic flooding and extreme weather conditions in nearly every region of the state. The Nebraska Emergency Management Agency (NEMA) has been working with local, state, and federal officials to provide assistance to the counties in need while gauging the total damage and impact. Rickets and Sasse have contacted President Donald Trump in an effort to have the state declared a national emergency, which would allow it to obtain Federal Emergency Management Agency assistance.
Big Acreage Shift Needed To Spark Corn, Soybean Market Rally
Uncertainty on trade issues and the subsequent price movements associated with speculation on the topic added a degree of difficulty to acreage decisions this year. The March 29 Prospective Plantings report will provide the initial indication of potential acreage allotments for spring crops and sets the tone for production potential as we move into planting season. Considerations of planted acreage this spring begins with analyzing the amount of acreage available for planting. During the 2016 – 2018 period, total acreage for principal crops tracked by the USDA came in at 319, 318.3, and 319.6 million acres, respectively. When one considers the Conservation Reserve Program (CRP) and prevent plant acres as well, acreage totaled 346.3, 344.3, and 345.0 million acres. Over the same period, corn, soybean, and wheat acreage combined came in at 227.6, 226.4, and 226.1 million acres respectively. Current USDA projections for the three crops indicates 224 million acres planted. The lower acreage estimate implies either a drop in principal crop acreage or an increase in acreage for other crops in 2019. A potential reduction in planted acres will not materialize through an increase in CRP acres this year. Through January, CRP acreage enrollment is reported at 22.4 million acres, down from the 23.5 million acres last year. The government shutdown and uncertainty in CRP acreage enrollment deadlines led to enrollments coming in below the 24 million acres set forth as the statutory limit. Lower CRP acreage enrollment in 2019 may be negligible when considering acreage planted in major spring crops. While the impact of lower CRP acreage looks to be minimal, spring weather conditions appear set to have a significant influence on the acreage of spring-planted crops.
Summary:
Investors will be watching the speculative trading activity, in the coming weeks as they look for potential indications of strength to enter the markets. Funds are short a record amount of corn futures, in addition to a sizeable amount of soybeans and wheat. As funds work to cover their huge short positions, the grain markets may in turn deliver on an upside rally ahead of the USDA reports that are due for release at the end of the month on March 29th. Last week a low came in early and the high for the week came in on Friday. The market could be due for a small pull back to start the week. If a low is made in the middle of the week followed by a rally in to Friday, that would be an indication of potential strength to come. Corn was down slightly on the day losing 1.50 cents, beans was off 3.75 cents and wheat gave up 5 cents.
