Headlines:
- Budget Proposal ‘Will Kill Crop Insurance,’ Says Insurance Expert
For farmers who like crop insurance, the outlook could be getting worse. Two years ago, then President Barack Obama unveiled plans in his budget to trim subsidies for the harvest price option of revenue protection. That was the biggest part of a projected savings of about $18 billion over 10 years. At the time, it was pronounced “dead on arrival” by Senate Agriculture Committee Chair Pat Roberts of Kansas. This week, President Donald Trump’s budget for the 2018 federal fiscal year that starts next October has an even bigger haircut of $29 billion over a decade. That would be accomplished by eliminating harvest price coverage altogether in revenue protection and by capping premium subsidies at $40,000 per farmer. This time, Roberts and House Agriculture Committee chair Mike Conaway of Texas didn’t call the budget dead. Instead, they promised to “fight to ensure farmers have a strong safety net” in the next Farm Bill in a joint statement released Tuesday.
- Crop prices ‘poised for gains’, says Monsanto, flagging need for yield growth
Crop prices are poised for gains, Monsanto’s Mac Marshall said, flagging that even after a series of bumper world harvests, inventories are closer to food crisis levels than to the gluts which pressed values to turn-of-the-century lows. Mr. Marshall, lead in strategic planning and communication at Monsanto, was quoted as saying that he was “long-term bullish on prices” of crops such as corn, soybeans and wheat. “We will start to see some appreciation on the price side.” The forecast – which echoed a forecast on Wednesday to the conference from BlackRock commodities expert Skye Macpherson – reflected a pace of stock building which appeared relatively weak, given that the world had enjoyed four successive strong harvests.
Summary:
September Crude Oil futures reached our price objective of 52 a couple days ago. For a couple of weeks, we have been projected 52 as a minimum price objective. In our newsletter on Monday and in our Weekly Market Update from yesterday we pointed out that this contract was due for a correction. We had a time and price
factor coming together along with it being over bought. The correction occurred right on time and it dropped even faster than we anticipated. Weakness in Crude Oil futures coupled with a bounce in the US Dollar made it tough for the grain and Soybean markets to rally today. All three markets finished weaker today. Corn was down 2 cents, Soybean down 9.75 cents and Wheat down 1.75 cents. Fresh demand for Corn helped to mitigate what might otherwise have been a bigger loss for Corn. Planting delays and rainy conditions should translate into strength for Corn prices but the large old crop supply has been keeping the potential for a major price advance at bay. As we head into the three-day Memorial Holiday weekend, limited trading activity may be in the cards for tomorrow.
