Headlines:

  • Farmer Confidence Surges, is Highest Since Trade War Began
    With Trump tariff payments boosting Corn Belt farm revenue, farmer confidence shot to its highest level since last June, just before the trade war began against China, said the monthly Ag Economy Barometer published by Purdue University. Producers polled by Purdue said they expect ag exports to increase in the years ahead, an indirect sign they expect a beneficial resolution with China. President Trump has set a March 1 deadline for a Sino-U.S. agreement or he will order a steep increase, to 25%, in tariffs on $200 billion worth of Chinese products. China retaliated against previous U.S. tariffs by setting high duties on U.S. goods, including farm exports. The most prominent ag target is soybeans. China used to buy 1 in 3 bushels of the U.S. crop. Sales have plummeted, although China said it would buy 5 million tonnes of the oilseed this month while bilateral negotiations are held. Purdue said its ag barometer, a gauge of farmer sentiment, climbed 16 points in January, its first survey of producers since the administration announced a second round of Trump tariff payments, officially the Market Facilitation Program, and since the enactment of the 2018 farm law. “Both of [them] appear to have helped boost farmer sentiment,” said Purdue. As of Monday, the USDA had sent $6.41 billion in cash to producers, with an additional $1.2 billion in payments possible from claims that were being processed. Nearly 805,000 applications have been submitted. February 14 is the deadline to apply. As expected, soybeans are the leading commodity for payments, and the top states for payments, Illinois and Iowa, are the premiere soybean producers.
  • Soybeans Lower Thursday as Rain Falls in Brazil
    Soybeans were lower in early trading Thursday as rains in Brazil ease concerns about the South American crop. Some scattered showers are falling in northern Brazil, reaching about half of the driest corn and soybean areas in northeastern areas, Commodity Weather Group said in a report. Relief also is expected to spread through remaining dry spots in central Brazil in the middle of next week, which should aid corn and sugar. Precipitation also is expected in far southern Brazil into Paraguay, which will limit concerns for soybeans, at least for now, the forecaster said. There’s still some dry weather in Sao Paulo and eastern Mato Grosso do Sul, CWG said. Crop areas in Brazil have been suffering from hot, dry weather for much of the past couple of months, threatening crop production. Excessive rain in Argentina, meanwhile, also is causing concern. Prices were lower despite sales of soybeans to China reported the past two days. On Wednesday, the USDA said exporters sold 523,000 metric tons to the Asian nation and 182,000 tons to unknown buyers. On Tuesday, the USDA said China had purchased 2.6 million tons for delivery in the marketing year that ends on August 31, though it’s unclear when the sales occurred. Sales of 274,000 tons to unknown destinations also were reported on Tuesday.

Summary:

US and China trade officials plan to meet next week in Beijing to further trade discussions. The former Fed Chair Janet Yellen said she thinks the Federal Reserve may consider a cut in interest rates this year if global economic growth starts to slowdown. She also went on to say that she believed that the US economy otherwise was solid. The USDA will release its regular February Supply and Demand report tomorrow along with the delayed January reports. Markets had been quiet all week but it sold off some ahead of the reports that will include the December quarterly stocks report, the winter wheat planting intentions, and the final corn/soybean production yield estimate. The average trade estimate projections for tomorrow’s final US corn yield is 177.9 bpa versus the Nov yield that was at 178.9 bpa. Export sales for 12/27 corn came in at 503,000 tons. The average trade estimate projections for tomorrow’s final US soybean yield is 51.8 bpa versus the Nov yield using 52.1 bpa. Export sales for 12/27 for soybeans were 1,051,000 tons. The wheat spreads in Chicago and KC gave back a little ground trading lower on the day.