Headlines:
Watch for Corn Put Selling Opportunity
Most U.S. farmers understand President Donald Trump’s trade row with China is necessary to get the biggest buyer of U.S. agriculture commodities to change its behavior, says Agriculture Secretary Sonny Perdue. Perdue visited agricultural hub Chicago after commodity prices fell sharply this month on escalated tariff threats from Beijing and Washington. “They understand that China has not been a fair player,” Perdue said in a speech to a trade show for the fresh produce industry. He said Trump had authorized him to protect farmers from economic harm caused by trade fights and he hoped to have a plan in place by the time farmers begin their fall harvest if no resolution has been reached. “We will not allow agriculture producers to bear the brunt of China’s retaliation as we defend our own interests as a nation,” Perdue said. Perdue said at a news conference the Commodity Credit Corp (CCC) could be one of the major tools used in any plan to compensate farmers hurt by the trade fight. The CCC has broad authority to make loans and direct payments to U.S. growers when prices for corn, soybeans, wheat and other agricultural goods are low. Congress lifted certain restrictions on the U.S. agriculture secretary’s authority to use CCC funds in the Bipartisan Budget Act of 2018. In an opinion piece published in USA Today on Monday, Perdue said he would not tip his hand about what the U.S. Department of Agriculture planned to do. The economic impact on farmers changes daily based on market conditions, Perdue said.
U.S. EPA Proposes 2019 Biofuels Requirements at 19.88 Bln Gallons
The U.S. Environmental Protection Agency on Tuesday proposed setting a biofuels blending mandate of 19.88 billion gallons for 2019 under the Renewable Fuel Standard, up from the current year and in line with expectations, the agency said. The agency also said it is considering a number of measures to bring some transparency to the compliance credit market, such as eliminating speculators and forcing parties to disclose their credit position if they accumulate a certain percentage. The blending mandate would be up 3 percent from a 2018 requirement of 19.29 billion gallons and identical to figures that Reuters and other news outlets reported last week. The biofuels industry applauded the increase but criticized the lack of a plan to address the agency’s expansion of program exemptions granted to smaller refineries. The EPA, under administrator Scott Pruitt, has roughly tripled the number of exemptions granted to small refiners, angering Midwest farmers and their legislative backers who say he is effectively lowering the mandate unless he forces larger refiners to make up the difference. Pruitt was considering a plan to force large refiners to blend extra volumes to compensate for the hardship waiver exemptions for small refiners, but the plan was scrapped after an outcry from the oil industry. “The ethanol number isn’t worth the paper it’s written on so long as Scott Pruitt is granting small refinery exemptions left and right,” said Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. The EPA proposal would leave the target for conventional biofuel, mostly corn-based ethanol, at 15 billion gallons, the agency said.
Summary:
Volatility has toned down some for the grain markets ahead of the USDA Crop Acreage Report. Traders also have their eyes directed on the potential impact of the heavy rain that is forecasted to fall in the Midwest this week. Following the rain there is high heat forecasted for this weekend. This Crop Acreage Report has a history of moving the markets. Soybean prices opened higher but failed to hold at those levels. News continues to be the same as we approach harvesting a big crop with the US and China seemingly unwavering in the tariff stances. Brazil’s farmers are said to have sold 80% of their 2017-18 bean crop and 10-15% of their 2018-19 Soybean crop. There is plenty of wheat and not a lot of places to go with it. So, it remains to be seen if cycle projections for one more rally will be able to prevail over the supply side narrative. Crude Oil picked up where it left off on Friday rallying more than $2 on the day.
