Headlines:

  • S. gets a “D+” grade for current state of infrastructure
    The American Society of Civil Engineers 2017 Report Card gives a D+ grade to American infrastructure. Mike Steenhoek, Executive Director of the Soy Transportation Coalition says that should concern American farmers. “It really provides significant exposure to and vulnerability to the quality or lack thereof our transportation system. If we don’t have that system working well, these farmers will not be able to benefit from international demand because we won’t be able to get it there,” says Steenhoek. The report gave grades of D or lower to American roads, inland waterways, dams and levees, while bridges received a C+. Steenhoek tells Brownfield American infrastructure is tied directly to farm profitability.
  • Australian sorghum harvest ‘heading for 23-year low’
    Australia’s sorghum harvest – which US officials, citing “near-record temperatures”, estimated at a 19-year low – may thanks be poised for further downgrades, in a dynamic which is offering some support for wheat prices. The US Department of Agriculture on Thursday slashed by 300,000 tonnes to 1.20m tonnes its estimate for sorghum production in 2016-17 by Australia, a key exporter of the grain, citing the setback from “unfavorable seasonal conditions over the past several weeks”. “Near-record temperatures further stressed the crop, which was already struggling from a lack of soil moisture,” boding ill for yields for the newly-started harvest, the USDA said. The conditions have also cut prospects for late-season sowings of the crop, which are now “expected to be minimal”.

Summary:

The US AG export value for the 1st third of the fiscal year (October – January) was reported at $53.8 billion. According to the USDA, that sets the US to outpace the prior fiscal year. The current figures are 16% higher than that of the same 4 months of the previous fiscal time horizon. Import were also higher but that increase was only 6% which translates into growing US surplus. Reports show a 63% increase in Corn exports, 29% increase in Soybean and 18% in Wheat.

The bearish undertone from the Supply and Demand report from yesterday carried over into today’s price action. Corn, Soybean and Wheat posted lower closes each day this week with the exception of Wheat that had a positive close on Monday. The movement that we are seeing is consistent with our projections over the past couple of month and we are looking for price to remain softer or at least sideways for the next few weeks. Today May Corn lost 2.25 points, May Beans was down 3.75 points and July Wheat was off 3.75 points.

Crude Oil is completely in line with our projections. The timeline for the start of current collapse matched up with the analysis we have been providing in our newsletter.