KSU Agriculture Today Radio Notes

Transcription

1 KSU Agriculture Today Radio Notes Daniel O Brien, Extension Agricultural Economist, Kansas State University For Radio Program to be aired 10:00-10:15 a.m., Friday, March 23, 2018 I. Grain Futures Closes, Changes & Carry on Thursday, March 22, 2018 Corn Futures Soybean Futures Kansas HRW Wheat Futures Month Close Change Carry /mo Month Close Change Carry /mo Month Close Change Carry /mo May 18 $3.76 $ May 18 $10.29 ¾ No Change --- May 18 $4.71 $ July 18 $3.84 ¼ $ $ July 18 $10.40 ¾ $ $ July 18 $4.90 $ $ Sept 18 $3.90 ½ $0.01 $ Aug 18 $10.42 ½ $ $ Sept 18 $5.08 ¼ $ $ Dec 18 $3.98 $ $ Sept 18 $10.31 $ No Carry Dec 18 $5.30 ¾ $ $ Mar 19 $4.05 ¼ $ $ Nov 18 $10.26 ¾ $ No Carry Mar 19 $5.45 ¼ $ $ May 19 $4.10 $ $ Jan 19 $10.30 ¼ $ $ May 19 $5.52 ¾ $ $ July 19 $4.14 $ $0.02 Mar 19 $10.28 ¼ $ No Carry July 19 $5.57 ½ $0.08 $ Sept 19 $4.03 ¾ $ No Carry May 19 $10.28 ¼ $ No Carry Sept 19 $5.68 ¾ $0.08 $ Price Soybean$ / Price Corn$ Ratios on March 22, 2018: Current Crop 2017/18 $MAY 2018 Soybeans $MAY 2018 Corn = $10.29 ¾ $3.76 = 2.74*** Next Crop 2018/19 $NOV 2018 Soybeans $DEC 2018 Corn = $10.26 ¾ $3.98 = P age

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5 II. U.S. & World Drought Monitor, Moisture Accumulations & Forecasts (Weekly Weather and Crop Bulletin) 5 P age

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9 III. Corn & Grain Sorghum Market Information Daily CME MAY 2018 Corn Futures Key Corn & Grain Sorghum Supply Demand Factors: U.S. Corn Exports: Neutral negative short term New Crop MY 2017/18 U.S. corn shipments with positive long term sales Weekly Export Shipments week of 3/8/2018 for MY 2017/18 = 55.4 mb (Neutral negative) vs 57.2 mb/wk needed to meet USDA s March 8 th projn of bb exports Total shipments through 3/8/2018 for MY 2017/18 = mb i.e., 35.8% of bb USDA projn with 51.9% of MY complete (27/52 weeks) Total sales through 3/8/2018 for new crop MY 2017/18 = bb (Positive) i.e., 77.2% of bb USDA projn w. 51.9% of MY complete (27/52 weeks) MAY Corn (Daily): $3.76 on Th., March 22, 2018 U.S. Grain Sorghum Exports: Bullish short term New Crop MY 2017/18 sorghum shipments & Positive long term sales Weekly Export Shipments week of 3/8/2018 for MY 2017/18 = 7.3 mb (Bullish) vs 4.3 mb/wk needed to meet USDA s March 8 th projn of 245 mb exports Total shipments through 3/8/2018 for MY 2017/18 = mb i.e., 55.0% of 245 mb USDA projn with 51.9% of MY complete (27/52 weeks) Total new sales through 3/8/2018 for new crop MY 2017/18 = mb i.e., 83.9% of 245 mb USDA projn w. 51.9% of MY complete (27/52 weeks) (Positive) Monthly Corn Futures Continuation Chart MAY Corn (Daily): $3.76 on Th., March 22, 2018 World & U.S. Corn Supply Demand Fundamentals Mktg Yr World % S/U U.S. % S/U U.S. $/bu U.S. Crop 2009/ % S/U 13.1% S/U $3.55 /bu bln bu 2010/ % S/U 8.7% S/U $5.18 /bu bln bu 2011/ % S/U 7.9% S/U $6.22 /bu bln bu 2012/ % S/U 7.4% S/U $6.89 /bu bln bu 2013/ % S/U 9.2% S/U $4.46 /bu bln bu 2014/ % S/U 12.6% S/U $3.70 /bu bln bu 2015/ % S/U 12.7% S/U $3.61 /bu bln bu 2016/ % S/U 15.7% S/U $3.36 /bu bln bu 2017/18 USDA 18.5% S/U 14.4% S/U $3.35 /bu bln bu 2018/19 USDA 14.1% S/U $3.40 /bu bln bu $2.90 $3.01 $3.76 U.S. Grain Sorghum Supply Demand Fundamentals 2015/ mln ac. 6.4% S/U $3.31 /bu 597 mln bu 2016/ mln ac. 6.8% S/U $2.79 /bu 480 mln bu 2017/18 USDA mln ac. 6.4% S/U $3.15 /bu 364 mln bu 2018/19 USDA mln ac. 9.5% S/U $3.30 /bu 384 mln bu 9 P age

10 Informa's Corn & Soybean Acreage Projections Usually Within 2% of USDA's Prospective Plantings. March 22, :51 am AgResource Plus Summary: This morning Informa released estimates for 2018 crop seedings. Soybean seedings were pegged at Mil Ac and corn was estimated to be Mil Ac. Informa's projections have a very slight tendency to over-estimate soybean and corn seedings. Soybeans: In those years that the soybean estimate was too high, the median error was 1.6%. Based on Informa's estimate of Mil Ac, that would equate to about 1.49 Mil Ac less - - or Mil Ac. In those years that the corn estimate was too high, the median error was also 1.6%. Corn: Based on Informa's estimate of Mil Ac, that would equate to about 1.38 Mil Ac less - - or Mil Ac. However, in all years, the corn projection came within 1.7% (above or below) of USDA's Prospective Plantings figures in two-thirds of the years. Similarly, in all years, the soybean projection came within 2.1% (above or below) of USDA's figures. USDA's Baseline projection was 90.0 Mil Ac for both soybeans and corn. Last week, Allendale pegged soybean seedings at 92.1 Mil Ac and corn seedings at Mil Ac..AgResource is projecting soybean seedings at 90.5 Mil Ac & corn seedings at 89.0 Mil Ac. 10 P age

11 IV. Wheat Market Outlook Daily MAY 2018 KS HRW Wheat Wheat Export Situation: U.S. All Wheat Exports: Negative short term Export Shipments with Positive longterm export prospects in New Crop MY 2017/18 total sales Weekly Export Shipments wk of 3/8/2018 for new crop MY 2017/18 = mb (Negative) vs 17.3 mb /wk needed to meet USDA s March 8 th projn of 925 mb exports Total shipments through 3/8/2018 for new crop MY 2017/18 = mb i.e., 70.15% of 925 mb USDA projn with 69.2% of MY complete (36/52 weeks) Total shipments + new sales thru 3/8/2018 for new crop MY 2017/18 = mb i.e., 88.1% of 925 mb USDA projn with 69.2% of MY complete (36/52 weeks) (Positive) U.S. Hard Red Winter (HRW) Wheat Exports: Negetive short term Shipments with Positive long term prospects in New Crop MY 2017/18 total sales MAY 2018 KS HRW Wheat (Daily): $4.71 on Th., March 22, 2018 Weekly Export Shipments wk of 3/8/2018 for new crop MY 2017/18 = 3.5 mb (Negetive) vs 6.8 mb /wk needed to meet USDA s March 8 th projn of 380 mb HRW wheat exports Total shipments through 3/8/2018 for new crop MY 2017/18 = mb i.e., 71.3% of 380 mb USDA HRW wheat exports with 69.2% of MY complete (36/52 weeks) Monthly Kansas HRW Wheat efutures Total shipments + new sales thru 3/8/2018 for new crop MY 2017/18 = mb i.e., 84.4% of 380 mb for HRW wheat w. 67.3% of MY complete (36/52 weeks) (Positive) MAY 2018 KS HRW Wheat (Daily): $4.71 on Th., March 22, 2018 Negative World & U.S. Wheat S/D Fundamentals Mktg Yr World % S/U World Crop U.S. % S/U U.S. $/bu U.S. Exports 2007/ % S/U mmt 13.2% S/U $6.48 /bu 1,263 mln bu 2008/ % S/U mmt 28.7% S/U $6.78 /bu 1,015 mln bu 2009/ % S/U mmt 48.6% S/U $4.87 /bu 879 mln bu 2010/ % S/U mmt 36.4% S/U $5.70 /bu 1,291 mln bu 2011/ % S/U mmt 33.4% S/U $7.24 /bu 1,051 mln bu 2012/ % S/U mmt 29.9% S/U $7.77 /bu 1,012 mln bu 2013/ % S/U mmt 24.2% S/U $6.87 /bu 1,176 mln bu 2014/ % S/U mmt 37.3% S/U $5.99 /bu 864 mln bu 2015/ % S/U mmt 50.0% S/U $4.89 /bu 778 mln bu 2016/ % S/U mmt 53.2% S/U $3.89 /bu 1,055 mln bu 2017/18 USDA 36.2% S/U mmt 50.6% S/U $4.65 /bu 925 mln bu $4.71 Monthly KS HRW Wheat Futures Continuation Chart $3.67 ¾ $ /19 USDA 46.6% S/U $4.60 /bu 950 mln bu 11 P age

12 V. Soybean Market Outlook Daily MAY 2018 Soybean Futures Daily MAY 2018 Soybeans $10.29 ¾ on Th., March 22, 2018 Key Soybean Supply Demand Issues: U.S. Soybean Exports: Neutral short term export shipments in New Crop MY 2017/18 and neutral positive long term total sales Weekly Export Shipments week of 3/8/2018 for MY 2017/18 = 33.1 mb (Neutral) vs 24.3 mb/wk needed to meet USDA s March 8 th projn of bb exports Total shipments through 3/8/2018 for MY 2017/18 = bb i.e., 70.6% of bb USDA projn with 51.9% of MY complete (27/52 weeks) Total sales through 3/8/2018 for New Crop MY 2017/18 = bb i.e., 87.7% of bb USDA projn w. 51.9% of MY complete (27/52 weeks) (Neutral Positive) Monthly Soybean efutures $7.76 ¼ Daily MAY 2018 Soybeans $10.29 ¾ on Th., March 22, 2018 $8.44 ¼ $10.30 U.S. Soybean Meal Exports: Bullish short term export shipments in New Crop MY 2017/18 and Bullish long term total sales Export Shipments for week of 3/8/2018 for New Crop MY 2017/18 = 272,200 mt (Bullish) vs 212,641 mt/wk needed to meet USDA s March 8 th projn of mmt exports Total shipments through 3/8/2018 for New Crop MY 2017/18 = mmt i.e., 45.2% of mmt USDA projn with 44.2% of MY complete (23/52 weeks) Total shipments & new sales (3/8/2018) for New Crop MY 2017/18 = mmt i.e., 73.9% of mmt USDA projn with 44.2% of MY complete (23/52 wks) (Bullish) World & U.S. Soybean Supply Demand Fundamentals Mktg Yr World % S/U World Crop U.S. % S/U U.S. $/bu U.S. Exports 2009/ % S/U mmt 4.5% S/U $ 9.59 /bu bln bu 2010/ % S/U mmt 6.6% S/U $11.30 /bu bln bu 2011/ % S/U mmt 5.4% S/U $12.50 /bu bln bu 2012/ % S/U mmt 4.5% S/U $14.40 /bu bln bu 2013/ % S/U mmt 2.6% S/U $13.00 /bu bln bu 2014/ % S/U mmt 4.9% S/U $10.10 /bu bln bu 2015/ % S/U mmt 5.0% S/U $ 8.95 /bu bln bu 2016/ % S/U mmt 7.2% S/U $ 9.47 /bu bln bu 2017/18 USDA 27.5% S/U mmt 13.1% S/U $ 9.30 /bu bln bu 2018/19 USDA 11.0% S/U $ 9.40 /bu bln bu 12 P age

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17 China to Retaliate Against U.S. Farming to Damage President Trump s Electoral Support OAN Newsroom UPDATED 8:25 AM PT Thurs. March 22, 2018 The government of Mainland China is preparing to retaliate against President Trump s trade restrictions by targeting U.S. exports in agricultural goods and high-end electronics. Chinese officials reportedly seek to hurt U.S. industries that employ a large proportion of Republican voters in hopes to take down President Trump. We have said many times, there are no winners in a trade war, stated Lu Kang, a spokesman for China s Foreign Ministry. It can only harm people this point, I believe, is needless to say, all parties can t count on luck to survive. The Chinese government s primary target is the so-called farm belt comprised of several red states in the Midwest and Western U.S. Officials in Beijing believe by imposing prohibitive imports duties on U.S. agricultural products, they will undermine the profitability of U.S. farmers, in turn, forcing them to vote against President Trump in the 2020 election. The products said to be likely targeted by China, include soybeans, sorghum, and live pigs. Chinese Foreign Ministry spokesperson Lu Kang said in a press briefing on Friday that the Pakistani Supreme Court verdict on the Panama Papers case is not going to affect bilateral ties between the two countries. We believe that China and the United States can use friendly consultations to resolve our disputes, Lu Kang continued. We have the good faith to do it this way, however, history shows trade wars are in nobody s interests, but China is willing to protect its legitimate rights if something happens we don t want to see. Additionally, the Chinese officials proposed slapping tariffs on the imports of advanced electronics and machinery as well as luxury goods from the U.S. On the other hand, Beijing is planning to offer U.S. companies a greater access to the Chinese market by loosening foreign ownership rules in the financial sector and dropping domestic-partnership regulations for foreign manufacturers. Chinese President Xi Jinping called this a stick-and-carrot approach. The U.S. agricultural sector has posted solid annual trade surpluses for over the last 50-years, showing resilience and flexibility throughout economic downturns and trade disputes in the past. According to the Farm Credit Administration, total U.S. agricultural exports stood just under $140 billion in 2015, with Mainland China being the number one destination accounting for $22.5 billion worth of goods. However, the following year Canada surpassed China as top destination for U.S. farming exports, bringing in over $20 billion worth of products. Treasury Secretary Steven Mnuchin testifies during a hearing before the House Appropriations subcommittee on budget on Capitol Hill in Washington. UCLA has released video showing the near-constant heckling of Mnuchin during a Feb. 26, 2018, moderated talk about the economy. (AP Photo/Carolyn Kaster, file) There is always a risk if we put tariffs on that other people will reciprocate, and there is a risk of a trade war, explained U.S. Treasury Secretary Steven Mnuchin. The president has said we are not afraid of getting into a trade war, given the size of our market, the size of our economy, and the fact that we have a big trade deficit. China s imports of U.S. agricultural goods declined by three billion dollars to just over $19 billion over the two-year period. Other top destinations for U.S. agricultural exports include Mexico, the E.U., and Japan, All have recently committed to tighter trade cooperation with the U.S. in exchange for exemptions from industrial metals tariffs. 17 P age

18 Some say China s retaliation might have a negative effect on the Trump administration as President Trump carried eight-out-of-10 largest soybean and hog-producing states in the 2016 election. Addressing the brewing concerns, Vice President Mike Pence reiterated the administration s commitment to opening new markets for U.S. farming exports, and advancing the farm legislation in Congress aimed at boosting farm efficiency and sustainability. 18 P age