August 31, 2015

Grain Prices Thumped

Prices plunged in the grain and oilseed sector on Wednesday after USDA raised its outlook for U.S. crop production and yields this fall.

The Ag Department pegged corn output this autumn at 13.686 billion bushels on yields of 168.8 bushels per acre.

USDA estimated soybean production at 3.916 billion bushels on yields of 46.9 bushels an acre.

Some traders called the numbers ‘a shocker’. Adverse weather in parts of the Farm Belt this summer had led to expectations that the government would trim both its corn and soybean projections.

Relentless rains in June helped fuel a spike in futures prices, but analysts say it now looks like weather concerns will move to the backburner – if not eliminated altogether.

To get a handle on the numbers, analysts say you can examine production from west to east across the nation’s midsection. Weather was conducive for corn and soybean fields in western Corn Belt states like Iowa, while Mother Nature wasn’t as kind in eastern areas like Indiana.

Folks are said to be having a hard time gauging total production when the far western belt was so good, and the far eastern belt is so bad.

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Crop Conditions Unchanged Heading Into Crop Production Reports

Grain traders and farmers alike are looking ahead to tomorrow’s USDA report, the first that will use actual field conditions in its yield projections. Those conditions have been a matter of debate for some time, but according to yesterday’s weekly Crop Condition ratings, we’ve haven’t seen much change. USDA Meteorologist Brad Rippey:

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When it comes to corn

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The most impressive crop right now continues to be spring wheat, and harvest is moving right along:

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USDA’s reports tomorrow will be Crop Production and World Supply and Demand Estimates, both of which will be released at 11 am central time.

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Canada and Mexico Ready To Debate Retaliatory Trade Against U.S.

Canada and Mexico may be the U.Ss closet geographic neighbors, but both are miles away from the U.S. in terms of how they view Country of Origin labeling. Unless Congress can repeal the rule, all three countries are scheduled to present their findings of economic damage in front of World Trade Organizaiton next month, after which the World Trade Organization will rule on the permitted level of trade retaliation Canada and Mexico may undertake. Cattlemen Association’s Director of Government and International Relations John Masswohl will be one of the presenters and he says Canada will stick by their claims of nearly $3 billion in damages.

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U.S. Trade Representative Michael Froman has says the real possible damages incurred by Canada and Mexico is closer to $ 91 million than $3 billion Canada alone is claiming. Masswohl says the U.S. isn’t giving a realistic damage estimate

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The U.S. House has already passed a bill fully repealing COOL, but the U.S. Senate is undecided. A group of 14 Senators including North Dakota Senator John HOeven have proposed a voluntary program. Masswohl says that won’t be good enough given the standards he’s read

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The Senate appears set to take up the issue when they return September 8th.

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