Randy's Recap- August 2nd
Aug 02, 2019
The grain markets were up slightly on Friday after a very long sharp movement lower. Since the middle of June, corn has dropped 64 cents soybeans down 80 cents, and wheat is down 60 cents. Improving weather and crop conditions, fund liquidation, poor exports, and unknown preventative plant acres has turned the market to the downside.
The next round of upside market moves may not come until harvest or later as we get the real data on how the 2019 crop finishes. The market still has potential to rally back to some good pricing opportunities. Don’t miss out on the second chance.
The August 12th WASDE report will resurvey acres and provide any updates from USDA as to possible acre, yield, and carryout changes from the July estimates.
Crop ratings for the corn and soybean have remained stable over the last few weeks showing ratings less than last year and below the five-year average. The crop is also delayed in development with a one to two-week lag. We will need continued good weather and some rain over the next 60 days to finish this crop.
China and the U.S. met this week in China and decided to meet again in September. We wait for a trade deal and China continues to buy very small amounts of ag commodities as good will gesture. Those small purchases could be enough for them to make it the next South American crop. Trump then tweeted on Thursday that tariffs will be added to 300 billion more China products at 10% starting September 1. The reason for the increase was due to lack of purchasing U.S. agricultural commodities. The market reacted sharply lower after the tweet. No closure to any trade deals so far this year.
MFP 2 payments details were released on July 25th with farmers receiving payments for 2019 planted acres. Farmer must sign up with FSA to receive payments. Most counties around our area will receive just over $50 per planted acre with half of the payments to be out in late August. The last 50% will possibly come in November and January if the price still merits the payments. Check Farmers.gov for all the details on MFP 2.
Our spring weather provided a very nice rally. The expectation and emotions of marketing every crop is very difficult. We would all like to hit the market highs but that is next to impossible. A solid marketing plan is key to be profitable on the farm. Risk can be taken off the table if sales are made at profitable levels. A plan with realistic targets can help take emotions out of the market and get sales on the books. It is never easy!
USDA Reports Calendar:
August 12: World and U.S. Supply and Demand Update and Acre Resurvey.
Have a great week! As always, Ride the Grain Train.