BEANS, GRAINS LITTLE CHANGED OVERNIGHT; USDA LIKELY TO RAISE PLANTING ESTIMATES.
1. SOYBEANS, GRAINS LITTLE CHANGED AHEAD OF USDA OUTLOOK FORUM
Soybeans and grains were little changed overnight ahead of the U.S. Department of Agriculture’s annual Outlook Forum.
Several data points including outlooks for acreage, food prices, and farm income will be presented at the forum that starts today in Crystal City, Virginia.
Speakers at the event include Representative Mike Conway, the ag committee chairman for the House of Representatives, USDA Chief Economist Robert Johansson, and Iowa Governor Terry Branstad. The event is often traded on and could move markets should the agency’s projections sway too far from estimates.
Soybean futures for March delivery fell 3¢ to $10.19¾ a bushel overnight on the Chicago Board of Trade. Soy meal futures declined 70¢ to $338.80 a short ton, and soy oil lost 0.09¢t to 32.91¢ a pound.
Corn futures fell ½¢ to $3.70½ a bushel in Chicago.
Wheat futures for March delivery lost a penny to $4.55 a bushel. Kansas City wheat declined ½¢ to $4.71 a bushel.
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2. AGRICULTURE DEPARTMENT LIKELY TO RAISE PROJECTIONS ON PLANTING
The U.S. Department of Agriculture is expected to raise its outlook for planted acreage from November forecasts for corn and beans at its annual outlook forum today while lowering its projection for wheat.
Producers are likely to plant 91 million acres with corn and 88 million acres with soybeans this year, according to a Reuters poll. Wheat area is pegged at 47 million acres, analysts said.
The corn and bean forecasts are up from November projections of 90 million acres and 86 million acres, respectively, according to USDA data. While the forecasts for acreage are likely to be higher, the figures are still down 4% year over year for corn and 2% for soybeans, the government said.
Wheat area was pegged at 49 million acres in November, down 3% from the prior marketing year, according to USDA data.
The USDA also will have sessions on economic conditions in Brazil and Argentina and their impact on trade, a food price outlook, farm income outlook, and ag finances.
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3. EXTREMELY LARGE STORM MOVES INTO MIDWEST, RED-FLAG WARNINGS IN SOUTHERN PLAINS
The weather maps are quite busy this morning, as an extremely large storm stretches from Montana to southern Nebraska then back up into the Great Lakes, and wildfire risks increase in the Southern Plains.
A blizzard warning is in effect for counties in southeastern South Dakota, northeastern Nebraska, southwestern Minnesota, and northwestern Iowa, according to the National Weather Service.
A winter storm warning is in effect for the northern two thirds of Nebraska, the bottom half of South Dakota, and pretty much all of eastern Wyoming, the map shows. The warning also stretches northeast into central Wisconsin.
In the Southern Plains, a red-flag warning is in effect for western Kansas, pretty much all of Oklahoma, and all of west Texas from the panhandle to the Mexican border.
Extremely low humidity, strong winds, and high temperatures are creating tinderbox-like conditions, and fires are not recommended, according to the NWS.
Three months after it challenged China’s farm subsidies, the U.S. filed a new case at the World Trade Organization, charging that China has suppressed imports of U.S. corn, wheat, and rice. The “opaque and unpredictable management” of the tariff-rate quota (TRQ) system denied U.S. farmers $3.5 billion in sales in 2015, according to USDA.
TRQs allow a specified amount of merchandise to enter a country at reduced tariff rates during a window of time. The U.S. trade representative’s (USTR) office says China violated its WTO commitments by leaving unclear the application criteria for TRQ imports, by failing to provide notice of the tonnage eligible for TRQ treatment, by changing TRQ volumes, and by not explaining how it runs the program.
As part of entering WTO, China agreed to permit imports of 7.2 million tonnes of corn, 9.6 million tonnes of wheat, and 5.3 million tonnes of wheat at lower tariff rates. “Despite lower global prices that favor the importation of grains into China, the TRQs for each commodity persistently do not fill,” says the USTR.
WTO cases typically take 18 to 24 months to complete, including an appeal of a dispute panel decision. In the WTO case files in mid-September, the U.S. said China provided nearly $100 billion in excess support for corn, wheat, and rice in 2015 by setting domestic grain prices above world market prices. China has huge stockpiles of corn, wheat, and cotton.
