This week showed near $0.50 gains in DEC Corn over continued planting delays. By the beginning of next week, expect only 50.0% of the total crop to be planted at most, with significant production states severely behind due to rainfall that will almost certainly lead to prevented plant decisions (if the new MFP announcement doesn’t distort acreage, more on that later). NOV Beans and JUL Cotton saw sideways movement with Cotton gaining approximately 2.57% over the week, still well below the contract’s ‘pre-May tariff’ decline. Cattle on feed comes out this afternoon and if analysts undersold the numbers, there is a possibility of sideways movement or continued decline in the contracts as we pass the spring rallies and move into summer doldrums.
In other significant news this week, the Trump administration announced the new round of trade aid that is designed to support farmer incomes damaged by the ongoing trade dispute with China and others. Approximately $14.5 billion will be aimed at direct payments to farmers. This round of payments will be based on planted acreage in program eligible crops, which could influence the prevent plant decision going forward. Expect activity on these payments in late July/early August when acreage has been reported. The following crops will be eligible for a payment based on a county-designated rate; alfalfa hay, barley, canola, corn, crambe, dry peas, extra-long staple cotton, flaxseed, lentils, long-grain and medium-grain rice, mustard seed, dried beans, oats, peanuts, rapeseed, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, upland cotton and wheat.
Important Dates:
5/28/2019 – Crop Progress, NASS
Late July/Early August – New Round of MFP (either calculations or payments), FSA
In the News:
BEEF – U.S., Japan reach agreement on full access for beef
Farm Progress – USDA trade aid offers $16B in assistance