- China requests more talks before signing a “Phase 1” trade deal
- USDA slightly lowered corn and soybean production for 2019/20
- Hard freeze ends growing season in the western corn belt
- Crop progress delayed until tomorrow, Columbus Day
U.S.-China trade updates
- China wants further talks as soon as the end of October to hammer out the details of the “Phase 1” trade deal touted by President Trump before Chinese President Xi Jinping agrees to sign it, according to Bloomberg. Beijing is debating sending Vice Premier Liu He, their top negotiator, to finalize a written deal that could be signed by the presidents at the Asia Pacific Economic Cooperation summit next month. Other sources report that China is also asking for an additional removal of the planned December tariff hikes scheduled for later this week. In all, details of the verbal agreement reached last week are unclear. Trump said on Friday China may agree to purchase $40 billion to $50 billion in U.S. agricultural goods. That would be double the $24 billion China spent on American farm goods in 2017. These purchases will likely be contingent on removing substantial technical and political hurdles. Grain markets rallied on Trump’s announcement of possible Chinese purchases of U.S. ag products. The market has since declined on unclear next steps.
USDA Crop Report Recap
- This month’s 2019/20 U.S. corn outlook shows slightly lower production, reduced exports and corn used for ethanol, greater feed and residual use, and lower ending stocks. Corn production is forecast at 13.779 billion bushels, down 20 million as a decline in harvested area more than offsets an increased yield forecast. Corn supplies are forecast down sharply from last month on a reduced crop and lower beginning stocks based on the September 30 Grain Stocks Report. Exports are reduced 150 million bushels, reflecting smaller supplies and U.S. price competitiveness. Corn ending stocks for 2019/20 are lowered 261 million bushels. The season-average corn price received by producers is raised 20 cents to $3.80 per bushel.
- Soybean production is forecast at 3.6 billion bushels, down 83 million, mainly on lower yields. The soybean yield is projected at 46.9 bushels per acre, down 1 bushel from the September forecast. Harvested area is reduced slightly to 75.6 million acres. Soybean supplies for 2019/20 are forecast at 4.5 billion bushels down 175 million on lower production and beginning stocks.
- A hard freeze occurred across much of the western corn belt over the weekend, damaging immature corn and soybeans. Compared to the forecast from Friday, temperatures were a bit warmer than expected across western Minnesota and far eastern North Dakota, but were colder than expected across central Iowa, central and western Illinois, southeastern Nebraska, and northeastern Kansas. Subfreezing temperatures reached as far east as central Illinois and north central Indiana but were likely not quite cold enough to cause widespread crop damage in those areas. Heavy snowfall of up to 30” likely damaged unharvested winter wheat and soybeans across central and eastern North Dakota.
- Heavy snow favored the northern Plains over the weekend, with central and eastern North Dakota seeing the heaviest amounts of 12-24”, locally 30”. Rain favored the east central Midwest and the northern Delta, with the heaviest amounts favoring southern Illinois and southern Missouri. Drier weather is expected this week, particularly across the western corn belt. The drier weather will ease wetness and allow crop dry down and early harvesting to make better progress. Wet weather is expected across the central and eastern Midwest and the Delta this weekend and next week, however, which will likely slow down crop drying and harvesting.
- Delayed until tomorrow in observance of Columbus Day.
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