corn against blue skies

Weekly Commentary: U.S. market continues to face many problems with demand


Quick glance:

  • Corn conditions increased by 1%, soybeans remain unchanged
  • U.S. and Chinese negotiators meeting in Shanghai to resume trade talks once again, expectations for progress are low
  • Cooler temperatures are expected for much of the Corn Belt
  • Today is the first day to sign up for USDA's Market Facilitation Program (MFP)

Crop Ratings

  • Corn increased one percent to 58% good to excellent from 57%. Soybeans remained unchanged at 54 percent. Both crops aren’t improving, increasing concerns about crop development.  


  • Grain markets are in a watch-and-wait phase as traders await new data on crop production and demand.  Corn has been declining over the last couple weeks on neutral weather and no additional information to fuel the prior bull market rally. The next key information release will be the August USDA report which is set to include a revision of prior crop estimates. 


  • Below average temperatures are expected across the corn belt for the next two weeks, preventing heat stress and favoring corn pollination. Rainfall is expected for the area, but it’s expected to be less than average. More rain will still be needed for crop development.  


  • U.S. farm commodities continue to suffer with Chinese purchases at a halt as the U.S.- China trade war drags on. The two countries are meeting in Shanghai this week for their first in-person talks since a G20 truce last month. Expectations for progress during the two-day Shanghai meeting are low.
  • Reuters reports China and Russia are increasing soybean trade with each other as China looks to diversify its soybean supply away from the U.S. Russia plans to also sell pork to China having recently sold poultry to Chinese buyers.
  • Chinese state media said on Sunday the U.S. has shipped several million tonnes of soybeans to China since the two countries’ leaders met in June, although U.S. government data shows that the volume was much less. The U.S.-China trade war has curbed U.S. crop exports to China, with soybean sales falling sharply.

Market Facilitation Program Payouts

  • Today is the first day to sign up for USDA’s latest Market Facilitation Program (MFP). While it’s unclear how USDA developed the county payment rates – which range from $15-150 per acre – USDA says they will release the formula in the next few weeks to provide clarity. USDA has not provided the list of countries whose tariffs were factored into the calculations. We do know that nearly 3,000 counties will receive payments, with the highest rates going to heavy cotton and sorghum production. Only 22 counties across Alabama, Georgia, Texas, Mississippi, Arizona, and New Mexico, will receive the maximum payment. The Corn Belt states were deemed big beneficiaries under the 2018 program (although biased toward bean production) will have payments falling in the largest part of the bell curve. Farmers are anticipating variations in payments for counties where farmers planted cover crops on prevent plant acres, while non-cover crop prevent plant acreage will not qualify for MFP payment.