Corn is up 6 and soybeans are up 11 to open the day after traders got acreage estimates from the Ag outlook forum. Corn planted acres for this coming year were estimated at 92 million acres which is up 3.3% from last year’s 89.1 million acres. Soybean acres are estimated at 85.0 million acres which is down 4.7% from last year’s 89.2 million acres. While corn acres are up 2.9 million acres, they are below what traders have been expecting for this coming year. While todays data is giving live to the markets, it is important to keep in mind that these estimates do not include farmer surveys like the March 29th report will.
Optimism and rumors that China is proposing to buy $30 billion a year of US agriculture products as a possible trade deal between the two countries. The offer to buy the extra farm products would be part of the memorandum of understanding (MOU) under discussion by US and Chinese negotiators in Washington and would be on top of pre-trade war levels and continue for the period covered by the memorandum. The 6 MOU’s include general agreements on: 1. Forced Technology & Cyber Theft, 2. IP Protection/Rights, 3. Services, 4. Currency, 5. Non-tariff barriers to trade and 6. Agriculture.
Producer selling across the Midwest has been steady for the last month despite stagnant prices on the CBOT. Some areas of the country are seeing basis levels narrow as weather has hampered delivery of grain. Other areas of the country are seeing basis levels widen or bids totally removed as end users are bought up. My projection is that we will see more of the latter in our area as end users continue to get bought up and on farm/commercial stocks remain high. I would advise producers to make cash sales or at least lock in basis on any old crop that remains uncommitted.
Have a Safe Day!