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August 27, 2018 | Monday Mycotoxin And Crop Report | | Views: 470

Monday Mycotoxin & Crop Report for August 27

This week we cover new mycotoxin reports in corn and barley

Monday Mycotoxin & Crop Report for August 27

For more information, please visit foodsafety.neogen.com. Neogen Corporation takes great care to ensure the integrity of the data we collect from many sources across the country. As these data can vary widely, they should NOT be considered typical of all grain harvested. The mycotoxin levels we report are intended to assist our industry partners in developing their risk assessment programs. Detecting problems before commingling or processing can help avoid quality issues and financial losses.

August 24, 2018 | Grain Hedge Insights | Kevin McNew | Views: 234

Weekly Cash Commentary

Cash Comments for week ending August 24

Weekly Cash Commentary

Another big sell-off on spot bean basis as many buyers collapsed their spot offering to par with fall delivery. On the week, corn basis was unchanged while soybean basis sank 6 cents a bushel across the country.

Soybeans along the river were hammered this week thanks to higher barge freight and weakening Gulf bids. On the week, river terminals saw a 21-cent plunge in spot basis. Along with spot soy basis, new-crop bids continue to feel the pressure of an impending record large harvest backed by ample old-crop supplies. The table below shows what the average new-crop basis is by state and how that compares to basis at harvest in 2017. Aside from Michigan, most areas are seeing double-digit losses on new-crop basis. Especially hard hit are river terminals where high barge freight and lower export interest is putting basis levels on the defensive for the Fall. This year more than most will be a time for farmers to store soybeans to capture better basis in the Dec/Jan window.

 

New-crop Soybean Basis for 2018 vs Actual Soybean Basis in 2017

For end users, corn was mostly unchanged at ethanol plants. There were a few plants in MN/IA that gave a better basis by the end of the week. Soy plants were mostly under pressure this week giving up 4 cents on average.

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

August 24, 2018 | Views on the News | | Views: 449

U.S. Tariffs in the Global Landscape

Information to help understand the complex trade policy decisions being made

U.S. Tariffs in the Global Landscape

Information regarding tariff rates and talk of trade wars have been pouring into the media cycle lately. With agriculture at the tip of the spear in this war, it is important to understand the complex trade policy decisions being made. This article is the first in a weekly series that will profile different commodities and the tariffs they face.

Figure 1 illustrates the comparison between gross domestic product per capita and the average tariff a country charges incoming agricultural products. The United States has an estimated $59,500 GDP per capita and an average most favored nation tariff rate of 5.2% for agricultural products. MFN tariffs are what countries promise to impose on imports from other members of the World Trade Organization unless the country is part of a preferential trade agreement (such as a free trade area or customs union).

In contrast, countries with a substantially lower GDP per capita, like India and Ghana, have a higher MFN tariff of 32.7% and 20.2%, respectively. One of our largest trading partners, China, maintains an average tariff on agricultural products of 15.2%. Another of our largest trading partners, the European Union, charges an average of 11.1% on agricultural products.

Canada and Mexico, our counterparts in the North American Free Trade Agreement, currently charge average MFN tariffs of 15.6% and 14.6%, respectively, on agricultural products from WTO members who are not free trade agreement partners. However, because of NAFTA, the preferential average tariff on U.S. agricultural products into Canada and Mexico is 6.9% and 0%, respectively.

Healthy trade relationships based on reciprocal exchange build countries. Maintaining these relationships not only strengthens the global economy but also boosts the welfare of every American.

 

 

 

In 2017, the U.S. imported $368 million worth of soybeans, charging a 0% tariff, and exported $21.5 billion worth of soybeans. The net trade balance on U.S. soybeans equates to over a $21 billion surplus.

Buying over 60% of the world’s production last year, China is the world’s largest importer of soybeans and the U.S.’s largest customer. The current tariff China charges on soybeans is 3%. However, with retaliatory tariffs of 25%, the U.S. is now charged 28%.

Free trade agreements like NAFTA encourage trade between nations by lowering the tariff on soybeans to 0%. Mexico is our second-largest soybean customer and charges the agreed-upon 0% tariff, instead of their average tariff of 7.5% on soybeans. Free trade agreements continue to boost trade by lowering barriers between nations. In 2017, the U.S. exported $2.5 billion worth of soybeans to FTA partners, up 11% from 2016. Figure 2. takes a closer look at soybean tariffs.

 

Information provided by the American Farm Bureau Federation.

 

Contact:
Megan Nelson
Economic Analyst
(202) 406-3629
megann@fb.org
 
Veronica Nigh
Economist
(202) 406-3622
veronican@fb.org

August 24, 2018 | Grain Hedge Insights | Kevin McNew | Views: 351

Pro Farmer Day 4 Results

Iowa corn yields were second highest of the 7 states included on the 2018 Pro Farmer crop tour, only behind Illinois

Pro Farmer Day 4 Results

Pro Farmer Day 4 Shows Improved Yields for Iowa, Drops for Minnesota Corn

Day 4 of the 2018 Pro Farmer crop tour finished in Iowa and Minnesota yesterday. Their corn yield estimate came in at 188.2 bpa, up from last year’s 179.79 bpa. Soybeans also improved from 1092.92 pods in a 3x3 square in 2017 to 1208.99 pods this year. Minnesota saw an improved soybean estimate of 1090.47 pods, compared to last year’s Pro Farmer estimate of 1019.96. Corn yield fell, however, from 191.54 bpa in 2017 to 178.67 bpa this year. Iowa corn yields were the second highest of the 7 states included on the 2018 Pro Farmer crop tour, only behind Illinois at 192.63 bpa. Minnesota corn yields were dead last, primarily due to heavy rains that have delayed maturity of the crop.

Export Sales Announcement

Private exporters reported to the U.S. Department of Agriculture export sales of 146,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.

USDA Will Announce Details of Farmer Aid Package on Monday

USDA Secretary Sonny Perdue stated that the detail of the $12 billion aid package for farmers affected by the ongoing Trade War. Previously, Secretary Perdue said that around $7-$8 billion would come in the form of direct cash payments to farmers, but this proposal is under review by the Office of Management and Budget. Perdue also said that $200 million of the aid package would go towards developing new markets and opening up trade for agricultural products. Earlier this week, Agri-Pulse reported that the preliminary amount for cash payments would be $1.65 per bushel for soybeans and $0.01 per bushel for corn. This would equal $7.6 billion in aid for soybeans by themselves. Secretary Perdue did not confirm these prices.

Heavy Rains Overnight Have Caused Flooding In N Missouri, More Rain Expected For Northern Midwest

Last night, nearly 5 inches of rain fell over parts of northern Missouri, according to the National Weather Service. The NWS also warns that flash flooding may soon occur, with another inch of rain in the forecast. Areas of E Minnesota, Wisconsin, Illinois, and Michigan can expect 1-3 inches of rain over the next 5 days.

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

August 23, 2018 | Grain Hedge Insights | Kevin McNew | Views: 306

New Tariffs in Place on Chinese Goods

Trade talks continue between the two countries today

New Tariffs in Place on Chinese Goods

New Tariffs In Place On Chinese Goods Despite U.S.-China Talks

At 12:01 a.m. Thursday morning, tariffs on $16 billion worth of Chinese products were put in place. This is the second leg of the initial $50 billion of tariffs, with the first portion put in effect back in early July. Chinese trade officials led by Vice Minister of Commerce Wang Shouwen had met with U.S. Under Secretary of the Treasury for International Affairs David Malpass yesterday and will again today. This new round of tariffs targets higher tech products such as semiconductors, industrial chemicals, and plastics.

Ethanol Production Increases, Stocks Rise to 5-Month High

For the week ending on Aug 17, ethanol production was reported at 1.073 million barrels per day by the Energy Information Administration. This is a slight increase of only 1,000 barrels per day from last week. Stockpiles of the biofuel rose to a five month high of 23.259 million barrels. That’s an increase of 242,000 barrels from last week and the highest since March 16, 2018.

Grain Supplies in Russia May Fall To 6 Year Low By June 30, 2019

SovEcon, a private consulting firm based out of Moscow, reports that grain stocks could fall to levels last seen in 2007/08. SovEcon lowered their total grain ending stocks to 10.1 MMT, down from 13.2 MMT and slashing its grain production by 4.3 MMT to 109.6 MMT. With higher wheat prices and the Russia ruble trading at the lowest level since April 2016 following new US sanctions, Russian wheat exports would typically speed up, but rumors remain that grain export limits and export taxes might be enacted in attempt to keep domestic grain prices lower.

Wheat Export Sales Disappoint, Corn and Beans Make Strong Showing

Wheat sales for the 2018/19 crop came in at 239,800 MT, down 70% from last week and down 49% from the 4 week average. Large purchasers were Iraq, Yemen, Colombia, and Mexico. Old crop corn sales came in below expectations and 49% lower than last week at 173,400 MT but new crop sales were reported at 1,054,600 MT. Top buying countries were Unknown destinations, Mexico, and Egypt. Old crop soybean sales were reported at the low end of analysts’ range but 14% higher than last week at 152,700 MT. New crop beans came in at 1,148,600 MT, with the major buyers being Mexico, Unknown destinations, and Taiwan.

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

August 22, 2018 | Coach’s Corner | Greg Martinelli | Views: 579

Weather & Politics: Sell 30% More By Not Talking About Them

Small talk is killing your sales productivity

Weather & Politics: Sell 30% More By Not Talking About Them

As we met with Sid in his farm shop, the conversation started out as so many before did. Rain! We talked about how much rain he got the night or days before. Not a bad topic as it is relevant to how his crops are doing and how much hay he will get off his land. However, the conversation turned worse. We spent the next twenty minutes or more talking about how much rain other farmers in the area got. Friends that farm nearby had received more than he did or less than he did. Some farms right next to each other received different amounts.

As the conversation raged on as to who got rain, I was nearing exhaustion just listening to the discussion. On this farm call, I was riding with Carry an agronomy salesperson to help improve his selling skills. It was all set to be a promising call. Carry explained the details around the prospect we were going to call on. Sid has 1200 acres of corn and beans as well as 300 acres of hay he puts up. Carry made a farm call on Sid several months ago and made a little progress, but the sales call ended the same way many of them do. “I’m pretty happy where I’m at. I don’t think I’m going to do anything right away,” Sid had previously told Carry.

We were back today and I was excited to see Carry in action as he tried to uncover needs, position his agronomy products and then close on selling Sid. However, my mind was racing as the clock kept ticking and our conversation was stuck on how someone else got more rain than Sid did.

Then it happened. The conversation finally ran its course and I thought we can’t possibly talk about rain any longer. “Now Carry,” I was screaming inside my head. “Now start in on the topics you wanted to cover.” Unfortunately, it went from bad to worse. Somehow, we got on the subject of politics and tariffs. This round of small talk raged for the next 30 minutes and included local politics as well.    Finally, after a brutal hour of small talk, Sid said, “Well, we could talk about this all day and never get anything solved. What do you have for me today?” Coming out of my small-talk coma, I couldn’t believe we were actually going to get down to the business at hand.

However, guess what happened. Sid looked at his phone and said he was running late to another meeting. Carry tried desperately to jam in a presentation on several agronomy products. No questions. No discovery. No uncovered needs. Just a wild shot in the dark at presenting on several products.

Now guess if we Sid bought anything. I’m sure you guessed correctly. Sid shut Carry down with the reply, “Thanks, I’ll take a look at it and let you know.” Sid never called in the next few days nor weeks. It was going to take another sales call to go back out and get down to the business of selling Sid.

I am thoroughly convinced a salesperson can increase their productivity by 30% if they can figure out a way to cut the small talk down. I know there is a need to connect and build on the relationship and I know that weather and politics are top of mind for many producers on most days. However, neither you nor the producer can do anything about either of them. So, spending 50-75% of your sales call talking about them is killing your productivity.

What to do?

My personal theory on proportion of small talk to productive sales discussion in a sales call is a max of 10%. If you have a one-hour sales call scheduled, my opinion is about 5 minutes at most on small talk. I consider small talk, those topics you can’t do anything about: rain, politics, gossip, etc.

Find a way that you are comfortable with to shift the topic back to why you are calling on that producer that day. Imagine your producer asked, “Why are you here today?”

After you do your five minutes of small talk and you get done with the topics you agreed to discuss, then you can spend the whole day talking about trade wars and tariffs. My guess is that once you get done with the topics you agreed to meet on, your prospect will be ready to let you leave the farm so he can get back to work.


Join us at Coach’s Corner every other week, where Greg Martinelli offers sales coaching tips for the Ag Sales Professional.

August 22, 2018 | Grain Hedge Insights | Kevin McNew | Views: 250

More Rain for Nebraska and Iowa

Areas along the Missouri River in E Nebraska and W Iowa were issued flood warnings and advisories earlier this week

More Rain for Nebraska and Iowa

Fears of Russian Export Limits Pass, Wheat Retreats

Rumors that the Russian government would restrict grain exports seemed to have subsided this week, leading to Sep Chicago SRW and KC HRW to sell off nearly 40 cents each.  Russia is the world’s largest exporter of wheat and has seen a poor crop this year due to poor growing conditions. Earlier today, French consultant Agritel projects that Russian wheat exports could drop to as low as 31.5 MMT, compared to the previous year’s record of 42 MMT.

Pro Farmer Crop Tour 2018 Reports from Nebraska and Indiana

Sampling more than 500 corn and soybean plants each, Pro Farmer has estimated a corn yield of 182.33 bpa and and a soybean number of 1311.87 pods per 9 square feet in Indiana. This is a 6.5% increase for corn and 12.2% for beans from Pro Farmer’s Indiana tour last year. Recent moisture in the Eastern Corn Belt could benefit beans even further. After testing more than 300 samples, Pro Farmer is issuing a 179.17 bpa corn yield and 1299.08 pods per 9 square feet for soybeans in Nebraska. Their soybean estimate is up nearly 15% from the previous year, thanks to improved weed control from Nebraska farmers. Corn in Nebraska is 38% dented and Pro Farmer anticipates that some farmers in the state could be harvesting corn in as little as two weeks.

More Rain Iin Forecast for E Nebraska And W Iowa, Missouri to Get Good Moisture

Areas along the Missouri River in E Nebraska and W Iowa that were issued flood warnings and advisories earlier this week could expect another few inches of rain later tonight, according to the National Weather Service.

These isolated storms could also result in hail and high winds later into Thursday and Friday. Nearly the entire state of Missouri is forecast to see some rain over the next week, particularly the western portion and into E Kansas. This area has struggled with drought throughout the summer.

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

August 21, 2018 | Grain Hedge Insights | Kevin McNew | Views: 553

USDA Crop Progress Report Cuts Corn, Soybean Crop Conditions

Overall national good to excellent percentage for corn was dropped 2% to 68%

USDA Crop Progress Report Cuts Corn, Soybean Crop Conditions

USDA Crop Progress Report Cuts Both Corn and Soybean Crop Conditions

The overall national good to excellent percentage for corn was dropped 2% to 68%. Significant reductions in G/E percentages can be found in North Dakota (-9%), South Dakota (-4%), and Colorado (-6%). Condition cuts in the Plains states were partially offset but increases in states in the Eastern Corn Belt like Michigan (+3%) and Pennsylvania (+2%). Corn in the U.S. is also 44% dented, compared to the 5 year average of 26%. Soybean conditions also fell a percentage point to 65% good to excellent. The Dakotas continue to struggle here, losing 8% in North Dakota and 6% in South Dakota, while the East improves. Total U.S. soybeans are pegged at 91% setting pods, up from the 5 year average of 83%. The USDA also reports that winter wheat is 97% harvested, just a tad behind the 5 year average of 97% complete. Spring wheat conditions fell by 1% to 74% G/E and the crop is currently 60% harvested, well above the 5 year average of 44%.

Export Sales Announcement

Private exporters reported to the U.S. Department of Agriculture export sales of 250,000 metric tons of soybean cake and meal for delivery to unknown destinations during the 2018/2019 marketing year.

President Trump Does Not Have High Hopes For This Week’s China Talks

In an interview with Reuters, President Trump stated that he does not have a time table for a resolution to the ongoing Trade War between China and the United States. Tomorrow, trade officials from China are sitting down with US officials to restart dialogue between the two countries. On Thursday at 12:01 AM EST, another $16 billion worth of tariffs on Chinese goods is set to go in place. Earlier this week, President Trump again accused China of manipulating their currency as a countermeasure to having to pay tariffs on US goods.

Flood Warnings and Advisories Remain In Place In E Nebraska, W Iowa

Areas in Nebraska and Iowa along the Missouri River are under flood advisories and warnings following heavy rains over the past 2 days. Omaha saw near-record high rainfall and the National Weather Service reports that the Missouri River is flooding on both the Iowa and Nebraska side. The NWS also reports that the Missouri River is 26.4 feet, compared to the flood stage level of 26 feet. Storms are also expected further south into NW Missouri, where some areas may experience flooding over the next 24 hours.

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

August 20, 2018 | Grain Hedge Insights | Kevin McNew | Views: 300

Renewed Optimism for Soybeans

Soybeans traded higher in overnight session on hopes that China and U.S. can resolve trade issues this week

Renewed Optimism for Soybeans

Speculators Reduce Corn, Bean Net Short Positions, Remain Buyers of Wheat

For the week ending on Aug 14, managed money shrank their net short position for corn by around 7800 to 60,139 contracts. Money managers also reduced their net short position to 62,234 contracts, compared to 63,066 last week. Renewed US-China trade talks may have spurred some optimism amongst hedge funds as to ending the soybean tariffs. Managed money remains bullish for both KC and Chicago wheat amid production problems in Australia, Europe, and Russia. For Chi SRW, they are net long by 65,226 contracts, down 1,125 contracts from last week. Money managers are also 61,421 contracts net long for KC HRW, compared to 53,732 last week.

Renewed Optimism for Soybeans as U.S. and China Trade Officials Meet this Week

Nov soybeans traded higher in the overnight session on hopes that China and the United States will be able to take steps towards resolving trade issues this week. Vice Minister of Commerce Wang Shouwen will meet with US Under Secretary of the Treasury for International Affairs David Malpass on Wednesday and Thursday (Aug 22-23) of this week. Aug 23 remains the date for another $16 billion worth of tariffs on Chinese goods to go in place.

Flash Flood Warnings in Place for Missouri River Valley Between Iowa And Nebraska

Last night, nearly 3 inches of rain fell in a short period of time, causing flash flooding in areas of Nebraska and Iowa along the Missouri River. The National Weather Service expects another 1-3 inches of rain to fall again today, exasperating flooding issues.

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

August 20, 2018 | Monday Mycotoxin And Crop Report | | Views: 587

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