In this file:
· Mexican Senator Champions Bill to Stop U.S. Corn Shipments
· South Africa Opens Market to U.S. Corn
· Weekly Outlook: 2017 Soybean Prospects
· Winter Wheat Now in Greatest Demand as Livestock Feed
Mexican Senator Champions Bill to Stop U.S. Corn Shipments
BY Chris Clayton, DTN/Progressive Farmer
via KTIC (NE) - February 14, 2017
A Mexican senator at a rally on Sunday proposed that Mexico stop buying U.S. corn in retaliation for some of President Donald Trump’s stances on our southern neighbors.
Mexico is the top market for U.S. corn exports with Mexican buyers importing nearly 28% of all U.S. corn sent to foreign markets in the 2015-16 marketing year.
CNN reported Sunday during a rally that Sen. Armando Rios Piter, “who leads a congressional committee on foreign affairs, says he will introduce a bill this week where Mexico will buy corn from Brazil and Argentina instead of the United States.”
Such saber rattling hasn’t affected corn markets yet. Instead, corn has been rallying since the end of January. On the futures markets, the December 2017 corn contract has moved up 14 cents since the end of January and touched $4 a bushel briefly on Monday before settling at $3.99 a bushel.
While Trump has been focused on Japan and Canada in the past few days, rallies against Trump and his policies were held across Mexico over the weekend. In the Mexican Congress, Rios Piter has become a vocal critic of Trump and his deportation policies. He wrote a column Monday calling for better treatment and protection for undocumented immigrants in the U.S.
“Today, we are facing not only a diplomatic crisis, but also a major crisis of human rights, which we must face with unity, intelligence, strategy and determination,” Rios Piter wrote.
Regarding corn, Rios Piter told CNN, “I’m going to send a bill for the corn that we are buying in the Midwest and … change to Brazil or Argentina.”
Tom Sleight, president and chief executive officer of the U.S. Grains Council, said in a phone interview with DTN that the Mexican senator’s comments were more about getting attention than actually advancing legislation. Still, the U.S. Grains Council leaders are meeting this week in Panama and they have already heard about the Mexican senator’s comments and proposal...
South Africa Opens Market to U.S. Corn
Radio 570 WNAX (SD)
Feb 14, 2017
Last December, South Africa opened its market to United States corn for the first time in a decade by lifting biotech restrictions that had kept the market closed. This month the South African government issued 15 permits authorizing the importation of 1.3 million metric tons of U.S. corn. South Dakota Corn Grower’s President Keith Alverson says that’s a positive move for America’s corn growers.
He credits the hard work of the U.S. Grains Council in helping open that market for the U.S. corn industry.
South Africa’s feed industry was forced to import corn in 2015 and 2016 as a result of a drought in the country. Alverson says the U.S. being a reliable supplier was ready to meet their needs...
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Weekly Outlook: 2017 Soybean Prospects
Todd Hubbs, Department of Agricultural and Consumer Economics, University of Illinois
farmdoc daily - February 13, 2017
As we approach the midway point of the 2016-17 marketing year, planting and new crop marketing decisions are being made for the next marketing year. This is the time of year to discuss 2017-18 soybean marketing year prospects. The development of soybean prices over the next year depends on the prospective size of the 2017 U.S. crop and the prospects for stocks at the end of the 2016-17 marketing year.
Soybean prices have remained relatively high despite large U.S. and world soybean supplies. On February 9, the latest release of USDA projections for the 2016-17 marketing year maintained the balance sheet numbers from the previous month. At 420 million bushels, forecast stocks of U.S. soybeans at the end of the current marketing year represent the highest ending stocks estimation since the 2006-07 marketing year. Additionally, the current projection for South American soybean production is at 6.374 billion bushels. The prospect of 2016-17 marketing year ending stocks decreasing over the remainder of the marketing year is dependent on strong export numbers. Increased export potential is contingent on the soybean crops currently produced in Brazil and Argentina. While the possibility of surpassing the 2.05 billion bushel USDA export projection for soybeans exists, the caution exhibited by the USDA in maintaining the export number at its current level is warranted.
Building expectations about the 2017 U.S. soybean production prospects begin with planted acreage. Current expectations for soybean planted acreage encompass a wide range of possibilities. Some observers place planted acreage levels at 89 million acres or greater. U.S. soybean plantings in 2016 came in at a record 83.4 million acres, which were a 700 thousand acre increase over 2015 and slightly above the 83.3 million acres planted in 2014. Congressional Budget Office (CBO) projections for baseline farm programs released last month set planted acreage at 86.5 million acres. Current USDA long-term baseline projections have 2017 planted acreage at 85.5 million acres. Multiple factors currently drive the expectation of a large increase in soybean acreage. Hard red winter wheat seedings are down 3.7 million acres. A reduction in soft spring wheat acreage is also possible, and that releases additional acreage for spring-planted crops. The lower cost of producing soybeans relative to corn and the perceived price advantage of soybeans over corn drive expectations of an acreage shift from corn to soybeans. The price advantage of soybeans relative to corn maintains a strong soybean position as the current ratio of November soybean futures to December corn futures above 2.5.
Given the number of factors pointing toward greater soybean planted acreage in 2017, planted acreage near 87.4 million is a reasonable expectation. Since 1996, an increase in soybean planted acreage exceeded four million acres three times. While the possibility exists for a six to seven million acre increase in soybean acreage this year, it would be one of the largest shifts in soybean planted acreage on the historical record. The USDA will survey producer's planting intentions next month and release an estimate of those intentions in the March 31 Prospective Plantings report. Further clarification on the planted acreage in soybeans will be provided by the June USDA Acreage report.
Since the start of the freedom to farm era in 1996, the difference between planted and harvested acreage of soybeans ranged between 595 thousand to 1.858 million acres and averaged 1.03 million acres. Years of drought accounted for large differences. Under a normal weather scenario, the record level of planted acreage may see the abandonment of approximately 700 thousand acres in 2017. Planted acreage of 87.4 million acres leads to a harvested acreage of about 84.7 million acres.
Yield expectations for the next crop year normally rely on trend yield analysis. Three successive years of soybean yields well above trend culminated with 52.1 bushels per acre in 2016. It is difficult to determine if the recent increase in soybean yields is the beginning of a new production era. For now, we will continue with the basic trend expectations. Current USDA baseline projections place 2017 soybean yields at 47.9 bushels per acre. CBO projections come in at 47 bushels per acre. Based on the growth in soybean yields in the last three years, normal weather during 2017 could provide an average U.S. soybean yield near 48 bushels per acre. Yield at that level would create a 2017 soybean crop of 4.162 billion bushels, 145 million bushels smaller than the 2016 crop.
A 2017 soybean crop of 4.162 billion bushels combined with the current USDA soybean stock projection of 420 million bushels and imports of 25 million bushels leads to a marketing year supply of 4.601 billion bushels, 73 million bushels larger than the supply for the current year. To prevent 2017-18 ending stocks from increasing under this scenario, soybean consumption needs to greater than 4.181 billion bushels, 73 million bushels greater than current 2016-17 marketing year projections. Increased soybean consumption at this level does not seem likely under current demand scenarios.
Expectations for the 2017-18 marketing year include increased acreage, an increase in ending stocks, and lower prices when compared to the current marketing year. The mitigation of a major price decline requires a reduction in 2016-17 ending stocks from the current 420 million bushels or lower production in 2017. The scenario discussed places average farm prices for soybeans in a range of $8.90 - $9.10 for the 2017-18 marketing year.
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Winter Wheat Now in Greatest Demand as Livestock Feed
Jake Davidson - Winter Cereals Canada
Farmscape for February 14, 2017
The Executive Director of Winter Cereals Canada reports the bulk of western Canada's winter wheat crop is now moving into the livestock feed market.
Winter wheat acreages increased last fall in Saskatchewan, held steady in Alberta and declined in Manitoba and good snow cover this winter has helped protect the crops that were planted from winter kill.
Jake Davidson, the Executive Director of Winter Cereals Canada, reports an increasing percentage of the winter wheat grown in western Canada is now being sold as feed.
Clip-Jake Davidson-Winter Cereals Canada:
Right now the winter wheat crops tend to be going more into the feed market and more of a general purpose market because that's what the grain companies are buying them for.
Under the old Wheat Board, the Wheat Board promoted winter wheat into the Asian milling markets and so because of its specialty features such as super white flour and so on and that was a big deal.
But the private grain companies are not treating it as a potential high value export crop so it tends to be leaning more into feed.
Protein is not why you buy grain.
The winter wheat crop tends to run in the 10 and a half to 11 protein but has very good starch levels which means the energy levels are good so it makes excellent pig and chicken feed.
Especially with the burgeoning market in the prairies on the soybeans and so on, there's an awful lot of people now processing soybeans, either roasting them or extruding them so protein is not a restricting factor anywhere, easy to get.
So the positive side on the winter wheat crop is a high energy grain source.