USFR Weekly Recap - March 17-18, 2018

March 17, 2018 03:30 AM
 
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TODAY ON U.S. FARM REPORT
MARCH 17-18, 2018

HEADLINES

WELCOME TO U.S. FARM REPORT. I'M TYNE MORGAN,  AND HERE'S WHAT'S IN STORE OVER THE NEXT 60  MINUTS.  TRUMP TURNS UP THE HEAT ON TARIFF TALKS,  RENEWING FEARS THAT SOYBEAN GROWRS COULD BE  CAUGHT IN THE LINE OF FIRE.  <WE'VE HEARD THE CHINESE SAY DIRECTLY THAT THEY WOULD RETALIATE  AGAINST AMERICAN SOYBEAN IMPORTS. TO THAT COUNTRY. THAT'S A HUGE  DEAL. IT'S THOSE TARIFFS ALSO THE TOPIC OF THIS WEEK'S  PLUS, WE'RE ON THE ROAD WITH MACHINERY PETE TO  THE EAST COAST..  <AUCTION PRICES ON GOOD CONDITION USED TRACTORS, WHATEVER THE  SIZE, HAVE BEEN JUST KIND OF SHOCKINGLY STRONG> YOU'LL ALSO HAVE THE CHANCE TO MEET THE MAN  BEHIND THE 500  BUSHEL PER ACRE CORN CROP LAST  YEAR.  AND MARCH CAME IN LIKE A LION, BUT WILL IT GO OUT  LIKE A LAMB? <U.S. FARM REPORT - BROUGHT TO YOU BY THE DEPENDABLE, LONG  LASTING, CHEVY SILVERADO.>

POSSIBLE TARIFFS ON 100 CHINESE PRODUCTS
NOW FOR THE NEWS, THE PRESIDENT'S TARIFF TALK  HEATING UP THIS WEEK, AND NOW IT'S AS MUCH AS 100  CHINESE GOODS THAT COULD BE IN THE LINE OF FIRE.  THE PRESIDENT NOW DEMANDING HIS CABINET  SECRETARIES AND TPO ADVISERS TO HIT CHINA WITH  STEEP TARIFFS. THAT'S IN RESPONSE TO ALLEGATIONS  OF INTELLECTUAL PROPERTY THEFT BY CHINA.. AND  THOSE TARIFFS COULD BE PLACED ON MORE THAN 100  CHINESE PRODUCTS RANGING FROM ELECTROICS TO  FURNITURE.  THAT NEWS PLUS A SHAKEUP IN THE PRESIDENT'S  CABINET, SENDING WAVES THROUGH THE STOCK  MARKET. THE DOW DROPPED MORE THAN 200 POINTS  MID-WEEK.   BUT IT'S THAT NEWS ALSO ADDING TO THE CONCERNS  OVER A POSSIBEL TRADE WAR WITH CHINA, THAT  COULD COME AT THE COST OF U-S SOYBEANS. 

POSSIBLE 199A FIX
A POSSIBLE FIX TO SECTION 199A IS NOW IN WRITING.  BUT IT'S UNCERTAIN JUST WHAT VEHICLE THE MEASURE  WILL NEED TO BE TIED TO IN ORDER TO PASS THROUGH  CONGRESS AND MADE INTO LAW.  UNDER THIS AGREEMENT, THE TAX PROVISION GOES  BACK TO LANGUAGE SIMILAR TO WHAT WAS UNDER THE  PREVIOUS SECTION 199, BUT ADDS AN ADDITIONAL  DEDUCTION OF UP TO 20 PERCENT OF NET INCOME.  FARM CPA PAUL NEIFFER SAYS ITS ANTICIPATED THIS  DEDUCTION WILL EQUATE TO UP TO 1 PERCENT OF  GROSS SALES, PLUS 11 TO 20 PERCENT OF NET FARM  INCOME FROM THOSE SALES.  WHILE AN AGREEMENT IS IN PLACE, NOW THE HURDLE  MAY BE GETTING IT PASSED IN CONGRESS WITH  DEMOCRATS SAYING THEY  MAY NOT LET THE MEASURE  BE TACKED ONTO THE OMBINBUS SPENDING BILL,  UNLESS THE G-P IS WILLING TO  BUDGE ON OTHER  PIECES OF THE NEW TAX CODE. 

RFS SAGA
THE SAGA OVER THE RENEWABLE FUELS STANDARD  CONTINUES, AS THE ENVIRONMENTAL PROTECTION  AGENCY IS NOW PROPOSING TO  PARDON EAST COAST  REFINER PHILADELPHIA ENERGY SOLUTIONS FROM  COMPLYING WITH THE NATION'S RFS. IT'S A GOVERNMENT BAILOUT WITH A SETTLEMENT  FILED MONDAY PROPING TO WAIVE A PORTION OF THE  350 MILION DOLLARS OWED BY PHILADELPHIA ENERGY  WITH THE RENEWABLE FUELS STANDARD.  THE EPA AGREEING THAT THE REFINER WILL ONLY HAVE  TO PAY ABOUT HALF THOSE COSTS NOW, AND THE  OTHER HALF ONCE AND IF THE BANKFUPTCY  SETTLEMENT IS RESOLVED.  THE PROPOSAL STILL NEEDS TO BE APPROVED BY THE  BANKRUPTCY COURT, BUT THE IDSPUTE NOW HAS A 10- DAY PUBLIC COMMENT PERIOD.  BUT THE RENEWABLE FUELS INDUSTRY IS OPPOSING  THE MOVE.   THE REFINER IS BLAMING THE R-F-S FOR ITS FINANCIAL  WOES. REEWABLE FUELS ASSOCIATION CEO BOB  DINNEEN  SAYING, QUOTE, AT FIRST BLUSH, THIS STRIKES US AS   REWARDING BAD BEHAVIOR AND ITS SETS AN  EXTRAORDINARLY BAD PRECEDENT. END QUOTE. 

SYNGENTA LAWSUIT ENDS
A LAWSUIT THAT SPANS OVER A COUPLE YEARS OVER M- I-R 162 IS COMING TO A CLOSE.   IN A NATIONWIDE CLASS ACTION LASWUIT, SYNGENTA  WILL PAY A ONE-AND-A-HALF BILLION DOLLAR  SETTLEMENT TO CORN FARMERS,  GRAIN HANDLING FACILTIIES, AS WELL AS ETHANOL  PLANTS FOR CORN PRICED AFTER SEPTEMBER 15TH,  2013.  OUR REPORTING PARTNERS AT AGWEB SAY ALL  FARMERS ARE ELIGIBLE FOR THE SETTLEMENT. THAT  INCLUDES THOSE WHO DIDN'T PARTICIPATE IN  PREVIOUS SYNGENTA LAWSUITS.  THE SETTLEMENT MUST BE APPROVED BY A FEDERAL  JUDGE IN KANSAS. AND THE SETTLEMENT DOES NOT INCLUDE THE  EXPORTERS CARGILL AND ADM THAT ARE ALSO SUING  SYNGENTA.

DEANS DROPPING MILK CONTRACTS
AS MILK PRICES STRUGGLE, MANY DAIRY PRODUCERS  ARE FACING A DIRE SITUATION WITH SOME BEING  FORCED TO SELL OUT. AND NOW MORE THAN 80 DAIRY FARMERS ARE LEFT  TRYING TO FIND A NEW HOME FOR THEIR MILK. DEAN FOODS DROPPING CONTRACTS WITH THOSE  PRODUCERS, GIVING THEM A 90 DAY NOTICE. AND NOW OUR REPORTING PARNTERS AT FARM  JOURNAL'S MILK SAYS  DAIRY FARMERS OF AMERICA-   THE LARGEST DAIRY COOPERATIVE IN THE U-S- SAYS  THEY DON'T HAVE ROOM TO TAKE THOSE PRODCUERS  ON. 

ALLENDALE SURVEY
TWO WEEKS PRIOR TO USDA'S SCHEDULED RELASE OF  THE ANNUAL PLANTING INTENTIONS REPORT,  ALLENDALE JUST RELASING ITS ANNUAL ACREAGE  SURVEY RESULTS. AND IT SHOWS FARMERS ARE FAVORING SOYBEANS  THIS YEAR.  THE RESULTS FROM 27 STATES SHOW GROWERS PLAN  TO PLANT A RECORD NUMBER OF SOYBEAN ACRES AT  92 POINT 1 MILLION ACRES. AND THE SURVEY SHOWS CORN PLANTINGS COULD SEE  A BIG DROP, AT 88 POINT 5 MILLION ACRES.  IF THAT HOLDS TRUE, THAT'S NEARLY A 2 MILLION ACRE  INCREASE FOR SOYBEANS, AND A 1 POINT 65 MILLION  ACRE DROP FOR CORN. ALLENDALE'S RICH NELSON  SAYS WHEN YOU BREAK IT  DOWN STATE BY STATE, IT'S THE FINDINGS IN NORTH  DAKOTA THAT ARE SOMETHING TO NOTE.  <SURPRISINGLY WHAT WE FOUND WAS DESPITE THE FACT  THESE PRODUCERS ARE MOVING AWAY FROM CORN IN NORTH DAKOTA,  THEY ARE NOT MOVING INTO BEANS, SO WE HAVE A HIGH SOYBEAN  NUMBER, BUT IT'S NOT FROM THE MOVEMENT AWAY IN NORTH DAKOTA,  THOSE PRODUCRS ACTUALLY MOVING INTO SPRING WHEAT INSTEAD. .> ALLENDALE'S ALL WHEAT ACREAGE NUMBER SHOWS  WHEAT ACRES GAINING GROUND,  46 POINT 88 MILLION. THE FIRM ALSO ASKING PRODUCERS ABOUT OLD CROP  AND NEW CROP SALES. THEY FOUND ABOUT 13 PERCENT OF NEW CROP CORN HAS ALREADY BEEN  SOLD AMONG THOSE PRODUCERS, AND 29 PERCENT OF  SOYBEANS. NELSON SAYS THAT SIGNALS SOME  RESISTANCE FROM PRODUCERS ARE MAKING NEW  CROP SALES, DESPITE RECENT PRICE STRENGTH.

DROUGHT
DRYNESS IN THE WESTERN HALF OF THE COUNTRY  PLAYING INTO THE DECISION OF WHAT TO PLANT THIS  YEAR. THE WEATHER PHENOMENON BEHIND THE  DROUGHT IN THE CENTRAL PLAINS THIS WINTER IS  FADING AWAY. AT JUST THREE MONTHS IN DURATION, THIS 'LA NINA' IS  ONE OF THE SHORTEST IN ABOUT A DECADE. .AUSTRALIA'S BUREAU OF METEOROLOGY SAYS THE  SEA SURFACE TEMPERATURES IN THE PACIFIC OCEAN HAVE STEADILY WARMED SINCE DECEMBER. . IN ADDITION TO THE DRIED OUT FIELDS FROM KANSAS  TO TEXAS, LA NINA IS ALSO TO BLAME FOR THE  PARCHED SOYBEAN CROPS IN ARGENTINA.

TEASE
THAT'S IT FOR THE NEWS. WE NEED TO TAKE A QUICK  BREAK, THEN MIKE HOFFMAN HAS A LOOK AT YOUR  PLANTING FORECAST.  PLUS, JOHN PHIPPS TAKES ANOTHER DEEP DIVE INTO  WHAT TARIFFS ON STEEL MEAN FOR U-S FARMERS.  THAT'S ALL STILL AHEAD. 

WEATHER
WELCOME BACK. TIME NOW TO CHECK WEATHER WITH  METEOROLOGIST MIKE HOFFMAN. MIKE, TALKS OF LA  NINA FADING, BUT HOW LONG COULD IT TAKE TO SEE  SOME RELIEF IN THE PLAINS?  THANKS TYNEE. WELL I THINK WE'RE IN KIND OF THAT TRANSITION PHASE  WHERE WE ARE GETTING SOME STORMS COMING INTO THE WEST SOME  OF THEM COME THROUGH THE PLAINS AND A LOT OF THE NEXT ONES LOOK  LIKE THEY WILL AND THEN THEY GO UP THE EASTERN SEABOARD. SO I DO  THINK THAT WE HAVE SOME HOPE TO START TO SEE SOME RELIEF FROM  THE DROUGHT IN THE CENTRAL PLAINS. LET'S HOPE THESE STORM  SYSTEMS DO AFFECT IT IN THAT WAY. YOU CAN SEE THOUGH YOU GO  BACK A MONTH AND IT WAS A LOT DRIER INTO THE CENTRAL MISSISSIPPI  VALLEY AND THAT HAS IMPROVED GOING THROUGH THE LAST FEW MONTHS.  YOU CAN SEE HOW THINGS HAVE DRAMATICALLY IMPROVED THROUGH  THAT AREA. STILL ON THE DRY SIDE BLACK HILLS INTO EASTERN MONTANA.  BUT THAT'S A LOT BETTER THAN IT HAS BEEN IN SOME DRY AREAS IN THE  SOUTHEAST AS WELL. BUT THE WORST AREAS STILL THE SOUTHWESTERN  PLAINS INTO THE SOUTHWEST INCLUDING SOUTHERN CALIFORNIA. HERE'S  THE OVERALL PATTERN AS WE LOOK AT THE JETSTREAM FOR THIS COMING  WEEK AND YOU CAN SEE THAT STORM SYSTEM MOVING THROUGH THE  CENTRAL PART OF THE COUNTRY BY TUESDAY. THAT'S IN THE EASTERN  SECTIONS. IT LOOKS LIKE WITH THE RIDGE STILL TRYING TO POP UP AGAIN.  BUT LOOK AT THE TROUGH STILL OFF THE WEST COAST AS WE HEAD THROUGH  THE WEEK THEN WE WILL SEE ANOTHER SYSTEM KIND OF BUCKLE THAT  RIDGE A LITTLE BIT BRING SOME MOISTURE INTO THE CENTRAL PLAINS  PROBABLY THURSDAY INTO FRIDAY. AND THAT SYSTEM WILL BE TO THE  EAST COAST BY THE END OF THE WEEK AS WELL.  STILL A TROUGH OFF THE WEST COAST SO SO THE OVERALL PATTERN THIS  TRANSITION PATTERN OUT OF EL LA NINA IS GOING TO CONTINUE. HERE'S  THE WAY THINGS WILL SHAPE UP THEN FOR THIS WEEK. YOU CAN SEE ON  ONDAY SOME SNOW INTO THE NORTHERN ROCKIES NORTHERN PLAINS  SCATTERED SHOWERS AND THUNDERSTORMS THROUGH THE SOUTHEAST THE  STORM SYSTEM WILL MOVE ON THE EAST AND BY WEDNESDAY BE INTO  THE NORTHEASTERN PART OF THE COUNTRY. WE'LL HAVE TO WATCH IT. YOU  KNOW A LOT OF THESE HAVE BECOME BIG SNOWSTORMS THIS ONE. IF IT  TAKES THE RIGHT TRACK COULD AGAIN. BUT RIGHT NOW WE'RE JUST CALLING  FOR AREAS OF SNOW DRIES OUT AGAIN IN THE SOUTHEAST MOST OF THE  CENTRAL PLAINS. NEXT STORM SYSTEM WITH SOME RAIN AND MOUNTAIN  SNOW OUT WEST BY FRIDAY. THEN THAT STORM SYSTEM MOVING INTO  THE CENTRAL AND EASTERN ROCKIES A LITTLE BIT OF RAIN AND SNOW OUT  TO THE EAST OF IT INTO THE NEXT COLD FRONT ALREADY SHOWING ITSELF  WITH ANOTHER STORM POTENTIALLY COMING IN NEXT WEEKEND FOR THE  WEST COAST. LET'S CHECK OUT THE 30 DAY OUTLOOK FOR TEMPERATURES  GOING BELOW NORMAL FOR THE MID-ATLANTIC THROUGH THE NORTHEAST  GREAT LAKES OHIO VALLEY NORTHERN PLAINS NORTHWEST AND EVEN  DIVE DOWN INTO CENTRAL CALIFORNIA. SO A GOOD CHUNK OF THE  COUNTRY BUT FROM TEXAS THROUGH THE FOUR CORNERS REGION  EXPECTED TO BE WARMER THAN NORMAL OVER THE NEXT 30 DAYS. AS  FAR AS PRECIPITATION IS CONCERNED THESE STORMS WILL COME INTO THE  WEST COAST THEY WILL PICK UP GOLF MOISTURE SO THOSE TWO AREAS ARE  GOING TO BE ABOVE NORMAL. AND WE CAN HOPE THAT SOME OF THOSE  AREAS THAT ARE REALLY DRY GET SOME OF THIS AS WELL AS THOSE STORM  SYSTEMS COME EAST. BELOW NORMAL THOUGH SOUTHWEST TEXAS SOUTHERN NEW MEXICO  SOUTHWARD AND BELOW NORMAL FOR THE NORTHERN PLAINS ACROSS THE  UPPER GREAT LAKES INTO NORTHERN NEW ENGLAND. TYNE. 

ROUNDTABLE 1
ALL RIGHT WELCOME BACK THIS ST. PATRICK'S DAY WEEKEND. TIME TO DIGEST THESE MARKETS. SO MUCH GOING ON THIS WEEK. SO MUCH UNCERTAINTY WITH TRADE AND WE'LL GET INTO ALL OF THAT. BUT FIRST LET'S TALK ABOUT SOYBEANS. WE HAVE SEEN A SURGE IN SOYBEAN PRICES. THINGS WERE LOOKING GOOD AND THEN WE'VE SEEN KIND OF A RETRACTMENT AWAY FROM SOME OF THOSE HIGH PRICES THAT WE'VE SEEN. REALLY WHAT IS WEIGHING ON SOYBEANS RIGHT NOW? WELL FROM MY PERSPECTIVE LOOKING AT THE TECHNICAL SIDE WE'VE HAD SINCE THE MARKET BOTTOMED IN MID JANUARY THE FUNDS HAVE ADDED YOU KNOW BIG LENGHTS TO THE MARKET THEY BOUGHT SOME AROUND 950000 FUTURES CONTRACTS IN GRAIN YOU KNOW ACROSS THE BOARD. THAT'S PUT PUT US UP AND AS I VIEW IT RIGHT NOW IS A GREAT TIME FOR SOME FORWARD SALES TO OCCUR OR IF YOU'RE A FUTURES TRADER, START LOOKING TO PLAY THE SHORT SIDE. THE MARKET JUST OVER THE PAST TWO WEEKS THE OPEN INTEREST IN SOYBEANS AND CORN HAS GONE UP 10 PERCENT. AT THE END OF MARKET MOVES. YOU SEE BIG BULGES AND OPEN INTEREST AND IT'S KIND OF FORMS TOPS. AND I THINK THAT'S KIND OF WHERE WE'RE AT RIGHT NOW. SO YOU THINK WE'RE KIND OF SEEING THE TOP OF THE MARKET. YES BECAUSE WHAT YOU CAN LOOK AT THE LAST TWO WEEKS WHAT THE AVERAGE PRICE OF BEANS HAS BEEN. AND WE ARE BELOW THAT FOR THE MOST PART. OK. SO THAT PUTS PRESSURE ON LIQUIDATION. WELL I MEAN WE'VE SEEN THAT FUEL FROM FUNDS RIGHT FOR THE SOYBEAN PRICES WE'VE ALSO SEEN THE CONCERNS ON SOUTH AMERICAN WEATHER PARTICULARLY IN ARGENTINA AND SOYBEAN MEAL REALLY DRIVING UP PRICES ARE WE ARE WE NOT FOCUSED ON SOUTH AMERICA ANYMORE OR IS THE SOUTH AMERICAN CROP BETTER THAN WHAT WE THOUGHT? THE SOUTH AMERICAN. WELL THE DROUGHT STORY IN ARGENTINA HAD BEEN THE DRIVER OF SOYBEAN PRICES ON THE FUNDAMENTAL SIDE FOR MONTHS NOW. AND WE'RE GOING TO GET TO A POINT HERE WHERE THAT'S OLD NEWS AND MAYBE WE'RE STARTING TO APPROACH THAT POINT. I THINK THAT TRADE HAS A FAIRLY GOOD IDEA OR AT LEAST SOME PEOPLE THINK THEY'VE GOT AN IDEA AS TO WHAT THE ARGENTINA PRODUCTION NUMBERS ARE GOING TO BE. AND ONCE WE GET PAST THE SOUTH AMERICAN GROWING SEASON YOU KNOW ATTENTION SHIFTS WE START TO TALK MORE ABOUT DEMAND AND AND MAYBE MORE IMPORTANTLY ABOUT U.S. PRODUCTION, WHAT SORT OF CROPS ARE WE GOING TO PRODUCE IN THIS COUNTRY THIS YEAR AND WE'RE GOING TO GET INTO THAT CONVERSATION VERY VERY SHORTLY. OH I MEAN WE'RE ALREADY HEARING SOME AND YOU GOT TO ACREAGE REPORT OUT THIS WEEK JOE THAT CALLS FOR ABOUT 92 MILLION ACRES OF SOYBEANS BY ONE FIRM'S SURVEY, 88 MILLION OF CORN. THAT'S A PRETTY WIDE GAP. THE BIG GAP I WOULD BE SHOCKED IF CORN ACREAGE WAS BELOW 90 MILLION I WOULD BE PLEASANTLY SURPRISED. DEFINITELY IT WOULD BE A GOOD THING AND IT WOULD OPEN UP THE DOOR TO A LOT BETTER PRICES THIS SUMMER IN CORN IF WE COULD IF WE COULD KEEP THAT ACREAGE NUMBER LOW. I JUST DON'T KNOW IF I SEE THAT WITH DECEMBER CORN FUTURES FIRMLY ABOVE FOUR DOLLARS. BUT ANYTHING'S POSSIBLE. AND USDA SURPRISED US ON THESE ACREAGE REPORTS IN THE PAST. WHAT ELSE IS ADDING TO CORN'S STORY RIGHT NOW? WELL OLD CROP SUPPLIES ARE COMING DOWN. AND YOU KNOW MAYBE THE ACRES ARE GOING TO BECOME A LITTLE BIT LESS DEMAND FOR CORN IS VERY GOOD AND CORN REALLY HAS ONLY HAD A 30 CENT MOVE UP ON THIS WHOLE PROCESS. SO EVEN THOUGH IT'S OVERBOUGHT TECHNICALLY I THINK PULLBACKS CAN BE VERY WELL SUPPORTED ON CORN. SO IF YOU CAN GET HALFWAY BACK AS AN EXAMPLE THAT WOULD BE A GOOD SPOT TO BE LOOKING TO BE BUYING CORN AGAIN. I THINK WE'RE JUST I THINK WE'RE GOING TO COME IN DOWN MARKETS HERE FOR A FEW WEEKS FIVE WEEKS OR SO. BUT I THINK THAT'S JUST A BREAK IN A BULL MARKET. YOU DO. I DO I THINK WE'RE GOING TO HAVE HIGHER PRICES BEFORE THE SUMMER'S OVER. WHEN HE SAYS HIGHER PRICES BEFORE THE SUMMER IS OVER WHAT'S REALISTIC FOR CORN FOR EXAMPLE. SO A LOT OF IT DEPENDS. YOU KNOW WE'VE TAKEN OUR CARRY OUT PROJECTION FOR THIS MARKETING YEAR A FEW MONTHS AGO WE WERE TALKING TWO AND A HALF BILLION BUSHELS. NOW WE'RE TALKING MAYBE SOMETHING CLOSER TO 2 BILLION BUSHELS SO WE DON'T HAVE WE'VE GOT A CUSHION BUT NOT QUITE THE CUSHION THAT WE HAD OR THOUGHT WE HAD A FEW MONTHS AGO. WHEN YOU DON'T HAVE AS BIG OF A CUSHION IT OPENS UP THE DOOR TO HIGHER PRICES BUT NOW YOU'RE TALKING WEATHER AND I CAN'T TELL YOU IF IT'S GOING TO RAIN FOURTH OF JULY WEEKEND OR NOT IN CENTRAL IOWA AND ILLINOIS. YOU KNOW I MEAN THAT'S THAT'S WHAT IT REALLY COMES DOWN TO. THAT'S THE DIFFERENCE BETWEEN A CORN MARKET THAT TOPS AT FOUR AND A QUARTER IN THE CORN MARKET THAT TOPS AT FIVE AND A QUARTER. I MEAN THAT'S THAT'S WHAT REALLY MAKES THE DIFFERENCE AT THE END OF THE DAY. MOTHER NATURE HOLDS THE CARDS HERE. SPEAKING OF MOTHER NATURE THIS WHEAT CROP WE KNOW IT'S BEEN DRY SOME ISSUES WITH PRODUCTION. BUT WHAT ARE YOU SEEING ON THE CHARTS FOR WHEAT. WHAT IS THAT. WELL YOU KNOW WE'VE KNOWN THIS DRY WEATHER AND IT'S BEEN AROUND FOR A WHILE YET WHEAT HAS REALLY HAD A BIG BREAK HERE. FUND'S NEVER GOT LONG WHEAT THEY PARED BACK ON THEIR LONGS BUT THEY'RE STILL SHORT. THERE ARE SOME IN THE MARKET AGAIN. SO IT LOOKS AS IF WHEAT IS GOING TO HAVE SOME NEAR TERM PRESSURE ON IT STILL BUT I DON'T THINK THERE'S GOING TO BE MUCH MORE TO GO. WE'LL SEE ABOUT 20 SECONDS. WHAT ARE YOUR THOUGHTS ON REAL QUICK A BIG DROUGHT IN THE SOUTHERN PLAINS. NOT A LOT OF RELIEF IN SIGHT BUT AT THE SAME TIME WE CAN'T EXPORT WHEAT AND THAT'S A BIG PROBLEM. SO YOU'VE GOT POSITIVE AND NEGATIVE FORCES HERE CERTAINLY. ALL RIGHT WE'RE JUST GETTING STARTED WITH THIS MARKETING CONVERSATION NEED TO TAKE A QUICK BREAK. WE'LL HEAR FROM JOHN. BUT LATER IN THE PROGRAM CHINA THE UNCERTAINTY AROUND TRADE WHAT IT MEANS TO PRICES. WE'LL TALK ABOUT THAT AS WE COME BACK.

JOHN’S WORLD
AT THE TOP OF THE SHOW, WE TALKED ABOUT THE  ADMINSTRATION'S EFFORT TO SLAP MORE TARIFFS ON  CHINESE GOODS. JOHN TAKLED ABOUT IT SOME LAST  WEEK, BUT IT'S A DEEP DIVE INTO THE STEEL INDUSTRY  THAT'S ON TAP FOR HTIS WEEK'S JOHN'S WORLD. JOHN.  < LAST WEEK I TALKED ABOUT HOW IT'S HARD TO MAKE TARIFFS EFFECTIVE.  THIS WEEK LET'S START BY LOOKING AT OUR STEEL INDUSTRY. STEEL OUTPUT  IS ROUGHLY THE SAME AS IT HAS BEEN FOR 30 YEARS. DOMESTIC  MARKET SHARE IS STEADY AS WELL, SLIGHTLY OVER SEVENTY PERCENT.  WE ARE NOT BEING FLOODED BY IMPORTED STEEL. STEEL INDUSTRY  EMPLOYMENT HAS FALLEN OVER THAT TIME BUT HAS BEEN FAIRLY STABLE  SINCE THE RECESSION. BUT IF OUTPUT IS THE SAME, WHY DID  EMPLOYMENT FALL? IMPORTED STEEL DID NOT MAKE JOBS DISAPPEAR  NEARLY AS MUCH AS TECHNOLOGY, WHICH IS REFLECTED IN THIS GRAPH  ON STEEL PRODUCTIVITY. FARMERS SHOULD GRASP THIS AS WE HAVE  ENDURED A SIMILAR DECLINE IN NUMBERS DUE TO TECHNOLOGY LIKE  MACHINERY AND HERBICIDES. EVEN IF TARIFFS WORKED, THIS ONE IS AIMED AT TOO MANY ALLIES.  CHINA IS NOT A BIG SOURCE OF STEEL FOR THE US, IT'S NUMBER 11.  CANADA, MEXICO, BRAZIL, RUSSIA, AND SOUTH KOREA ARE THE  BIGGEST SOURCES. MANY OF THESE COUNTRIES ARE ALSO MAJOR  MARKETS FOR AG PRODUCTS. IN FACT, THE BIGGEST STEEL SOURCES ARE  ALSO OUR BIGGEST ETHANOL MARKETS: CANADA AND BRAZIL. HISTORY  PROVES OVER AND OVER TARIFFS DON'T WORK. IN JUST 10 MONTHS THE  TARIFF OF 2002, FOR EXAMPLE WIPED OUT 200,000 MANUFACTURING  JOBS, AND DID NOT INCREASE STEELMAKING JOBS. ALTHOUGH THESE  TARIFFS WERE ENACTED UNDER THE JUSTIFICATION OF NATIONAL SECURITY,  BOTH THE SECRETARY OF DEFENSE AND THE NATIONAL SECURITY ADVISOR  OPPOSED THEM. SO DID THE DIRECTOR OF THE NATIONAL ECONOMIC  COUNCIL, WHO WAS FIRED FOR THAT OPPOSITION. WHILE EXEMPTIONS FOR  SOME COUNTRIES ARE BEING SUGGESTED, THEY ARE CONTINGENT ON  OTHER ACTIONS, WHICH SERIOUSLY COMPLICATES OTHER NEGOTIATIONS,  ESPECIALLY NAFTA. FOREIGN GOVERNMENTS RISK BEING SEEN AS WEAK  BY NOT RETALIATING. SO HERE'S MY SUMMARY: 1 STEELMAKING JOBS WERE VICTIMS OF TECHNOLOGY. 2 BUT THE US STEEL INDUSTRY IS HEALTHY.  3 THE TARIFFS ARE THE WRONG TOOL BEING USED IN THE WRONG PLACES. 4 THEY DON'T WORK. 5 TARIFFS MAKE US LESS SECURE BY ALIENATING ALLIES. 6 THE US IS ASKING FOR RETALIATION AND AGRICULTURE HAS A HUGE  TARGET PAINTED ON IT. REPUBLICAN SENATOR BEN SASSE PUTS IT WELL. "WE'RE ON THE VERGE OF A PAINFUL AND STUPID TRADE WAR, AND THAT'S  BAD. THIS ISN'T JUST BAD FOR FARMERS AND RANCHERS IN NEBRASKA  WHO NEED TO BUY A NEW TRACTOR, IT'S ALSO BAD FOR THE MOMS AND  DADS WHO WILL LOSE THEIR MANUFACTURING JOBS BECAUSE FEWER  PEOPLE CAN BUY A MORE EXPENSIVE PRODUCT. TEMPORARY  EXCEPTIONS FOR CANADA AND MEXICO ARE ENCOURAGING, BUT BAD  POLICY IS STILL BAD POLICY, AND THESE CONSTANT NAFTA THREATS ARE  NUTS." WHAT HE SAID.>

TEASE
THANKS, JOHN. THOSE TARIFFS ARE ALSO PART OF A  BIGGER DISCUSSION ON THE ROCKY RLEATIONSHIP  BETWEEN THE U-S AND CHINA. WE'LL TACKLE THAT  LATER IN THE SHOW FOR OUR FARM JOURNAL REPORT. BUT AFTER THE BREAK, IT'S A JOHN DEERE ENTHUSIAST  SHARING HIS PASSION FOR THIS WEEK'S TRACTOR  TALES. 

TRACTOR TALES
WELCOME BACK TO TRACTOR TALES FOLKS!  THIS WEEK WE HAVE A CLASSIC JOHN DEERE LA FROM VIRGINIA TO SHARE WITH YOU.STANLEY HULA JR. HAS AN INTERESTING STORY HOW HE ACQUIRED THIS TRACTOR.  AND NOW HE’S PROUD TO HAVE IT IN HIS COLLECTION.WE'VE GOT L.A. JOHN DEERE TRACTOR THAT I ACQUIRED PROBABLY SIX EIGHT YEARS AGO. A FELLA CAME BY AND TOLD ME THAT A TRACTOR WAS FOR SALE. WHEN I WENT TO BUY IT A FRIEND OF MINE HAD BOUGHT IT FROM UNDERNEATH ME. AND THEN HE TRIED TO RESELL IT AND I ENDED UP BUYING IT FROM HIM AND I TOLD HIM WHEN I WENT TO BUY IT I SAID I'LL GIVE YOU EXACTLY WHAT YOU PAID FOR IT AND THAT'S WHAT I GOT IT FOR. AND I'VE HAD IT RESTORED SINCE THEN. WE TOOK AND TOLD THE MOTOR DOWN MECHANICALLY WENT THROUGH IT ENTIRELY. AND THEN I HAVE A FRIEND THAT WAS AS A BODY MAN THAT RESTORES ATTRACTORS AGAIN HE DISASSEMBLED IT AND PAINTED IT OR. PUT IT INTO SHAPE. ITS IN NOW HE'S IT'S RESTORED AND IT PROBABLY HAS A BETTER SHAPE. NOW THAT WAS THE DAY IT WAS BOUGHT INTO. IT RUNS GOOD. YES. MY HEALTH WENT DOWNHILL AND I HAVEN'T BEEN ABLE TO START TO USE TRACTORS AND KEEP RUNNING LIKE I'M SUPPOSED TO. AND THAT'S WHY IT'S NOT RUNNING TODAY. IT WOULDN'T TAKE MUCH TO GET IT STARTED. THE WE USE THE RIGHT GAS AND THE LEADED GAS SO IT DOESN'T MESS THE CARBURETORS UP OR ANYTHING AND WE DRAIN GAYS TOO. SO. PROBABLY WITHIN TWO OR THREE HOURS WE COULD HAVE RUN IT WILL REST HERE AT THIS MUSEUM UNTIL EITHER MY SONS OR SOMEBODY UPS DECIDE TO DISMANTLE THE MUSEUM. THANKS SO MUCH. 

TEASE
WELL, STILL TO COME, AS THE TRUMP  ADMINSITRAITONT URNS UP THE HEAT ON POSISBLE  TARIFFS ON CHINESE GOODS, IT'S THE FEAR OF  RETALITION CONSUMING U-S AG TODAY. WE'LL HAVE  THAT STORY AFTER THE BREAK. 

FARM JOURNAL REPORT
U-S SOYBEAN GROWERS NOW TRYING TO PLAY TO THE  PRESIDENT'S PAIN POINT OF A GROWING TRADE  DEFICIT, SAYING AVOIDING A TRADE WAR IS ONE WAY  TO EAT AWAY AT THE TRADE GAP. BUT IT'S  UNCERTAINTY OVER FUTURE TRADE RELATIONS WITH  CHINA THAT'S HANGING OVER ALL OF AGRICULTURE,  WITH CONCERNS OF A POSSIBLE TRADE WAR.  AND  THAT'S THIS WEEKEND'S FARM JOURNAL REPORT.  TRADE RELATIONS BETWEEN CHINA AND THE U-S ARE  NOW ON ROCKY WATERS. THAT'S AS THE TRUMP  ADMINISTRATION IS TURNING UP THE HEAT ON TARIFFS.  THE FIRST CAME IN EARLY MARCH, WHEN THE  PRESIDENT ANNOUNCED A 25 PERCENT TARIFF ON  STEEL IMPORTS AND A 10 PERCENT TARIFF ON  ALUMINUM.  <SO STEEL AND ALUMINUM WILL HAVE A LOT OF GOOD THINGS HAPPEN,  WE'RE GOIGN TOH AVE NEW JOBS POPPING UP, WE'RE GONG TO HAVE  MUCH MORE VIBRANT COMPANIES > AND IT'S THOSE WHO WANT TO SEE DOMESTIC STEEL  PRODUCTION GROW - LIKE ILLINOIS REPRESETNATIVE  RODNEY DAVIS, SUPPORITING THE PRESIDENT'S MOVE < SOMETHING HAD TO BE DONE WHEN IT CAME TO STEEL. WE'VE SEEN  GOVERNMENT SUPPORTED, CHEAP STEEL BEING DUMPED INTO OUR  COUNTRY. > HE SAYS IT'S THAT ACTION THAT CAUSED A STEEL  PLANT IN GRANITE CITY, ILLINOIS TO CLOSE.  TRUMP'S FAIR TRADE APPROACH TURNED EVEN MORE  STRENUOUS, AS NEWS BROKE THIS WEEK THAT THE  PRESIDENT IS DEMANDING HIS TOP ADVISERS TO HIT  CHINA WITH STEEP TARIFFS IN RESPONSE TO ALLEGATIONS OF INTELLECTUAL PROPERTY THEFT. AND  THOSE TARIFFS COULD CONSUME MORE THAN 100  CHINESE PRODUCTS RANGING FROM ELECTROICS TO  FURNITURE.  HAT NEWS SENDING AN EVEN BIGGER SHOCKWAVE  THROUGH AGRICULTURE.  <ANYTIME YOU HAVE THE FARM ECONOMY STILL KIND OF LAGGING IN ITS  RECOVERY, DISRUPTIONS IN TERMS OF DEMAND ARE REALLY TSTING THE  NERVES OF FARMERS> SOYBEAN FARMERS ON EDGE, FEARING RETALIATION  ON REALIABLE SOYBEAN EXPORTS TO CHINA COULD BE  NEXT.  <I THINK SOME RETALIATION IS INEVETABLE. THE CHINESE ARE KIND OF  SENDING A MESSAGE TO US TO SAY OR THAT'S THE WAY THAT THEY SEND  THE MESSAGE. UNFORTUNATELY IT ALWYS SEEMS THAT AGRICULTURE IS HTE  FIRST ONE TO GO. WE JUST SEEM TO BE THE EASIEST TARGET> <WE'VE HEARD THE CHINESE SAY DIRECTLY THAT THEY WOULD RETALIATE  AGAINST AMERICAN SOYBEAN IMPORTS. TO THAT COUNTRY. THAT'S A HUGE  DEAL. THEY BUY MORE OF OUR BEANS THAN THE REST OF HTE WORLD  COMBINED TO THE TUNE OF 14 BILLLION DOLLARS THE LAST MARKETING  YEAR> IT'S THAT TRADE DISRUPTION THAT COULD HAVE A  RIPPLE EFFECT, AND BECOME LONG-LASTING.  <HISTORY TELLS US THAT IT TAKES A LONG PERIOD OF TIME TO CULTIVATE A  CLIENT AND A VERY SHORT PERIOD OF TIME TO LOSE THAT CLINET, AND  THAT'S MY BIGGEST FEAR IS THAT NOW WHILE YOU MAY THINK THAT  ALUMINUM AND STEEL HAS NOTHING TO DO WITHSOYBEANS. THEY HAVE  EVRYTHING TO DO WITH SOYBEANS NOW> ANALYSTS LIKE ARLAN SUDERMAN SAY WHEN IT COMES  TO SOYBEAN EXPORTS, CHINA IS IN CONTROL.  <ITS' A BUYERS MARKET FROM THEIR STANDPOINT > SUDERMAN SAYS THE WILDCARD FOR CHINA RIGHT  NOW IS SOUTH AMERICA. AS THE MOST RECENT USDA  PROJECTIONS SLASHED ARGENTINA'S SOYBEAN  PRODUCTION ESTIMATES OVER DRYNESS CONCERNS.  <I THINK THEY ARE JUST WAITING TO SEE JUST WAHT IS THE SIZE OF HTE  PRODUCTION THERE IN ARGENTINA. HOW MUCH WILL THAT DRAW SUPPLIES  FROM BRAZIL. WHAT WILL BE THE AVAILABLE SUPPLIES FOR THEM BECAUSE  ONE THING THEY DON'T WANT TO DO IS THREATEN THE AVAILABIITY OF  PROTEIN FOR SUPPORTING THEIR MEAT INDUSTRY BECAUS THAT HAS A  DIRECT IMPACT ON FOOD INFLATIONWITHIN CHINA> MEYER THINKS WHILE SOUTH AMERICA ISN'T THE MAIN  FACTOR IN CHINA'S DECISION ON WHETHER TO  RETALIATE,  BRAZIL IS BECOMING AN EVEN LARGER  PLAYER.   <I CAN SAY LAST WEEK,WHEN WE SAW THE BIG CHINESE BUYS, I WOULD  ATTRIBUTE TAHT TO THE FACT THAT THE BRAZILIAN HARVEST WAS BEHIND  COMPARED TO LAST YEAR> AND NOW HE FEARS U-S SOYBEAN CROP IS A  SECONDARY SUPPLIER TO CHINA, FALLING BEHIND  BRAZIL.  <CHINA IS GOING TO IMPORT 90 MILLION METRIC TONS. THEY MAY GET TO  100 MILLION MENTRIC TONS. BUT TO SEE THEIR NUMBERS INCREASE, AND  OUR SHARE OF THAT EXPORT NUMBER DECREASE, IS VERY CONCERNING> BUT IT'S CHINESE DEMAND THAT SOME IN AGRICULTURE  SAY YOU CAN'T IGNORE.  <IN GENERAL 95 PERCENT OF HTE WORLD'S POPULATION IS LIVING OUTSIDE  THE UNITED STATES AND A BIG PORTION OF THAT IN CHINA ITSELF. > THE AMBIVALENT RELATIONSHIP WITH CHINA IS  NOTHING NEW.  EARLIER THIS YEAR, CHINA LAUNCHED AN ANTI  DUMPING AND ANTISUBISIDY INVESTIGATION INTO U-S  SORGHUM IMPORTS. A CASE THAT NATIONAL SORGHUM  PRODUCERS CEO TIM LUST SAYS DOESN'T STAND ON  SOLID GROUND. <WE'VE BEEN VERY CLEAR THAT WE HAVE A GREAT RELATIONSHIP WITH  OUR CHINESE BUYERS. THIS CASE WAS NOT INITIATED BY OUR  CUSTOMERS. AND CERTAINLY WE WANT TO A FAIR RECORD AND A FAIR CASE  TO MOVE FORWARD>BUT THE MOVE INITIALLY PROVING TO BE A BIG BLOW  TO U-S SORGHUM PRICES AS CHINA IS U-S SORGHUM'S  TOP BUYER.  <CHINA'S ACTIONS ON GRAIN SORGHUM CERTAINLY HAVE PUT A  SHOCKWAVE INTO THE MARKET> SUDERMAN SAYS AS SHIPMENTS TO CHINA HAVE  REMAINED FAIRLY STRONG, THERE'S STILL DOUBT  HANGING OVER THE MARKET, INCLUDING THE MOTIVE  BEHIND CHINA'S CASE.  <EVERYTHING CHINA DOES IS TO PROTECT CHINA AND THEY AHVE A HUGE  RESERVE OF CORN THAT THEY'RE TRYING TO GET RID OF. NOW THEY'RE DOING  THAT NOT FAST ENOUGH. THAT CORN IS GOING OUT OF CONDITION FROM ALL  INDICIATION WE CAN FIND. AND IWTH U.S. GRAIN SORGHUM GOING INTO  CHINA, THAT'S DISPLACING CORN THAT THEY'D LIEK TO SEE GOING INTO THE  FEED STREAM, INTO THE ETHANOL PLANTS> WHILE AG GROUPS UNDERSTAND THE IMPORTANCE OF  A MAJOR BUYER LIKE CHINA, THE NATIONAL WHEAT  GROWERS SUPPORTING THE ADMINSTRTION'S WORLD  TRADE ORGANIZATION CASE AGAINST CHINA.  <THEY'RE CURRENTLY SUBSIDIZING THEIR DOMESTIC WHEAT GROWERS AT  EXCHANGE RATE WOULD ROUGHLY BE ABOUT 10.40 A BUSHEL. THATS COSTING THE U.S. WHEAT GROWER  ABOUT 640 MILLION IN LOST REVENUE A YEAR. > GOULE WANTS TO PROTECT FREE TRADE, BECOMING  VOCAL ABOUT THE CURRENT ADMINSTRATION POSSIBLY  LOSING GROUND IN THE WORLD TRADE ARENA.   <MY BIGGEST CONCERN THOUGH IS WE'VE LOST SOME OF OUR LEVERAGE  AND ABILITY TO NEGOTIATE BECAUSE WE LEFT THE AGREEMENT AND NOW  THERE IS UNCERTAINTY OUT THER EIN THE INTERNATIONAL ARENA OF IF THE  U.S. COMES BACK AND REENGAGES AND DOESN'T GET EXACTLY WHAT  THEY WANT, ARE WE GOING TO PULL BACK OUT AGAIN? > WHILE IT'S A BALACING ACT, IT'S ADDING MORE  UNCERTAINTY TO A TRADE BATTLE THAT SEEMS TO BE  GAINING STRENGTH. I ALSO ASKED SUDERMAN IF HE THOUGHT THIS  UNCERTAINTY REGARDING CHINA HINDERS THE  AMOUNT OF SOYBEANS FARMERS PLANT THIS YEAR. HE  SAID HE DOESN'T THINK THAT'S MUCH OF A FACTOR.  RIGHT NOW IT'S ALL ABOUT NOVEMBER SOYBEAN  PRICES IN CONTRAST WITH THE PRICE OF DECEMBER  CORN FUTURES TODAY. 

TEASE
AFTER THE BREAK, OUR MARKETING DISCUSSION  CONTINUES, HITTING ON THE TOPIC OF CHINA AND THE  IMPACT A TRADE SCUFFLE COUL DHAVE ON PRICES.  THAT'S NEXT. 

 

 

 


ROUNDTABLE 2
ALL RIGHT WELCOME BACK. CONTINUING OUR MARKETING DISCUSSION WE JUST HEARD ABOUT CHINA POSSIBLE RETALIATION POSSIBLY IN THE FORM OF A TARIFF ON SOYBEANS. IF WE DO SEE CHINA HIT THE U.S. WITH A TARIFF ON SOYBEANS. HOW QUICKLY DOES THAT IMPACT PRICES? IMMEDIATELY. YOU'D SEE A HUGE SELL OFF RIGHT OFF THE BAT BUT I DON'T THINK VERY MANY PEOPLE ARE CONVINCED THAT THAT IS GOING TO HAPPEN. CHINA IS VERY CONCERNED REGARDING FOOD SECURITY, REGARDING THINGS LIKE THAT AND JUST NATIONAL SECURITY I THINK IT'S A MATTER OF. SO A LOT OF PEOPLE DON'T THINK IT'S GOING TO HAPPEN AND THE MARKET SEEMS TO BE ACTING AS IF IT'S NOT GOING TO HAPPEN EITHER BECAUSE BEAN PRICES ARE STILL FAIRLY HIGH. RIGHT. IT DOESN'T SEEM LIKE IT'S PHASED BEAN PRICES BUT AT THE SAME TIME CAN CHINA SOURCED ENOUGH FROM OTHER COUNTRIES TO BE ABLE TO PUT A TARIFF. OR DOES IT EVEN MATTER. LIKE WHERE DOES THAT PRICE. HOW DOES THAT PRICE GET PASSED ONTO TO US. WELL IT IT COULD BE A QUESTION OF THIS MAYBE CHINA IS WAITING TO SEE WHAT THEY CAN BUY OUT OF BRAZIL BEFORE THEY THEY DO SOMETHING. I MEAN THAT'S THAT'S ONE THEORY. I THINK THE MOST COMMONLY SUPPORTED THEORY IS THAT THEY'RE NOT GOING TO DO ANYTHING WITH SOYBEANS AT LEAST. I JUST DON'T THINK THEY WANT TO HURT THE FOOD SUPPLY BUT CRAZIER THINGS HAVE HAPPENED. DO THE FUNDS CARE AT ALL? AT SOME POINT THEY WILL YEAH YEAH BECAUSE THEY WERE THERE. THEY'RE THE ONES THAT CAUSED RALLLY IN THE FIRST PLACE THEY WERE SO BEARISH AT THE BOTTOM THEY HAD YOU KNOW A LOT OF SHORT CONTRACTS AND SO HTEY OVER EXTEND THEIR WELCOME BOTH WAYS SO YEAH AT SOME POINT THEY'RE GOING TO CARE AND I THINK IT'S REALLY KIND OF AROUND THE DOORSTEP OF IT. WELL YOU KNOW WE SAW THAT RETRENCHMENT THE RETRACEMENT IN PRICES FOR BEANS SEEN THE SAME WITH HOGS, SEEN THE SAME IN CATTLE I MEAN THE PROTEINS JUST HAVE NOT BEEN FUN TO WATCH LATELY. LET'S START WITH CATTLE WHEN YOU LOOK AT THOSE CHARTS WHAT DOES IT TELL YOU? WELL THAT'S EXACTLY WHAT HAPPENED THE FUND LENGTH WAS TOO LONG IN THE FALL. CATTLE TOPPED FUNDS WERE BIG BUYERS OPEN INTEREST REALLY SURGE AT THE END OF THE MOVE. AND HERE WE ARE WE'VE GONE DOWN EVER SINCE. AND IT IS BECAUSE OF FUND LIQUIDATION. WE'VE GOT TREMENDOUS DEMAND FOR BEEF ON CASH PRICES ARE HIGHER THAN WHERE THE BOARD IS YET THE CATTLE MARKET STILL SUFFERS SO YES IT'S THE MONEY FLOWS NOT NECESSARILY THE FUNDAMENTALS. FUNDAMENTALLY THOUGH WHAT'S GOING ON WITH THESE CATTLE. I MEAN WE KNEW WE WERE SEEING A GROWING HERD RIGHT. WE KNOW DEMAND'S BEEN PRETTY IMPRESSIVE. WE KNEW AT SOME POINT WE'D BE REACHING THAT TIPPING POINT. ARE WE THERE. WE ARE GETTING VERY CLOSE IS WHAT THE FUTURES MARKET IS TELLING YOU YOU'VE GOT A SITUATION WHERE CASH CATTLE TRADED AS HIGH AS 128. THIS WEEK I BELIEVE AND THE FUTURES BOARD WAS FIVE DOLLARS DISCOUNTED TO THAT. AND THEN YOU'VE GOT YOU KNOW FUTURES CONTRACTS OUT INTO JUNE AUGUST OCTOBER THAT ARE EVEN MUCH MUCH CHEAPER THAN THAT. SO THE MARKET IS TELLING YOU AT LEAST FOR THE MOMENT THAT YOU KNOW WE MIGHT HAVE A LITTLE BIT OF A HOLE IN THE CASH MARKET UP FRONT. BUT YOU KNOW EVEN JUST WEEKS OUT WE'RE GOING TO BE IN MUCH BETTER SHAPE FROM A SUPPLY STANDPOINT. WHAT ABOUT HOGG'S. I MEAN WE'VE ALSO SEEN SOME A LOT OF RED ON THAT BOARD. SOME PEOPLE WOULD ARGUE THAT THE POTENTIAL TRADE ISSUES WITH CHINA COULD HAVE AN IMPACT THERE. CHINA I BELIEVE IS THE NUMBER THREE BUYER OF US PORK PRODUCTS. THEY'VE ALSO SEEN BIG HERD EXPANSION IN CHINA. SO THAT MIGHT BE PART OF THE STORY THERE. BUT YES CERTAINLY SOME WEAKNESS IN THE HOGS. ANY OTHER MARKET YOU'RE WATCHING. I LIKE GOLD IS STARTING TO GET INTERESTING TO ME ON THE UPSIDE. THERE'S ENOUGH COMMOTION IN THE WORLD TO MAYBE START TO SEE SOME MONEY FLOWS INTO THAT SO GOLD KEEP AN EYE ON GOLD. BUT AS WE CONTINUE TO HEAR SOME SHAKEUPS IN THE TRUMP CABINET DO YOU EXPECT THAT THAT UNCERTAINTY JUST WEIGHS ON AG COMMODITIES SPECIFICALLY. I DON'T KNOW IF IT WEIGHS ON ANYTHING. I JUST THINK THAT WE'RE IN AN ENVIRONMENT NOW REALLY SINCE SINCE TRUMP'S BEEN ELECTED WHERE THERE ARE JUST MORE WILDCARDS AND MORE MORE POLICY RISK THAN EVER. NOT ONLY DO WE HAVE THE TARIFFS STUFF WITH CHINA. WE'VE GOT ISSUES WITH THE RFS. WE'VE GOT TED CRUZ TRYING TO PUSH THIS RIN CAP ISSUE WHICH WOULD BE A BIG NEGATIVE FOR CORN. SO THERE'S STILL A LOT OF POLICY WILDCARDS OUT THERE THAT WE HAVEN'T HAD BEFORE THAT RECENTLY. ALL RIGHT. THANK YOU BOTH FOR BEING HERE THIS WEEK AND WE APPRECIATE IT. ALL RIGHT WE NEED TO TAKE A QUICK BREAK BUT THEN WE'RE ON THE ROAD WITH MACHINERY. WE ACTUALLY HEAD TO THE EAST COAST FOR MACHINERY PETE SURPRISE BUT TRACTOR PRICES THIS YEAR. YOU WANT TO STAY TUNED.

ON THE ROAD WITH MACHINERY PETE
SOME FARMERS ARE ALREADY IN THE FIELD, WHILE  OTHERS ARE GROWING ANOTHER DAY CLOSER TO  FINALLY GETTING IN THE FIELD. AND IT'S STRENGTH IN PLANTER PRICES AND SALES  THAT ARE CATCHING THE EYE OF MACHINERY PETE, AS  WELL AS DEALERS LIKE JAMES RIVER EQUIPMENT IN  VIRGINIA.   AND THAT'S WHERE WE HEAD FOR HTIS WEEK'S ON THE  ROAD WITH MACHINERY PETE.  FOR THIS THIRD GENERATION VIRGINIA FARMER,  CHALLENGES ARE THE HISTORICAL FOUNDATION OF  FARMING.  <YOU WOULD THINK PRICES WOULD BE ONE, THE WEATHER WOULD BE  ONE, BUT WE FARM THE BANKS OF THE JAMES RIVER, SO WATER QUALITY  IS A BIG CHALLENGE> HE SAYS FARMING ALONG THE JAMES RIVER, HE'S PART  OF THE CHESAPEAKE BAY PROGRAM. IN ORDER TO  REDUCE RUNOFF, HE HASN'T TOUCHED THESE SOILS  WITH TILLAGE EQUIPMENT FOR NEARLY 30 YEARS. A  CHOICE THAT HASN'T HAMPERED HIS YIELDS.   <2017 WE HAD OUR BEST SOYBEAN CROP EVER> HE SAID WITH AN AVERAGE OF 52 BUSHELS PER ACRE  ACROSS HIS FARMS, MOST OF THOSE WERE DOUBLE- CROP SOYBEAN ACRES.  <WE DID SSEE SOME 80 AND 90 BUSHEL SINGLE CROP BEANS> WHILE CORN YIELDS STRUGGLED OVERALL,  HE HAD  ONE FIELD BREAK THE PRIZED 500 BUSHELS PER ACRE  MARK.  <WE HAVE FIGURED THERE'S THRE GOOD SUCCESSES FOR HIGH YIELDING  CORN. ONE THE GOOD LORDS GOT TO BLESS YOU. TWO YOU HAVE TO USE  PIONEER HYBRIDES. AND THREE YOU HAVE TO USE JOHN DEERE PAINT.  WITH THOSE THREE THINGS, YOU'RE ON THE WAY TO SUCCESS> HIS CROP PLAN FOR 2018 IS SPLIT, BUT BASED ON HIS  ROTATION. HE'S GROWING HALF OF HIS ACRES IN CORN,  AND THE OTHER HALF WILL PRODUCE SOYBEANS.  <I JUST HATE CHASING HTE MARKET, BECAUSE USUALLY I CHASE THE  WRONG WAY> HULA DOESN'T CHASE CROP PRICES OR TRACTOR  DEALS, INSTEAD, STICKING TO AN ANNUAL ROTATION.  <WE RUN OUR COMBINES 2 YEARS BEFORE WE TRADE THEM IN, WE'LL RUN  THE LARGER TRACTORS 2 YEARS> MACHINERY PETE SAYS IT'S THE INTEREST IN  TRACTORS THAT'S CAUGHT THE MARKET BY SURPRISE  THIS YEAR.  <AUCTION PRICES ON GOOD CONDITION USED TRACTORS, WHATEVER THE  SIZE, HAVE BEEN JUST KIND OF SHOCKINGLY STRONG> AND IT'S STILL CONDITION THAT'S KEY.  <IF IT'S IN NICE SHAPE, THERE'S DEFINTIY A PREMIUM BEING PAID OUT  THERE, SO FEELS LIKE PEOPLE ARE KIND OF CATCHING UP A LITTLE BIT> HE SAYS IT'S AN UPTICK THAT STARTED THE FIRST  WEEK OF NOVEMBER AND HASN'T SLOWED DOWN YET.  <THIS MARKET HAS NOW ALMOST BEYOND SOLIDIFIED A LITTLE BIT. > BUT FOR JAMES RIVER EQUIPMENT, AND THEIR STORES  ACROSS VIRGINIA AND NORTH AND SOUTH CAROLINA,  SALES OF THE BIG EQUIPMENT ARE STILL LAGGING.  <OUR USED INVENTORY LEVEL IS STILL PRETTY HIGH, A LOT HIGHER THAN I  WOULD LIKE FOR IT TO BE> HE SAYS THE RECESSION IN AG HIT THEIR MARKET A  YEAR LATER THAN THE MIDWEST. BUT WITH HIGH  INVENTORY, THERE IS EQUIPENT THEY WANT TO SEE  MOVED.  <THE BEST OPPORTUNITIES PROBABLY IN COMBINES, HARVESTERS, WOULD  BE NUMBER 1 AND NUMBER TWO WOULD PROBABLY BE ROW CROP  TRACTORS> WHILE LARGE AG IS SUFFERING, HE SAYS IT'S SMALL AG  THAT CONINTUES TO SHINE.  <IN JAMES RIVER'S MARKET, WE HAVE ONE OF HTE LARGEST COMPACT  UTILITY MARKETS IN THE UNITED STATES> IT'S THE 20 TO 100 HORSEPOWER MARKET IS IN HIGH  DEMAND.  <A LOT OF HOBBY FARMS, CONTRACTORS, SMALL PROPERTY OWNERS, YOU  NEVER KNOW WHAT THE NEXT CUSTOMER IS GOING TO TWALK IN AND WHAT  THEIR USE OR APLCIATION IS FOR A TRACTOR> MACHINERY PETE SAYS NATIONWIDE, IT'S ALSO  PLANTERS POSTING IMPRESSIVE PRICES AND SALES.  <PLANTERS HAS BEEN THE ONE CATEGORY THAT'S TEH HIGHEST JUMP  WE'VE SEEN, WITH A 106% INCREASE IN DECEMBER VERSUS 3RD  QUARTER AND THAT'S HELD EARLY IN '18> AND IT'S PLANTERS ALSO GAINING STRENTH ON THE  EAST COAST.  <FINALLY THIS SPRING WE'VE SEEN SORT OF BACK TO NORMAL INVENTORY  LEVELS, WE'VE SOLD A LOT OF OUR AGED INVENTORY, AND THERE'S QUITE A  LOT OF DEMAND FOR THE USED PLANTERS> WITH NEWER PLANTERS, COMES NEW TECHNOLOGY.  BUT FLEET SAYS IT'S ALL ABOUT FINDING THE RIGHT FIT  FOR YOUR FARM.  < BECAUSE IT ALSO COMES BACK TO WHO'S IN THE DRIVERS SEAT. WHO'S  HOLDING THE STEERING WHEEL. THEY HAVE TO BE COMFORTABLE WITH THE  TECHNOLOGY AND THE LEVEL OF DRIVER INPUT IT TAKES TO UNDERSTAND  THE PLANTER AND FEEL COMFORTABLE> FOR HULA, TECHNOLOGY DRIVES MOST OF HIS  EQUIPMENT PURCHASING DECISION.  <WE DO LIKE TO KEEP UP WITH THE TCHNOLOGIES.> <SO JUST LIKE SEED, HTEY CHANGE NEW HYBRIDS EVERY YEAR OR EVERY  SO OFTEN, WELL SO DOES THE EQUIPMENT MANUFACTURERS > HE SAYS THE PLANTER IS THE MOST BENEFICIAL TOOL  ON HIS FARM, AND THAT'S WHERE TEH DATA  COLLECTING BEGINS.  <WHERE DID WE GET THE BEST SINGULATION. WE DID WE HAVE TEH RIGHT  DOWNPRESSURE. JUST FROM THE PLANTIN GTECHNOLOGY THEN WE START  CORELATING THAT WITH EMERGENCY THEN WE CORELATE THAT WITH OUR  SPRAYER TO MAKE VARIABLE RATE APPLICATIONS > AS PLANTING 2018 QUICKLY APPROACHES, HULA SAYS  HE'S READY FOR WHEN MOTHER NATURE SAYS IT'S GO-TIME.  <WE  HOPE WE GET A GOOD SPRING LIKE WE HAD IN 2017, WHERE WE  HAVE DECENT MOIISTURE, GOOD TEMPERATURES, AND WE DO ALL THE  THINGS THAT WE CAN DO, I'M LIKE EVERY OTHER GROWER, I WANT TO  MAXIMIZE MY YIELDS> YIELDS THAT CONTINUE TO CLIMB, PROVING THE YIELD  CEILING MAY BE HIGHER THAN MOST FARMERS THINK.  MACHINERY PETE SAYS THIS WEEKEND, OR ST  PATRICKS DAY, IS TYPICALLY A PIVOTAL POINT FOR THE  USED EQUIPMENT MARKET TO SEE IF PRICES HOLD.  THAT'S DUE TOT HE AMOUNT OF REGIONAL  COSIGNMENT SALES JUST BEFORE THE START OF  PLANTING IN THE MIDWEST. SO HE SAYS THE NEXT  COUPLE WEEKS WILL BE KEY TO SEE IF PRICES CAN  HOLD.  UP NEXT, JOHN PHIPPS AND CUSTOMER SUPPORT 

CUSTOMER SUPPORT
YOU'VE HEARD US ASK THE QUESTION ON TEH SHOW  BEFORE-- ARE DRONES TRULY A TOOL ON THE FARM?  OR JUST A TOY? AND IT'S THE TOPIC OF THIS WEEK'S  CUSTOMER SUPPORT. S EDWARD GADE ASKS ABOUT THE LATEST CRAZE IN AG TECHNOLOGY.“WATCH FARM REPORT EVERY SUNDAY. RECENT EPISODE SHOWED SPRAYING WHEAT FIELDS AND MENTIONED A 2% LOSS DUE TO RUNNING OVER GRAIN WITH TIRES. GOT ME THINKING WHY NOT INVENT A DRONE SPRAYER? MAYBE I JUST LOST OUT ON ANOTHER ONE OF MY INVENTIONS.” THE GOOD NEWS, EDWARD, IS YOU PROBABLY HAVEN’T LOST OUT ON ANYTHING. LET ME PREFACE MY ANSWER WITH THE ADMISSION UPFRONT I AM NOT A BIG FAN OF DRONES. YOUR SUGGESTION IS ONE REASON. DRONES HAVE VERY LITTLE CARRYING CAPACITY. THE ONES BEING SPLASHED ALL OVER FARM MAGAZINES WOULD BE HARD PRESSED TO CARRY A CAN OF RAID, FOR EXAMPLE. TO DATE, THE MOST PRACTICAL APPLICATION FOR THESE DEVICES IS SENSING OR OPTICAL EQUIPMENT LIKE CAMERAS. THE IDEA IS A DRONE CAN FLY OVER THE CROP AND DETECT A PROBLEM. BUT TO CORRECT ANY OF THOSE POSSIBLE ISSUES REQUIRES IN ALMOST ALL CASES A SPRAYER – EITHER GROUND OR AERIAL. THE AMOUNT OF SPRAY SOLUTION TO TREAT A PROBLEM ON JUST ONE ACRE ONE ACRE WOULD BE AT LEAST THREE GALLONS BY AIR, AND MUCH MORE WITH A GROUND SPRAYER. THREE GALLONS IS ABOUT 25 POUNDS, AND SO A DRONE CAPABLE OF CARRYING ENOUGH TO TREAT EVEN A HANDFUL OF ACRES WOULD ESSENTIALLY BE A REMOTE-CONTROLLED HELICOPTER. AND WOULD NOT BE CHEAP. DRONES ARE GOOD FOR DETECTING A POSSIBLE CROP PROBLEM. BUT DOING ANYTHING ABOUT IT WILL REQUIRE SERIOUS GROUND OR AIR MACHINERY TO CARRY THE WEIGHT INVOLVED. MY OTHER DOUBT ABOUT THIS FAD IS IF YOU HAPPENED TO WATCH MY COMMENTARY ABOUT THE NEW STARLINK SATELLITE SYSTEM, I MENTIONED I THINK SUCH DETECTION CHORES WILL BE SOON BE DOMINATED BY LOW-ALTITUDE SATELLITES. FARMERS WILL BE ABLE TO SUBSCRIBE TO SURVEILLANCE SERVICES THAT COULD OFFER NEARLY REAL-TIME IMAGERY OF THEIR FIELDS. I CONSIDER MODERN DRONES UPGRADES OF WHAT WE GEEZERS KNEW AS R/C (RADIO CONTROLLED) MODEL AIRPLANES. I DON’T DOUBT THEY ARE FUN TO FLY. BUT THEY WON’T STOP A FUNGUS IN YOUR CROP WITHOUT BIG STEEL HELPING.

TEASE
THANKS, JOHN. IF YOU HAVE QUESTIONS OR COMMENTS  FOR JOHN, EMAIL HIM AT MAILBAG AT U-S FARM REPORT  DOT COM. WHEN NEED TO TAKE A QUICK BREAK, AND THEN FROM  SNOW TO PREPPING TO PLANT, WE HAVE VIEWER  PHOTOS TO SHARE NEXT. 

FROM THE FARM
WELL I KNOW SOME OF YOU WERE STARING AT SNOW. AFTER WE KNEW  THE ST. PATRICK'S DAY HERE AGAIN. BUT IT'S GO TIME FOR SOME  PEOPLE TO PLANT IN THE SOUTH LIKE MATTHEW DAVIS SAID THEY WERE  BUSY PLANTING RICE IN JACKSON COUNTY ARKANSAS AND CONDITIONS  WELL THEY LOOK PRIMED TO PLANT THIS WEEK IN TEXAS SOME CORN HAS  BEEN IN THE GROUND SINCE FEBRUARY.  OUR FRIEND LINDSEY KIMBRELL SNAPPED SOME PICTURES OF FEBRUARY  PLANTING CORN. SHE SAYS IT'S COMING UP NICELY AND LOVING THE  SUNSHINE LATELY.  AND LINDSAY WORTLEY RECEIVED AN OUTSTANDING HONOR RECENTLY.  HER MOM SAYS SHE'S ACTUALLY SEVENTH GRADER IN SOMERSET  MISSOURI MIKE BUT RECENTLY PLACED FIRST IN THE MISSOURI STATE BETA  CONVENTION WITH HER PROJECT IN RECYCLED ART. CHECK THIS OUT. SHE  USED A VARIETY OF OLD FARM PRODUCTS TO CREATE HER RUSTIC PIECE  INCLUDING WELDING THE PIECES TOGETHER HERSELF. WOW. AND NOW  SHE HEADS TO GEORGIA FOR THE NATIONAL COMPETITION. STICK WITH  THAT WELDING TECHNIQUE BECAUSE THERE IS A DESPERATE NEED FOR A  FEMALE WELDER. I AM I'VE NEVER DONE IT. I DON'T KNOW. IT'S NOT EASY  NOT EASY. ALL RIGHT MIKE. SO WE'RE HERE WE ARE ST. PATRICK'S DAY  SOME PEOPLE LOOKING TO PLANT YOU KNOW DO YOU SEE THIS WEATHER  PATTERN THAT WE'VE BEEN UNDER SHIFTING NOT AT THE MOMENT THIS  TRANSITION PATTERN THAT WE'RE GOING THROUGH AND IT'S A PRETTY  VOLATILE PATTERN WITH A LOT OF STORMS EAST AND WEST.  SOME OF THEM COMING THROUGH THE MIDDLE OF THE COUNTRY.  ALL RIGHT. THANKS MIKE. WELL IF YOU HAVE ANY PICTURES OR VIDEO  SHE WOULD LIKE TO SHARE. YOU CAN SEND THAT TO THE ADDRESS ON THE  SCREEN.

CLOSE
FROM ALL OF US AT U.S. FARM REPORT. I'M MIKE HOFFMAN AND  I'M TYNE MORGAN THANK YOU FOR WATCHING US FARM REPORT. THIS ST.  PATRICK'S DAY WEEKEND BE SURE TO JOIN US AGAIN RIGHT HERE NEXT  WEEK AS WE'VE WORKED TO BUILD ON OUR TRADITION. HAVE A GREAT  WEEKEND EVERYONE.  

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