Grain and soy markets took divergent paths to begin this week as corn and wheat uncovered additional buying while the bean market slipped down to the lowest levels traded since early September. I suspect you can blame the adverse action in beans on the fact that it just cannot seem to shake off the case of flu it has been suffering from. I have been told that one of the problems is this is a relatively new strain that has been labeled USCTW19 (US-China-Trade-War 2019), but it is closely related to two previous strains, RWE1980 (Russia-wheat-embargo 1980) and NSE1973 (Nixon-soy-embargo 1973). Regardless, there is no vaccine available, and the virus will just have to run its course, which, unfortunately, in the past has taken decades.
Of the little news that we have to look at so far this week, there is the weekly crop progress report, but before looking at the number, I would like to highlight a special note that was front and center in the report. During the first two weeks of December, NASS will be surveying 81,000 producers around the nation for information regarding harvested acreage, yield, storage, as well as information concerning hog inventory and production. The data they gather will not only be used for the January final production reports and the December 23rd hogs and pigs but will also help establish county levels for ARC and county insurance programs. So, in more ways than one, producer's income can and will be impacted by the numbers they gather. Many a time I have heard farmers talk about "fudging" their numbers for one reason or another, thinking it is really just the governments' means of trying to know too much about their operation. Still, then when figures are released, the same will grumble and grip about how inaccurate they are. Realistically, you cannot have it both ways. As they like to say in the computer world, garbage in, garbage out. If we would like to see improvements in the accuracy of crop and other government reports, and we all know there is significant room for improvement, it has to begin literally at the ground level.
All that said, there were few surprises in the weekly numbers. Corn harvest has reached 84%, up just 8% for the week, and running 12% behind average. As you would expect, Northern tier states remain the furthest behind with Wisconsin at 57% complete, Michigan 56%, and North Dakota just 30%. All three of these states are in line for winter storms this week. Soybean harvest increased by just 3% and has reached 94%. The average is 97%. The only states significantly off the pace are Michigan at 80% and Wisconsin at 82%. Winter wheat conditions were unchanged, with 52% rated good/excellent.
I am slightly hesitant even to mention it, but U.S. and Chinese negotiators were reportedly on the phone with each other this morning trying to knock out a few more details, and the Chinese Commerce Ministry stated that they came to a "common understanding to resolve relevant issues." Here at home, Nancy Pelosi has said that USMCA is "within range," which realistically should have been signed, sealed, and delivered, months ago, and once again brings to mind the notion that mandatory term limits for all elected officials would be a great idea.
Overall, we have a slightly defensive tone in the grain/soy markets this morning, but with little feature in the news and holiday shorted trade, that comes as no surprise. Looking at the macros, we find energy markets higher, metals lower, equities higher, and the dollar a smidge lower.