USDA’s Weekly Crop Condition Scores: Stable/Weak
- The USDA’s weekly crop progress report released on Monday, Aug 5, showed stable corn and soybean crops, a healthy spring wheat crop and a weakening cotton crop.
- Weekly reported corn scores saw the slightest of downgrades by the government as there was a slight increase in the percent of the crop rated “poor” and a decline in the percent of the crop rated “excellent”.
- The government reported that corn silking at 78% vs. the 5 year average of 93% for the same week.
- The USDA did not make any adjustments to the national soybean condition scores. Percentage of the crop rated good/excellent at 54% vs. 67% last year.
- Spring wheat condition scores showed a slight improvement from the previous week as the government reduced the percentage of the crop rated “very poor” to 0. The government reported that 1% of HRS harvest is complete in key producing states.
- Cotton scores fell sharply led by a decline in reported values in Texas.
- What It Means For The U.S. Farmer: We, at FBN, believe that USDA’s latest crop progress scores illustrates a continued stabilization of the U.S. corn and soybean crops. Despite this stabilization, the development of both crops are well behind the 5 year averages. We believe that both the corn and soybean crops are in a fragile state and are vulnerable to further downgrades.
- On Sunday night, the Chinese government announced that state owned Chinese companies would stop buying U.S. agricultural products.
- On Tuesday morning, China's Commerce Ministry announced that the central government is considering increasing import tariffs on U.S. farm products.
- Among the items being considered are: pork, soybeans and corn.
- The decision by China follows President Trump’s action last week to raise $300 billion of import tariffs on Chinese goods effective September 1. President Trump said the decision was based on China breaking a promise to increase purchases of U.S. farm products.
- What It Means For The US Farmer: At FBN we believe that another round of tariffs on top of China’s decision to stop importing U.S. farm goods has the ability to be devastating for the U.S. farmer. It remains to be seen if the outstanding export volumes, soybeans in particular, get cancelled or shipped. Cancellations of outstanding soybean shipments for the 18/19 marketing year would add to the ending stocks number and could be a bearish variable.
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