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We're All In The Same Boat
Quality issues abound - remaining grains to be harvested are sprouting and there's a couple comments to that extent in the crop comments segment. All are hoping to get 2019 over and done with, move on to 2020 crop year. Issues are certainly not region specific this year.
2020 Projected Harvest Price
RMA released Informational Memorandum 19-053 announcing the projected harvest prices for our region early last week. The values are the same that were shared with last weekend's update. Here's that chart again for reference.
Sales Closing Deadline - 9/30/2019
Sales closing deadline for wheat and other crops such as alfalfa seed and mint. Don't delay, only a week away!
Multi-Peril Crop Insurance (MPCI) Deadline - 10/1/2019
MPCI crop insurance premiums must be received by the crop companies on this date or interest will attach to any outstanding premium. I've received inquiries about the impact of an open loss on premium and unfortunately the policy language is pretty clear - it does not matter. Policy premiums are due by this date regardless of the status of any pending claim.
Price Loss Coverage (PLC) / Agricultural Risk Coverage (ARC)ARC / PLC
Signup for these programs is underway, although you've got until next March to complete. Here's a link to help with the Monday morning quarterbacking...
Six months of 2019 has had a significant impact on a bunch (billions) of people.
At a recent industry meeting, the topic of delayed harvest for dry peas came about. As indicated in the last update, the calendar date for the end of insurance is fast approaching and those dates are again provided for reference. Know that until the end of insurance date is reached, there is no action on behalf of the crop company; once the date is met, then their adjusters spring into action.
With the continued wet weather and corresponding delays with harvest, quality issues are becoming an additional cause for concern. Remember, nothing will happen until the calendar date for the end of insurance. If you have any crop remaining in the field and the end of insurance date is at hand, you must contact your crop carrier to advise them of such. In turn, the carrier will make arrangements for loss adjusters to inspect and potentially appraise all remaining, unharvested fields. Come Thursday / Friday of this week and you've got any lentil or pea acres unharvested, please let us know so we can advise the crop insurance company accordingly.
Loan Deficiency Payments (LDP)
LDP's have triggered nation-wide for large and small chickpeas. Pulse crop LDP rates are updated on a weekly basis. The current payment rate for garbs is $.25 per hundredweight. Please contact your local FSA office for more details.
Crop maturity for corn and beans continues to lag.
African Swine Fever continues it's global march and has now been discovered in Korea.
Cattle on feed report released Friday reflecting September 1st inventories showed numbers are down 1% year over year.
China is reported to be buying $67 million of US soybeans. South American cannot provide what China needs prior to running out of this year's crop. Administration does not want an interim 'ag trade agreement' prior to a comprehensive trade agreement. Both sides busy posturing their respective positions. October meetings are still scheduled.
China now the number importer of beef replacing the US in that position.
Japan trade accord was initially reported to sign an 'agreement in principle' at the September UN gathering. Said UN gathering is currently occurring, hopefully we'll hear news sometime this week about ink to paper.
Much speculation that a 'deal' from the Trump Administration is coming that will reallocate all previously wavered gallons of ethanol under the SRE's; in the meantime, ethanol industry viability with current market is bleak and the idling of plants continues...
Minneapolis wheat market is strengthening, up double digits last week. I believe this market will continue to show strength as the harvest weather necessary to complete and finish is not at hand. Remaining crops are rapidly deteriorating, sprouted grain will continue to be a topic of discussion as reflected in the crop comments below.
We've recently added to our staff a former grain merchandiser who will be periodically providing his market insights. Here's an example...
Last week China “lifted” retaliatory tariffs on soybeans and pork ahead of high-level trade talks next month. They will need both from the US until they can source what they need from someone else in the future due to S. American beans not coming of until early 2020 and African Swine Flu reducing pork stocks by as much at 25-40%. USDA Is using record “implied” pod weight on beans and assuming normal kernel size on corn for a majority of the grower area. With the late seeding year and slow start, October will be a very important month to calculate real yields on this late crop. My guess, yields lower than USDA figures but question will remain: when will they come to terms? Most likely, after it won't make much of a market difference.
Canola production in Canada is down considerably y.o.y. but with the lower exports (mainly to China), carry-over stocks remain higher than normal, even in light of record high crush levels. Australian canola production is higher than last year but below the 5 year average slightly. Hopefully with the Huawei dispute lessening, China will begin to buy back into that market and the floor will be raised on the nearby markets. My personal opinion is that this will happen but it will take some time.
Pulses: Still not good. Hold on to binned stocks, or don’t, it probably won’t matter a whole lot, not until there’s a large enough crop failure, or two.
Cash SWW markets appreciated again this week on good demand but my fear is that it won’t last. Have wheat offered at 6.00 AND 6.10 just in case. If you’re holding out for “Just a few more cents,” sell 5.95 and put some money in your pocket. In my opinion, 6.00 bids would buy much more wheat than the market could handle and may not stay there long without a large news story, or two (corn/soybean yields DN more than expected etc).
Yemen tender next week. Hopefully it will get us back over $6 for good. Tender again early next month.
A follow up story to the blurb mentioned earlier regarding funding continuous resolution.
The CR did easily the House and the government is now funded until mid-November.
Recent Crop Comments
20th Sep 2019 Sargent County, North Dakota
Southeast North Dakota 9/19/19: Still wheat in the field. Falling numbers on harvested wheat under 250, so it can't be used for milling wheat. Vomitoxin levels at 5 to 10 ppm so you can't sell it for feed wheat. Federal crop ins. isn't sure what to do with it yet. Elevators don't want it. Markets are crappy and nobody seems to notice or care. For corn we are now at 2000 GDU's, last year we had 2,400 at this same date. Most soybeans have made it, there are a few really green fields that got planted mid-June. Will there be 100 million acres of corn in 2020???
18th Sep 2019 Buffalo County, Nebraska
Finally got a cutting of alfalfa put up without any rain. Everyone here is swathing everything because of the winter predictions. Some seed corn being picked in the valley looked at our corn and it’s just now starting to dent. Also have some later planted that is blister. Don’t know where all the old crop corn is cause the ethanol plants are pushing price to keep going. Amazes me how there is such a price difference in our state between places. Sure hope President Trump gets this deal done quick. We’ve all been bleeding for the last 2 years and there isn’t much left
18th Sep 2019 Floyd County, Iowa
It appears we only got a little of the global warming this summer. The corn is behind in maturity in my opinion. As we got to the end of about a month long drought last week (towards 3 inches), a little of the corn had fired up all the way to the top. It really depended on the soil types as to how much firing went on. The tip back ranges from zero to one third the ear length and the kernels seem shallow. I see silage guys starting to run. Our corn will be much, much better than last year but not back to normal yield though. The beans are turning fast as always but seem short to me. Third cutting alfalfa got hurt by too dry and not spraying for bugs. The rain was always coming but didn't, so it was not washing them bugs off.
18th Sep 2019 Des Moines County, Iowa
Just started combining soybeans today. 2.5 maturity, planted April 20th. Averaging low 40 bu. Per acre. To much rain early them to dry late. Beans were only 18 inches tall.
17th Sep 2019 Richardson County, Nebraska
With the excessive rain in SE S.Dakota and Missouri River threat, our ground on tributaries (5 miles away from the Missouri) after 3 local floods this season and replant looking pretty good, we are concerned that we will lose our partial crops which look promising. Some seasons are just hard to win.
16th Sep 2019 Corson County, South Dakota
Lots of long faces at the elevator today. Nobody could pass the falling numbers test. I cut a load from a field that still had some green heads and only scored 187. Wheat harvest 2019 has turned into a salvage operation.
16th Sep 2019 Brown County, Wisconsin
Last week we were deluged with 4.15 inches of rain-add to that 4 more inches we were blessed to receive since the last week of August. We are located in NE WI with a lot of cows in our area- alfalfa had winterkill with many acres new seeding to harvest that has water standing or running thru. Our planting didn't start till June 7th- corn has 3-4 weeks to silage harvest-very little if any will make grain. To top it off there are many manure pits full-with saturated ground this fall will be a dandy to get fall work done. On the good side we have our health & price of milk inching up!
16th Sep 2019 Rice County, Minnesota
Corn in southern Minnesota looks like it will struggle to finish. A lot of yellow tops from nitrogen deficiency, lost fields in fields, and very inconsistent cob size. I could not find one field that has black layered. Most of corn is at some stage of dent, however, you can still find a lot of fields in the dough stage. Some fields will finish in the coming week, but, a substantial amount will most likely experience 12 to 45% loss when looking at the requirements to finish grain fill: https://www.agry.purdue.edu/ext/corn/news/timeless/GrainFill.html
15th Sep 2019 Daniels County, Montana
Heads up to the grain traders! Heavy rains last week In a large area of spring wheat and durum country brought sprouting in the standing heads. Not too much was spared, when checking after the rains some had decent color or was even greenish colored but still was sprouted. Wasn't fit to cut before the rain. A quick call to friends in North Dakota and Minnesota revealed the were in the same position as we were. Just getting started on spring grains.. These rains also affected a large area of southern Canada. My only thought besides losing a very large amount of money and not being able to continue farming is that the cattlemen will have plenty of feed. Please comment if you were in the heavy rainfall areas and you were spared sprouting grain in the heads?
It appears the ridge of warm air is firmly entrenched across the eastern 2/3 of the corn belt where warmth and time for crop to mature are needed. Correspondingly, the moisture pattern across the northern plains remains as well. Flooding that occurred during last year's harvest is feared to be setting up again for this region. Stay tuned...
Posted in Risk Management; Posted September 24, 2019 by Curtis Evanenko