The commodities are mixed this morning, with corn and beans trading firmer while wheat futures are lower. On the upside, the 20-day moving average @ $3.85 is first resistance for May corn futures while the 20-day moving average @ $9.28 ½ is first resistance for May soybean futures. Traders continue to await more details regarding the U.S./China trade negotiations as well as updates from the USDA Ag Forum for direction. Recent talk surrounding the trade negotiations suggest that China has pledged to purchase "significant" quantities of U.S. agricultural products, but that "those proposals are all contingent upon a grand deal" that must include Chinese assurances on intellectual property issues. There also continues to be much ado about the possibility that China will purchase U.S. corn, maybe as part of the overall trade agreement and maybe first as part of a goodwill gesture extended while negotiations continue. At this point, President Trump is thought likely to extend the March 1st deadline, originally set for when tariffs would increase and expand to additional goods, if an agreement hasn’t been put into place by that date. USDA Secretary Sonny Perdue commented Thursday that he felt it to be in agriculture's best interest for the U.S. to take down steel and aluminum tariffs that are in place against Canada and Mexico. The actual implementation of the new U.S.-Mexico-Canada trade agreement may be at risk of delay if those tariffs remain. Those steel and aluminum tariffs are also still creating trade tensions with Europe. On Thursday, 2019 acreage estimates were released by USDA at their Ag Forum. They estimated 92 mln. acres of corn (89.129 in 2018), 85 mln. soybeans (89.196 in 2018), and 47 mln. wheat (47.800 in 2018). Total acreage for the top five crops, which include the three above plus cotton and rice, are estimated at a net 2.2 mln. acre drop vs last year. Government economists also released 10-year "baseline" projections for U.S. ending stocks which showed a decline in corn, bean and wheat stocks. Bean stocks are projected to fall to 845 mln. bu., corn to 1.650 bln. and wheat to 975 mln. Yesterday’s weekly ethanol report was disappointing as production fell by more than 3%, while stocks jumped 2% . Corn usage was estimated at about 102 mln. bu., which is behind the weekly pace needed to meet USDA's current marketing year target. Soybean processors are faring much better than the ethanolors. USDA is expected to report December soybean crushings at 2pm this afternoon (catching up on reports missed due to the government shutdown). Traders are expecting a number near 182.5 mln. bu., which would up sharply on the year. On Thursday, NOAA released updatedlong term U.S. forecast maps which showed April to June with above normal rainfall. TheJune through August forecast has normal temperatures but above normal rainfall. In South America, weather has been favorable as of late. USDA's ag attaché to Brazil estimates the countries soybean crop at 115.5 MMT’s, below USDA's own estimate of 117.0. The Buenos Aires Grains Exchange maintained their estimate of a 53 MMT soy crop in Argentina and said that 87% of the crop is estimated to be in favorable condition. Weekly U.S. export sales were released this morning, covering the last set of missing data from the government shutdown. Numbers came in mostly as expected. A breakdown is below for reference. (Keep in mind these totals cover 6 weeks).
7-day precip forecast (Feb 22-Mar 1)
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