Progressive Ag Marketing Report with Lilja
The older you get the more some seasons end up sticking out in your mind. We’ve had a herd of deer in town this winter season and to me it just feels like the winters of 1986-87 and 2010-11. In 1986 I had a year of driving (with a driver’s license) under my belt. All those years behind a tractor cab or following Dad driving heavy machinery in an old truck from field to field didn’t count. As the oldest, I was given the responsibility of driving my younger siblings to school in a Ford Econoline van. We were only 4 miles out of town and the school changed the bus route that fall to drop us off last. This ticked off my church going parents something fierce as we had harvest, livestock and plenty of chores to do after school. The winter of 1986-87, like this year, started with a solid coat of ice under the snow that never left the gravel roads until spring. If there was ever a year to learn how to drive on ice, that was the one. I hit my first deer that winter (bumped it) as I was cranking the wheel to one side and then to another. The only good thing about ice is that you can’t over correct. To this day, the primary reason I drive very conservatively is that I always feel like I have my younger siblings in the back seat when I’m driving.
2010-11 was similar with ice, plenty of snow and deer herding up in our rural farmstead. They consumed the pine needles on every tree in the yard including the shelterbelt. My wife said you should throw them a few hay bales. I said that the problem is if I do that, 20 will turn into 120 and all the tree bottoms will be stripped come spring. Someone had the same idea my wife had and dropped some hay bales in the city park last week. Spring will tell what the park lawn will look like but I can envision wide areas of bleached grass. For now, I think it’s high time to get the Christmas lights out of my evergreen trees in the front yard.
Weekend rainfall was better than expected for Argentina which had the grain markets and in particular soybeans on the defensive this week. The next two weeks call for multiple systems to sweep through with 2 to 4 inches expected over the next 10 days. Brazil weather remains mostly ideal. These forecasts possibly indicate that the Argentine drought has ended, with above normal precipitation and cooling temperatures. The past week rains have been the best rains in months and they are forecast to continue. IF a weather pattern change has occurred, this is very timely for soybean crops which are just starting to enter the reproductive stage for early planted crops. Soybeans can recover yield potential better than corn at this point, but even corn will salvage some yield improvement if rains continue.
The Buenos Aires Grain Exchange showed Argentina’s good ratings fell again for soybeans and are showing only 3% of Argentina’s soybeans rated in good shape as of January 19th. Poor ratings have grown to 60% for soybeans. According to BAGE only 36% of Argentina’s soybeans have started blooming. Weather in Argentina and Southern Brazil the next 6 weeks will be crucial to the soybean and corn markets and will be the leading factor for price direction.
Argentina reports 5% of corn as good to excellent vs. 22% last year. 47% is rated poor compared to 37% last year. BAGE estimates Argentina corn plantings at 89%, which is behind average. They cut production estimates sharply to 44.5 MMT. The WASDE report cut Argentina corn estimates -3.0 MMT to 52.0 MMT as expected, and Brazil estimates were cut 1.0 MMT to 125 MMT. World ending stocks are estimated to decrease 2.0 MMT to 296.4 MMT. Ukraine cites 15% of corn remains unharvested.
Brazil says it can increase grain planting by 5% a year without deforestation. Planted Acres are around 77 million hectares (190 million acres) currently. The plan is to convert around 40 million hectares (99 million acres) of low productivity pasture into cropland. The government is making plans to incentivize these conversions. High prices typically lead to increased acres, but those are pretty lofty goals.
Rainfall is also favored for the US southern plains over the next two weeks. The 6 to 10 and 8 to 14 day show below normal temperatures for the northern 2/3’s of the US. Precipitation chances in days 1-7 are high for eastern Texas with the system expected to provide Oklahoma and southern Kansas with beneficial moisture. This forecast pressured the wheat complex to start the week.
Progressive Ag Marketing, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Progressive Ag Marketing’s Research Department.
Tom Lilja is an employee of Progressive who writes this column for the Times-Record.