Wet weather has taken center stage this week.

Unseeded acres added to trade disputes, demand questions, and more government intervention make for an extremely volatile market.  

Thursday, the USDA came out with their plan for payments to producers which have been affected by the U.S. and China tariff war. USDA plans to pay producers basing them on losses per county impacted, rather than by commodity. They are going to use an aggregate of each counties seeded acres for 2019. They are scheduled to be made in three parts. One in July or August, the second in the fall, and the third in early 2020. USDA expects the total payments to reach $14.5 billion. As of now, they are not releasing the per-county rates.

The USDA's plan should encourage producers to plant all they can for the 2019 season. Prices have dropped Thursday as a result, although the market has to keep in mind the extremely wet conditions which potentially will cut production in a large portion of the U.S. growing areas. Right now, the U.S. has over 40 million acres unplanted.

The U.S. Midwest weather forcast reveals no major changes as the wet pattern looks to continue across much of the area through the weekend and into most of next week. Temperatures are forecasted to be below average in the western areas, and average to above elsewhere. The Northern Plains continues to be wet through the weekend but looks like better conditions next week. Temperatures are forecast to be below average. It has been reported by the National Oceanic and Atmospheric Administration the past 12 months were the wettest May to April period in the U.S. since record-keeping began in 1895.

News wire story reports China's domestic food security that has already been ravaged by African swine fever and is under pressure from increased tariffs from the trade war with the United States could be further hit by a devastating and rapidly spreading pest within the next two months. According to academics, the fall
armyworm has already affected farms in southern China, and could hit the country's crop-growing heartlands in the north and northeast as temperatures rise, increasing the risks to crop production as Chinese tariffs restrict the country's ability to purchase American crops as replacements.

Jim Gallagher
Grain Division Merchandising Manager

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