Farm markets eye Congress’s $5 trillion spending bill, analyst says
Markets are on hold, trying to see what will happen with government policy this week as the U.S. Congress votes on $5 trillion of new spending bills.
To put that into perspective, the entire U.S. GDP is about $23 trillion. So, the U.S. is proposing spending 20% of the annual productivity of the largest economy in the world this week. Is anyone alarmed yet? It is spending 20% of the entire U.S. productivity (not tax collections, all the U.S. population’s production) in one week!
By the way, there is some other news in agriculture this week – weather still does matter, too. Weather forecasts are wetter today, with above-normal precip forecast the next week in the southern half of the U.S., and above normal in the Corn Belt in days 8-14. This is a big change from the warm/dry weather previously forecast. Temps are still forecast above normal, but wetter which is a more bullish forecast than before. So, weather is turning more bullish, as it will create some difficulty with harvest. But for the most part, crops are drying much faster than normal, and harvest is well ahead of normal at this point.
Everyone, please have a safe and successful harvest, as harvest heats up across the Midwest this week. We are 18% harvested corn as of 9/26 (3% ahead of normal), and 16% harvested soybeans (also 3% ahead). Crop conditions are steady this week at 58% G/E soybeans and 59% G/E corn.
The Pro Ag yield model for corn is 177 bu/acre (vs 176.3 USDA), and 49.1 bu soybeans (vs. 50.6 USDA). It seems soybean yields might need to be reduced, while corn yield estimates by USDA might be on target. We’ll see now that lie detectors (combines) are in fields – the crop is what is in the combine hopper! Now, it’s just a matter of determining what that is.
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View our Saturday 7 am webinar at www.progressiveag.com/videos . This week's 10 minute topic is "Inflation".
Ray is President of Progressive Ag Marketing, Inc., a top Ranked marketing firm in the country. See http://www.progressiveag.com for rankings and link to data from Top Producer Magazine and Agweb.com.
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