3 Big Things Today, May 24
1. Corn, Beans, Wheat All Little Changed on Lack of Fundamental News
Corn, beans, and wheat were barely changed in overnight trading amid a lack of fundamental news.
The wet weather that’s plagued the Corn Belt, potentially delaying planting in some areas, is drying, which should allow growers to finish seeding in some areas. Still, there’s concern in some regions that replanting may be necessary, which could reduce yields.
In wheat country, there’s still no information from agronomists about the damage from the late-April snowstorm that reportedly caused lodging, and it seems investors aren’t too concerned about a bout of wheat-streak mosaic that’s making its way through hard red winter areas.
Corn futures for July delivery rose ¾¢ to $3.70¼ a bushel overnight on the Chicago Board of Trade.
Soybean futures added ¼¢ to $9.48½ a bushel overnight. Soy meal rose 40¢ to $306.70 a short ton, and soy oil futures were unchanged at 32.34¢ a pound.
Wheat for July delivery lost ½¢ to $4.29 a bushel in Chicago, and Kansas City futures were unchanged at $4.30½ a bushel.
2. Trump Budget Cuts 21% From USDA; Federal Crop Insurance Program Targeted
President Trump released his proposed budget for 2018 yesterday, and it looks like agriculture is getting a major haircut.
The president’s proposal – which many Beltway pundits say is dead on arrival when it reaches lawmakers – essentially cuts 21%, or $230 billion, of the Department of Agriculture’s budget.
The biggest parts of the bill are cuts of almost $29 billion over 10 years to the federal crop insurance program, completely eliminating the Market Access Program (MAP) for a savings of $200 million and getting rid of the Foreign Market Development program to save almost $35 million a year.
Funding for conservation programs will fall by $5.8 billion from 2018-2027, the White House proposes.
The National Corn Growers Association expressed disappointment, asserting that slashing crop insurance now is short-sighted.
“It is especially harmful during an extended period of low commodity prices,” the NCGA said in a statement. “NCGA members consistently tell us that crop insurance is their most important risk-management tool. This public-private partnership helps farmers manage their risk, and it saves taxpayers money in the long run by reducing reliance on ad hoc disaster assistance.”
The group called the MAP and the FMD “successful,” saying they’ve built demand globally for U.S. farm products. The average return from the programs is $28 for each dollar spent and account for 15% of all agriculture export revenue, “making them a solid investment,” the NCGA said.
The budget fully funds nutrition programs, the Food Safety Inspection Service, and wildlife fire suppression programs.
Agriculture Secretary Sonny Perdue said in a statement that the budget decisions were tough but had to be made.
“President Trump promised he would realign government spending, attempt to eliminate duplication or redundancy, and see that all government agencies are efficiently delivering services to the taxpayers of America,” he said. “That’s exactly what we are going to do at the U.S. Department of Agriculture.”
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3. Isolated Thunderstorms Possible For Central Illinois, Likely to Return For Weekend
Isolated thunderstorms are rolling across parts of central Illinois into Indiana this afternoon, and may make a return over the weekend.
The thunderstorms that may pass by most of the region this afternoon likely will come back to the area from Friday to Tuesday, according to the National Weather Service. The dry weather will curb levels of rivers that have overshot their banks.
Flooding on the Illinois River is expected to subside by Thursday but may continue downstream for several days, the agency said. Flooding is still expected along the Kankakee River in northwestern Indiana, however.
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