12/26/18: Mark's "Market Talk" Blog

The WALL, second round payments, Merry Christmas

Trump and Congress spent most of last week fighting over the funding of a border wall. The USDA along with some other federal agenizes were being held hostage as their funding was set to run out last Friday night. As of the time I wrote this on Friday afternoon there hadn’t been any compromise as both sides appeared to be holding tight. Earlier in the week the USDA announced the second half of the tariff payments would be made right away. Most farmers had completed their yearend tax work so the possibility that this second payment would be made prior to December 31st brought some concern. However if the USDA is shut down that worry goes out the window because there won’t be anyone to make the payments. Congress did pass and the President did sign the new farm bill this past week. I can’t remember a previous farm bill that was passed with so little talk out in the country. It appears few things were changed from the last bill. Not sure that was in our best interest as our area really hasn’t seen much for payments the past 5 years. As normal a high percentage of the money is budgeted for food assistance for everything from food stamps to school and elderly meal programs. The actual amount of direct payments to farmers is not a large amount of the total bill. The grain markets all worked lower last week even with large export sales of corn and soybeans. For the week corn lost 6 cents and beans lost 17 cents. A small amount of bean harvest was done in Brazil which is 3 to 4 weeks earlier than normal. An early harvest there shortens the window of opportunity the US has to sell beans. At this time it appears if a trade agreement isn’t reached with China real soon it could be too late for this year’s sale season. Ethanol producers are still losing money as too many RIN waivers are disrupting the market. Corn purchases were on the Chinese list for the coming year. This could be anywhere from a cargo to 250 million bushels. Let’s hope it is toward the latter amount.   

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