July corn Down 3 $4.46 ¾
July beans Down 6 ¼ $9.07 ¼
The DOW is up $26,524
USD is weaker $96.62
Crude oil is mixed $53.96
Corn traders are trying to determine the next step. A few bulls have opted to take profits as the market pushed to a fresh 5-year high. Bears continue to talk about demand destruction and a market that might be out ahead of itself. There’s a lot of talk inside the trade as off late that the Brazilian crop is going to exceed +101 MMTs and exports could push to 38 MMTs vs. exports of just 24.8 MMTs last year. We are also hearing talk that some Brazilian corn cargos might soon be coming to the U.S.
Soybean traders continue to debate U.S. acres. Bulls are saying we are moving well beyond the traditional planting dates and yield-drag could be much more significant. There’s also talk that re-planted acres are struggling to emerge and may have more complications than originally anticipated. Bears point to the obvious, a massively burdensome balance sheet, a worrisome Chinese trade dispute and a vast amount of uncertainty brewing around African Swine Fever.
Vietnam has culled more than 2.5 million pigs to contain the spread of an African swine fever outbreak that is in danger of infecting every province of the country, an agriculture ministry official said. A second senior official at the department said that it was “only a matter of time” before the disease spreads to all 63 provinces, but did speak anonymously as they are not authorized to speak to the media.
Farmland, until 2007, had been largely held by small family owners and somewhat difficult for the financial industry to access. That changed in the wake of the stock market collapse, when institutional investors, including foreign entities, became much more eager to find new places to park money and gain stronger and safer returns. Interestingly, this happened at the same time owners of farms were aging and many were looking for a way to get cash out of the farming operations they’d built. This has lead to nearly 30% of farmland now being owned by non-operators, including the nearly 30 million acres of U.S. farmland held by foreign investors. Even though that’s only around 3% of the total number of farm acres in play , the percent of foreign farm ownership has doubled in the past two decades and it’s beginning to catch more notice. It’s worth mentioning, that as foreign investors continue to buy U.S. farmland there are no federal restrictions on the amount of land that can be foreign owned, meaning it’s been left up to individual states to decide on any limitations. Our farm real estate contacts have told us, a few years back there were 20 to 25 bidders showing up at the land auctions, now it’s more like 5 to 10 at best, with buyers coming from all over the country as well as corporate agents from across the globe. With individuals and families showing up in smaller numbers at the auctions we leave the door open for foreign buyers. My intention isn’t to be an alarmist, but rather bring to the surface specific issues that could play out should the trend continue. For instance, there exists the possibility that once in the hands of a foreign entity that American owners may not get the chance to ever own the land again. There’s also the fear that once foreign-owned that the acres could be taken out of production. I should mention, if that happens, losses could be felt all the way down the line to rural communities where jobs could be in harm’s way. Another significant issue and one I’ve personally spoken to producers about is the water rights issues. I’ve heard from producers in Arizona who are already seeing questions raised in the cotton, cattle and dairy space where a large number of acres in certain parts of the state are owned by Saudi Arabia. (Source: newfoodeconomy , NPR, will.illinois.edu)