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WANL181031

October 31, 2018
  • Market Facilitation Payments Program a Go for December
  • How will the 2019 Acreage Mix Change
  • Unwinding New Era Crop Acreage and Prices




Register for the Farm Assets Conference today. The cost is just $40 and includes the price of parking and your noon meal. Come to learn more about how large corporations like Anheuser Busch and McDonald’s are reaching all the way through the supply chain to tap farmers on the shoulder looking for production practices and seed characteristics which meet their needs. It is likely to change how commodity crops are marketed over the next decade. The CME Group, ADM, Cargill, Bunge, and Louis Dreyfus are already preparing for this eventuality. However, might it be possible the middleman in the system will become a distribution system rather than the marketing arm? We’ll explore these concepts during the 2018 Farm Assets Conference.

Register Online today or by calling 800–898–1065

Click here to see the full agenda or scroll to the bottom of this letter. The conference will be held Tuesday, November 20th in Normal, Illinois.



Market Facilitation Payments Program a Go for December


During a Champaign County, Illinois listening session U.S. Secretary of Agriculture Sonny Perdue confirmed the second round of Market Facilitation Program payments for farmers will be coming in December.

U.S. Secretary of Agriculture Sonny Perdue last week told farmers at an event in Champaign County, Illinois that it was likely the second round of MFP payments would come in December. USDA confirmed that in a press release Monday. USDA says those payments are expected, but not yet fully confirmed, to fill out the full amount off compensation producers will receive for markets lost to China as a result of the Trump Administration’s trade battle. This would push the soybean payment to $1.65 per bushel and the corn payment to $0.01. Half of that amount for each commodity has already been approved and distributed (if actual 2019 production numbers have been turned into FSA).

Secretary Perdue says his agency unsuccessfully looked for ways to vary the payments from region to region across the nation based on the impact of Chinese imposed tariffs. There had been some speculation, for instance, farmers in the Dakota’s might end up with bigger payments because soybean exports out the PNW to China have stopped.

The Secretary also made it very clear farmers should not expect another Market Facilitation Program next year. He says this season the trade battle was imposed on them after their planting decisions had been made and so Washington felt obligated to set that right. There will be no such obligation for the 2019 growing season. He puts it in trade terms saying the United States became too dependent on China as a soybean market and that it must “diversify”.

Consequently, U.S. farmers will need to diversify their operations and crop acreage mixes in order to avoid the market disruptions caused by the rebalancing of trade.

How will the 2019 Acreage Mix Change

Those decisions to diversify are driven largely by price and crop rotation. University of Illinois Agricultural Economist Todd Hubbs has done some calculations as it relates to corn and soybeans. He expects, based on price today, U.S. farmers will plant 91.1 million acres of corn in 2019 and 85.7 million acres of soybeans.

Here’s how Todd Hubbs sees that playing out across the nation for corn, soybeans, cotton, and wheat, “We are going to see some wheat acreage expansion. Particularly spring wheat because those prices are relatively strong. Maybe some cotton acreage expansion. We aren’t talking tens-of-millions of acres. Some of the small grains might also see some expansion. So places in the south and the western corn belt may shift back to their more traditional crops.”

Hubbs’ calls this an unwinding of the “new era” crop acreage. His forecast, like USDA’s 2019 planting season advice, does not include a resumption of trade with China.



Since the middle of the last decade agricultural economist, farmers, and policy makers have talked about a new era of agricultural prices at a higher plateau. That era may or may not be coming to an end.

Unwinding New Era Crop Acreage and Prices

The last ten years have seen the build out of the ethanol infrastructure in the United States and the push for red meat production in China. The first caused U.S. farmers to raise more corn to grind for ethanol. The second pushed the expansion of soybean acreage to feed hogs in China. Both drove prices higher and caused acreage to change here and around the planet. That era may coming to an end says University of Illinois Agricultural Economist Todd Hubbs, “I mean we talk about the new era prices. It lead to a new era of acreage allotments. I think we may be at the start of unwinding this build of corn and soybean acreage.”

There are two reasons for the unwinding.

First, the federal legislation which drove the increase in corn acreage has capped out. It actually did that in 2015. Now the Trump Administration is calling to open up the whole gasoline supply to 15% ethanol blends rather than 10%. Because the infrastructure is not in place for that to happen and seems highly unlikely to be built out by a resistant oil industry, it won’t move the dial on corn usage enough to really matter say the ag economists at Illinois. Driving the price of corn higher based on new domestic ethanol demand is probably over.

Second is the trade war with China. This one nation had consumed more than 30% of the U.S. soybean crop. It has essentially shut that gate in a struggle with the United States to determine which nation is likely to be the world’s number one economic superpower in the future. China wants to do it with a combination of capitalism and a planned economy under Communism. The United States uses Democracy and capitalism. The distinction is important because it may give China the upper hand in the short-run. It can simply choose without political ramifications how to organize resources. Those choices are right now reallocating acreage in the United States because farmers are making next year’s cropping decisions today. It’s exactly what the U.S. Secretary of Agriculture last week said they should do, “So the market will equilibrate over a period of time and farmers will look at the market and make their marketing and planting decisions the way they always do.”

What farmers do is to make their planting decisions based on crop rotation needs and price. The price of soybeans won’t be high on that list for next year says Hubbs, “It really does change the allotment. What do we rotate with? If we keep expanding corn acreage and continue to see these unbelievable yields across the country. We may have knocked ourselves out of prices in that new era. Or at least we are going to be pegged in the low end of the range of that new era of prices for the foreseeable future.”



Sponsor the Farm Assets Conference

There are several ways to sponsor the 2018 Farm Assets Conference. Booth spaces are available as are reserved tables. Check out the complete details here or contact Jill Clements at Illinois Public Media (217) 333–7300.



2018 Farm Assets Conference

call 1–800–898–1065 or online at BUY TICKETS NOW | $40 each

Marriott Hotel and Conference Center
201 Broadway Avenue
Normal, Illinois 61761

The noon meal is included. Parking is free in the deck next to the Marriott. There are a large number of vendors available for you to talk with prior to and during the breaks. Come and check out the whole of the event.



8:00 am | Illinois Corn Growers Association Annual Meeting

9:30 am | Farm Assets Registration Desk Opens

10:30am | The Supply Chain Wants You - premiums & contracts
- Angie Slaughter, Vice President Procurement - Anheuser-Busch InBev
- Rickette Collins, Sr. Director Global Supply Chain - McDonald’s Corporation
- Ken Dallmier, President and COO - Clarkson Grain Company
- Brad Allen, AgriEdge Specialist - Syngenta

Noon | Lunch

1:00pm | Agriculture at Research Park
- Laura Weisskopf Bleill, Associate Director, University of Illinois Research Park

1:15pm | Trade, Tariffs, Grain Flow and the Farm Economy
- Gary Schnitkey, University of Illinois
- Jonathan Coppess, University of Illinois
- Bruce Sherrick, ILLINOIS TIAA Center for Farmland Research

2:15pm | Break

2:30pm | WILLAg Commodity Marketing Panel
- Pete Manhart, Bates Commodities
- Bill Mayer, Strategic Farm Marketing
- Merrill Crowley, Midwest Market Solutions
- Wayne Nelson, L and M Commodities
- Todd Hubbs, University of Illinois



Media Registration | Members of the press should contact Lindsay Mitchell (309) 557–3257 at the Illinois Corn Growers Association to register for the Farm Assets Conference.

Corn and Soybean Acreage Prospects for 2019


As US farmers finish the fall harvest, considerable speculation will occur over the next few months about the acreage decisions they’ll make for 2019. Todd Gleason discusses how current market conditions support an acreage increase next year for corn and a reduction for soybeans with University of Illinois agricultural economist Todd Hubbs.

farmdocDaily article
by Todd Hubbs, University of Illinois

Prospects for 2019 crop acreage levels begin with expectations about planted acreage for principal crops. In 2018, acreage planted in principal field crops expanded to 322 million acres, up 2.9 million acres from the previous year. A large share of increased acreage came from an expansion of spring wheat acreage by 2.18 million acres, cotton acreage by 1.4 million acres, and hay acreage by 1.28 million acres. Corn and soybean acreage decreased by 1.03 and .997 million acres respectively. Illinois increased planted acreage by 188,000 acres like most of the primary Corn Belt states. A significant exception came in South Dakota which lowered acreage by 343,000 acres, driven mostly by lower corn acreage. In conjunction with the increase in principal crop planted acreage, prevent plant acreage is small thus far in 2018. The Farm Service Agency reports 1.88 million acres of prevented plantings as of October 1, down from 2.59 and 3.4 million acres in 2016 and 2017 respectively.

As we move into 2019, the prospects of large adjustments to crop acreage increasingly focuses on soybean acreage. Acreage adjustments in many major growing areas may be in the form of crop adjustments instead of acreage losses. The current price environment across principal crops points to constant or modest changes in total planted acreage in 2019 and holds the potential for less overall soybean and corn acres.

Since the inception of the Renewable Fuels Standard and growth in Chinese soybean imports, a noticeable shift in principal crop acreage created increases in corn and soybean acreage at the expense of wheat and small grains. Corn and soybean acreage increased from 158.3 million acres in 2006 to 178.3 in 2018 with a peak acreage of 180.3 million in 2017. Over the same period, wheat acreage declined from 57.3 million acres to 47.8 million projected in 2018. The low for wheat acres came in 2017 at 46.02 million acres. Similarly, small grain acres fell from 18 million acres to 14.88 million with a low of 14.5 in 2017. These acreage adjustments stand out when analyzing the data from the three western Corn Belt states of North Dakota, South Dakota, and Kansas.

In 2006, the states mentioned above planted 20.54 million acres of corn and soybeans. Since that year, corn and soybean acreage grew by over eleven million acres with a peak year of 32.52 million acres in 2017. In 2018, 31.15 million acres of corn and soybeans were planted in those states. Conversely, wheat acres contracted dramatically in those states continuing a long run trend. In 2006, the three states planted 21.9 million acres of wheat. Since that year, wheat acreage fell by over four million acres with a low year of 16.2 million acres in 2017. In 2018, 17.3 million wheat acres were planted in those states.

Narrowing profitability margins appear to be shifting away from the expansion of corn and soybean acreage and back to wheat, small grains, and cotton in many areas. Current projections by industry analysts place 2019 corn acreage in a range from 90 to 93.7 million acres. Soybean acreage projections come in between 82.3 and 87.5 million acres. In essence, if the current margins continue, we may be at the beginning stages of unwinding the acreage shifts seen over the last decade. In 2018, corn and soybean acreage in total reversed a three-year trend of increased planted acres. While soybean and corn acreage decreased in 2018, many crops saw planted acreage increases. In particular, spring wheat, cotton, barley, rye, oats, and hay recorded increases. In the main corn producing states during 2018, Missouri, Michigan, Nebraska, and Ohio increased corn acreage over 2017 planting decisions. None of those states increased corn acreage by more than 100,000 acres. Decreases in soybean planted acreage came from North Dakota, Kansas, Arkansas, Minnesota, and Missouri. As we move into 2019, corn and soybean acreage shifts depend on the evolution of corn and soybean prices between now and planting.

Expectations about corn and soybean acreage will continue to evolve. Preliminary surveys of farmer’s planting intentions indicate an intention to decrease soybean acreage and increase corn acreage. Using current market prices, projections for corn and soybean acreage place 2019 corn acreage at 91.1 million acres and soybean acreage at 85.7 million acres. Data availability on acreage begins with the USDA’s Winter Wheat Seedings report in January to be followed by the March Prospective Plantings report.

Take a Good Hard Look at Selling Soybeans



The price of soybeans rallied out of the October USDA Crop Production report. This is because it showed fewer acres of the crop would be harvested this season. University of Illinois analyst Todd Hubbs thinks the upside potential is limited, “I don’t know if this thing is sustainable. It doesn’t feel that way to me. Moving through the rest of the harvest year and towards the start of 2019, I think we are going to have to see some kind of production issues in the South American crop or if China breaks and doesn’t hold out completely on taking U.S. soybeans before we see a sustained upward movement. I think the upside potential is limited.”

Limited because, even if this year’s crop is hurt some by the poor harvest conditions so far it will remain a record breaker. Right now USDA has it at 4.7 billion bushels. There are plenty of soybeans in the world. That makes it a buyers market and price is going to depend a whole lot upon how many U.S soybeans can be exported says Hubbs, “Basically it doesn’t look like other importers are picking up the loss of the Chinese market like we would like them to.”



When you look at last year and the huge amount of exports Brazil did in the second-half of the marketing year, and even the strength in the latter quarter of the U.S. marketing year, you can see tariff action picking up in forward buying and movement of soybeans thinks the U of I number cruncher. So far in this marketing year we haven’t seen much Chinese movement. In the last export inspections report about 5 million bushels went to China. Still, they seem to be sitting it out and not buying soybean from the United States. This is happening even though the price of U.S. soybeans, when compared to the price of Brazilian soybeans delivered to China, are very competitive.



It all brings Hubbs back to that word “limited”. He sees the upside price potential in soybeans as limited by an enormous supply in the United States and around the world, “If you are thinking about marketing soybeans, I’d take a good hard look at the price we are seeing right now because ending stocks are set at 88 5 million bushels for the 2018/19 marketing year and barring some kind of uptick in exports from the U.S. that may be the low end of reasonable projections depending on what the crop ends up doing here in the U.S.”

You may read more about commodity marketing from Todd Hubbs on the farmdocDaily website.

A Good Year for Pumpkins

This year’s pumpkin crop is the best in the last two decades. That means there will be plenty of jack-o-lanterns for Halloween and lots of pie filling for Thanksgiving.

When the pumpkin crop in Illinois is big that means the whole nation can celebrate fall says Mohammad Babadoost from the Univeristy of Illinois, “We are number one in both of them, jack-o-lantern and processing pumpkins. Far, far ahead of any other state.”

More than 90% of the pumpkin pie filling sold in the United States comes from two processing plants located near Peoria, Illinois. This year the pumpkins feeding into those plants are yielding a record breaking 27 tons per acre. The average is about 23. This is pretty amazing given that a plant disease nearly wiped out the whole industry in the state a couple of decades ago.

Babadoost is naturally proud of his University of Illinois work to salvage the industry from the disease and he continues to work with farmers today to provide them crop production and protection advice. He says pumpkins are a high value crop that work well into a row crop rotation, “Very well. In fact pumpkin rotated with corn or even soybean is a very good crop rotation program.”

Even better, pumpkins can provide two sources of income should the farm want to diversity into a little agro-tourism.

Reviewing Prices and Market Facilitation Payments

read farmdocDaily article



As the trade conflict with China continues, prices for many agricultural commodities remain relatively low. Illinois corn and soybean prices dipped to new lows in September, coinciding with the latest rounds of tariffs.



The difference between selling an entire crop at spring forward bid prices compared to the September average cash prices makes a substantial difference in income on an average central Illinois grain farm.



University of Illinois Agricultural Economist Gary Schnitkey reviews how this plays out on a 1700 acre corn and soybean farm in Illinois this year, and what the prospects look like for next year.

Trump Admin Still Has Some Biofuels Work to Do

Last Tuesday President Donald Trump made a campaign trip to Council Bluffs, Iowa. There he told a very excited crowd his administration would be backing corn farmers and ethanol.

The President leaned into the mic and gave corn farmers a little insider news they’ve been clamoring to hear since U.S. EPA pronounced gasoline blended with 15 percent ethanol would be ok to use in all cars made since 2001, “We are a little bit early. I shouldn’t say it now, but we are going with E15 year-round.”

Mr. Trump is a little early. Today E15 can be used about 9 months out of the year in much of the nation. During those other three months, the summer months, it has been prohibited. U.S. EPA will need to write some rules about how to make the year-round use happen. Those will need to be approved, and clearly the oil industry will mount court challenges.

If all goes well more corn will be used to make ethanol for E15, but it won’t make a difference in the balance sheets for corn says University of Illinois Agricultural Economist Scott Irwin, “Not for this year and I am confident not for next year.”

So the E15 announcement, while a long run win for corn ethanol, rings a little hollow. The Administration’s other big farm country biofuels problem is EPA’s use of the Small Refinery Exemptions or SRE. The good news here, says Illinois’ Irwin, is that ethanol usage has been holding strong despite EPA letting some refineries out of the mandate to produce gasoline blended with a home grown fuel like ethanol made from corn.

However, there is a problem with oil pressed from soybeans to make biodiesel says Irwin, “And the total amount of biodiesel, because of the Small Refinery Exemptions, has probably gone down at least 10 percent. So, there has been real demand destruction from the Small Refinery Exemptions, but it is in biodiesel and not ethanol.”

US EPA has through November to announce its final decisions related to the volume of biofuels it will require in the nation’s gasoline supply in 2019. It may or may not include some guidance on how it expects to use the Small Refinery Exemptions going forward. So far, it has said it will make no comment on that point.

Expected E15 Announcement No Big Deal

President Trump at his Council Bluffs, Iowa rally Tuesday is expected to announce a waiver to allow year-round use of gasoline blended with 15% ethanol (E15). Todd Gleason reports it may make little difference in how much corn is used to make ethanol.

2019 Illinois Crop Budgets are Dismal

The numbers look bad for Illinois grain farmers next year.

That’s the only conclusion Gary Schnitkey can draw when he puts the costs up against the incomes for corn and soybeans in 2019. Schnitkey, an ag economist at the Univesity of Illinois, says fuel and fertilizer costs are expected to go up. Prices aren’t and that’s the dismal part says Schnitkey, “Probably the one thing that has changed relative to recent years is that corn is expected to be more profitable than soybeans. Again, that is largely due to our use of $3.60 for a 2019 corn price and $8.50 for soybeans. This switches the profitability around. That’s driven by trade concerns, particularly with China and what that has done to commodity prices.”

Here’s an example of the bottom line for next year’s budget. A northern Illinois farmer might expect to have $174 to split between the farmer and the landowner for corn and $143 for soybeans. This return is considerably below the cost of cash rent and roughly, says Schnitkey, near the 2005 returns.

Turner Hall Transformation | the smart classroom

Six years after more than 100 alumni, faculty, students, and friends of Illinois gathered to kick-off a 5 million dollar fundraising campaign, the University of Illinois Turner Hall transformation has been completed. 1964 ag sciences grad William Kirk and his wife, Lillian, made a $500,000 donation to seed the project.

Turner Hall West Lobby
Phase I of the Turner Hall Project transformed the crop science and soil science laboratories into 21st-century learning environments. Undergraduate courses are taught in these two labs. Donors also funded a two-story renovation of the west lobby. In total, Phase I renovated 7136 square feet. These renovated spaces allow for active learning, utilizing new technologies. The Dow AgroSciences Crop Sciences Laboratory and the Monsanto Soil Science Laboratory welcomed students for the first time in fall 2015.



Phase II construction began in 2017 and will conclude in 2018. This 38,377 square foot, three-floor renovation will fully transform classrooms on the first and second floors of Turner Hall, as well as advanced laboratories in the basement. Transformed classrooms feature new technologies, state-of-the-art equipment, new flooring, HVAC and lighting. It encompasses a new computer lab, new “smart” classroom, new conference room and student collaboration areas.

New Lab Dedicated to Commodity Crop Bioprocessing


The market for commodity crops processed into new products is expected to more than double in the next six years to some 490 billion dollars. The IBRL building on the Univesity of Illinois campus in Urbana-Champaign is investing in the future of these agricultural innovations.

The last week of September a new building was dedicated on the University of Illinois campus in Urbana-Champaign. The Integrated Bioprocessing Research Laboratory is designed to bridge the gap between discovery and commercialization. IBRL’s director, Vijay Singh, says every year some 250 invention disclosures are filed at the University of Illinois. Most are never commercialized because there isn’t a proof of concept facility to scale up new ways to process ethanol or other agricultural biofuels.



The labs in IBRL, Singh says, will do just that, “This facility is also a link joining academia with business development. With plug and play utilities and flexible equipment offerings, IBRL is agile enough to serve a variety of needs across the bioprocessing industry.”

However, it’s not just the IBRL building on the University of Illinois ag campus that creates this commercialization synergy. There’s the Food Science pilot plant, the Institute for Genomic Biology, the array of greenhouses, the energy farm where all kinds of crops are explored for biofuels, and Research Park where big data technology is fused with the hard sciences. Together, Vijay Singh believes, these create an unmatched eco-space that can drive a bio-economy in Illinois and beyond.

2019 Crop Budgets Suggest Dismal Corn and Soybean Returns

Even with cost-cutting and savings measures, University of Illinois Agricultural Economist Gary Schnitkey says, for the moment, it seems unlikely farmers will have positive returns on rented farmland in 2019. Todd Gleason has more…

Small Refinery Exemptions and Ethanol Demand Destruction

farmdocDaily article

There is widespread interest in whether small refinery exemptions (SREs) under the RFS have “destroyed” demand for ethanol in the physical market. Todd Gleason discusses the point with University of Illinois agricultural economist Scott Irwin.

Trump Trade Policy Crashes Soybean Basis



China, the number one destination for all U.S. soybeans, has stopped buying because of the President’s trade policies. Normally those bushels would be exported via the PNW (the Pacific Northwest) grain export terminals. That gate has closed says NDSU’s Frayne Olson and now all those bushels are expected to try and move through the other export gate at the Port of New Orleans.

Olson says “The challenge we have in the soybean market is that the basis levels are trying to choke off the inflow of grain. Local basis is all about what’s the inflow rate versus the outflow rate. The problem is our out-flow rate is very slow. So, the local basis level is going to continue to fall until it chokes off that inflow and where that magic number depends upon where you are.”

Fall 2019 Soybean Basis
If you look at a fall 2018 map of soybean prices across the United State you can see how grain flow is backing up into the St. Louis export terminals. The PNW can handle about 25 train loads of soybeans a day. St. Louis can manage 5. Because of this, cash prices from the Dakotas all the way to Illinois River - it feeds the export market & St. Louis - are miserably low. Those farmers east of the Illinois River are impacted, too. If the map includes Canadian export terminals you can see that farmers in far western North Dakota are getting a $1.90 a bushel less for their soybeans than their counterparts near London, Ontario. Farmers in parts of Illinois, Indiana, and Ohio are getting about 60 cents less.

Soybean Exports since the Onset of Tariffs

by Todd Hubbs, University of Illinois

The evolving developments with tariffs between the U.S. and China continue to influence the outlook for soybean prices. The relationship between U.S. and competitor export prices along with the changing nature of trade flows merit monitoring during the 2018–19 marketing year.



The implementation of tariffs on Chinese goods and the subsequent retaliation led to an adjustment of trade flows in world soybean markets over the last few months. As the tariffs, went into effect, a price gap opened between Brazilian and U.S. export prices. The gap continuously widened when comparing an index of soybean prices at the port of Paranagua and New Orleans prices since early June.


This chart illustrates how the price of U.S. soybeans for export at the port of New Orleans has dropped below the price of Brazil sourced soybeans from the port of Paranagua since June of 2018.

The gap reached its broadest level late last week at approximately $1.90 per bushel difference. New Orleans prices came in near $8.50 per bushel. It is difficult to predict future changes in the spread between the two prices, but it directly relates to the tariff level in China on U.S. soybeans. The development of this price gap indicates the impact of tariffs on soybean markets and highlights switches in Chinese soybean buying this year. Brazilian soybean exports attained record levels in May with exports coming in at 453.7 million bushels. Soybean exports from Brazil continued to show strength through August with the Brazilian export pace exceeding the previous five-year average by 47.5 percent according to Brazilian export data. Meanwhile, the large drop in U.S. soybean prices led to a jump in soybean exports over the last quarter of this marketing year from the U.S.


Both U.S. and Brazilian soybean exports exceeded the five-year-averages in the month of August. However, ILLINOIS’ Todd Hubbs cautions the U.S. increase, derived from countries other than China, is likely not to make up for the expected losses in soybean trade to that nation if the Trump Administration trade row persists.

The USDA soybean export estimate for the 2017–18 marketing year currently sits at 2.11 billion bushels, an increase of 45 million bushels since the June estimate. An expectation of additional bushels added to soybean exports for the 2017–18 marketing year looks probable based on recent export reports. Census Bureau export estimates through July placed soybean exports at 2.051 billion bushels. Census Bureau export totals came in 56 million bushels larger than cumulative marketing year export inspections over the same period. As of August 30, cumulative export inspections for the current marketing year totaled 2.068 billion bushels. If the same difference in export pace continued through the remainder of the marketing year, soybean exports would total 2.124 billion bushels for the 2017–18 marketing year, 14 million bushels above the current estimate. During the last four weeks, export inspections of soybeans averaged 30.6 million bushels per week. Low soybean prices encouraged exports to destinations other than China in the previous two months.


These pie charts illustrate how the final destination of U.S. soybean exports for the month of July changed this year from the previous four years.

A detailed look at July export totals by country, the first full month under the new tariffs, provide a glimpse of how trade flows appear to be adjusting. While Chinese imports fell by 10.7 million bushels from last July, numerous countries increased soybean purchases at the lower prices. Egypt, the European Union, and Taiwan saw the highest increases over last year at 10.9, 5.7, and 8.7 million bushels higher respectively. U.S. soybean exports to China typically reach the lowest levels of the marketing year in the summer and build strength as U.S. harvest progresses. A large pullback in Chinese demand for U.S. soybeans appears set to continue indefinitely. The growth in soybean exports around the world relies on the lower prices in place since June.

A large amount of uncertainty surrounds soybean exports in the 2018–19 marketing. Currently, the USDA forecasts 2.06 billion bushels of soybean exports. Export sales for the next marketing year sit at 510.4 million bushels as of August 30, down 54.8 million bushels from last year. Sales to China came in at 46.5 million bushels, down 80 percent from the same time last year. Stronger sales figures to Mexico, Canada, and Pakistan mitigated weaker sales totals. The ability for the rest of the world to make up for typical Chinese exports in the first half of the 2018–19 marketing year, when U.S. exports to China are at the highest levels, seems unlikely. The USDA reduced the Chinese soybean import forecast to 3.491 billion bushels in the last WASDE report. Recently, the spread of African swine fever saw China indicate an even further reduction in soybean imports over the next year to 3.2 billion bushels, down 9.5 percent from last year. While decreased Chinese import projections may be optimistic, the prospect of substantial increases in U.S. and South American soybean production next marketing year under a lower export demand scenario would keep U.S. prices under pressure.

The growth of the U.S. trade deficit to China in August and the high likelihood of another round of tariffs between the two nations makes a resolution of trade issues a low probability event for the near future. U.S. exports of soybeans jumped over the last quarter of the marketing year as lower prices spurred demand around the world. A large U.S. crop with lower export demand over the next marketing year set up a bearish picture for soybean prices.

Selling Soybeans Across the Scale


This fall farmers will harvest a record sized soybean crop. USDA says about 4.7 billion bushels. They’ll need a home and farmers in North Dakota are really worried. About 2/3rds of their crop is shipped by rail to the Pacific Northwest for export to China. The Trump administration trade policies have mostly closed that market says North Dakota Senator Heidi Heitkamp, “What I would tell you is not only have you disrupted the markets and we have taken a haircut, you may not be able to sell them which is something I’ve been talking about for a long time.” Heitkamp was speaking to farmers in Fargo at the Big Iron farm show this week.

The cash price of soybeans has tumbled across the whole of the Midwest and some elevators are telling farmers not to bring their beans to town. Those soybeans from the Dakota’s and Minnesota are going to try and find another way out of the country. That’s probably through St. Louis and down the Mississippi River. It’s a brutal cash price situation that backs right up into Illinois says Todd Hubbs, “I hope some people put in at $10 to $10.30. Now it is just a lot of damage limitation and hopefully you get a good yield and you can market some of those soybeans right across the scale, but you are looking at really low prices.”

Hubbs, a commodity marketing specialist from the University of Illinois, thinks the only other option is for farmers to store soybeans on the farm and to hope for an end to the trade dispute with China or for a weather problem in Brazil, or both. Though he admits hope is not a strategy.

Market Mitigation Signup | an interview with Gary Schnitkey

Sign up for the trade and tariff compensation package from the United State Department of Agriculture is open. Todd Gleason has more on how and when farmers and landlords should fill out the paperwork.

Marketing Corn & Soybeans this Fall


The dramatic fall in the price of corn and soybeans earlier in the year has put farmers in a unique marketing position. They must decide how much of the drop is due to the expected bumper crop size of the harvest and how much comes from the Trump Administration trade policies. University of Illinois Agricultural Economist Todd Hubbs says determining when those disputes might be settled is key to making good marketing decisions.

Great Corn Grind, but Ethanol Stocks are Building

Dan O’Brien from Kansas State University discusses the state of ethanol production and stocks. While grind has been tremendous, stocks are building, and plant profitability looks to be near breakeven.

2018 Cash Rents were up $5/acre in Illinois


University of Illinois Agricultural Economist Gary Schnitkey discusses the surprise $5 an acre cash rent increase seen in the state wide 2018 survey numbers and how farm economics look going into the 2019 growing season.

by USDA NASS
see the 2018 USDA Land Values Survey

Agricultural Land Values Highlights

The United States farm real estate value, a measurement of the value of all land and buildings on farms, averaged $3,140 per acre for 2018, up $60 per acre (1.9 percent) from 2017 values.


Regional changes in the average value of farm real estate ranged from an 8.3 percent increase in the Southern Plains region to 1.4 percent decrease in the Northern Plains region. The highest farm real estate values were in the Corn Belt region at $6,430 per acre. The Mountain region had the lowest farm real estate value at $1,140 per acre.


The United States cropland value averaged $4,130 per acre, an increase of $40 per acre from the previous year. In the Southern Plains region, the average cropland value increased 4.7 percent from the previous year, while in the Lake region, cropland values decreased by 0.6 percent.
The United States pasture value increased by $40 per acre (3.0 percent) from 2017 values. The Southern Plains region had the highest increase from 2017 at 5.6 percent. The Pacific region remained unchanged at $1,650 per acre.


Cropland value: The value of land used to grow field crops, vegetables, or land harvested for hay. Land that switches back and forth between cropland and pasture should be valued as cropland. Hay land, idle cropland, and cropland enrolled in government conservation programs should be valued as cropland.

AirScout Precision Agriculture Startup

A startup on the south end of the University of Illinois campus is using thermal imaging to help precision agriculture become prescription agriculture. Todd Gleason has more on how AirScout is helping farmers take advantage of their precision-guided equipment.