 Hello, this is Frayn Olsen, crop economist and marketing specialist with NDSU Extension. This is the soybean update for the week of April 1 through April 7, 2019. This week I'd like to provide a brief overview of the information that was contained in the USDA reports that were released last week and discuss some of the implications for the soybean markets as we move forward in time. Before we begin discussing the USDA reports, I'd like to provide a very brief update on the current status of the U.S.-Chinese trade negotiations. Last week, the chief U.S. trade negotiators traveled to Beijing, China for an additional two days of face-to-face intensive negotiations. This week, the chief Chinese negotiators will travel to Washington, D.C. to continue these negotiations and try to work on a final agreement. The remaining issues that need to be discussed are, first, the consistency in translations. Obviously, there are very complex discussions. We want to make sure that the terms and terminology that's being used is accurate and understandable. And now we also have to worry about the translation between English and Mandarin Chinese to make sure that the terms that are being used, the terminology that's being used, is consistent between the two versions. There are still some issues in the financial services area, specifically in banking and securities or securities exchange issues as well as insurances that need to be worked out. Again, some of these changes that are going to be in place as a result of an agreement will need to be phased in over time. And so, again, monitoring the progress that's being made as well as trying to provide some enforcement mechanisms to say what happens if these targets or these dates are not met, what happens within the process is really some key pieces to the terms of the agreement. And there's still some discussion about the exact timeline for removing the existing tariffs. Are their tariffs going to remain in place until progress is being made after an agreement is signed? Are some of the tariffs going to come off immediately with other tariffs remaining until further progress is made? Or will all of the tariffs be removed and then tariffs come back on again if progress is not being made? Again, these are all things that are currently being discussed and part of the negotiation process. So now let's shift our focus back to the USDA reports. Last Friday, March 29th, USDA released two important reports. The first was the Perspective Plantings Report, and the second was the Grain Stocks Report. And I'll provide a brief summary of both of those. But probably the more important of the two, the one that had the biggest market impact was the Perspective Plantings Report. Now to be very, very clear, the Perspective Plantings Report is not USDA forecasts. This report is a summary of surveys of farmers from across the United States asking them what their planting intentions are. We know those intentions may change as the spring moves forward, but what are the current thinking of farmers across the U.S.? So this is a survey-based report. It was conducted between February 27th and March 19th. There was 82,352 farmers across the United States that were surveyed and asked, what are you planning to plant in 2019? Now the Grain Stocks Report is also the farmers that were surveyed for the Perspective Plantings Report are also asked some questions about how much grain do they have on inventory on their farms as of March 1. So again, this is a survey-based report. In addition to the on-farm stocks, they also do a survey of approximately 8,500 commercial grain facilities across the U.S. Now the emphasis is trying to obtain full reporting from all facilities. Unfortunately, not all the storage facilities or commercial facilities report back. So normally there's about a 90% of the storage capacity response to this survey. So again, relatively accurate when you think about the size and the diversity of these surveys. This table provides an overview of the planted acres for the major crops in the U.S. It's been broken into three sections. The top section summarizes a survey of private analysts forecast before the report was released. The top row highlighted in blue is the average trade estimate for 2019 planted acres. The middle section highlighted in black is the 2018 actual planted acreage for each crop. Towards the bottom highlighted in red are the values reported from the 2019 Perspective Planings Report. The last row also highlighted in black is the change in acreage from 2018 to our expectations in 2019. Before the Perspective Planted Report was released, the expectation was that there would be a decrease in soybean plantings and an increase in corn plantings and a small decrease in total wheat plantings. The report confirmed that farmers are expecting to shift out of soybeans and into corn, but the shift was larger than expected. The survey showed an approximately 3.7 million acre increase in corn, a 4.6 million acre reduction in soybeans, and a 2 million acre decrease in all wheat plantings. This is a map prepared by USDA and released in the Perspective Plantings Briefing Report. The Briefing Report is a summary of all of the detailed information provided in the actual Perspective Plantings Report. This map shows U.S. corn planted area for 2019, this is the survey results. If you focus in on North Dakota, North Dakota is expected to have the largest increase in corn plantings, both in absolute acres as well as a percentage change, with an increase of 900,000 acres. This was a surprise to me as well as to many other analysts. I've received several emails and phone calls asking if I agree with the report. My response is it seems a little strong, but those are the numbers that North Dakota farmers provided. I also think that some North Dakota and U.S. farmers are now rethinking their plans because of the drop in corn prices after the report was released. I think it's also important to point out the corn area acres in both South Dakota and Iowa are also expected to increase. This is the same type of map, but it's reports U.S. soybean planted area for 2019. Now we're going to focus in on soybeans. If we look at North Dakota, North Dakota soybean plantings are expected to decrease 400,000 acres, while soybean plantings are expected to fall 600,000 acres in Iowa and 500,000 acres in Minnesota. If we look at this northern and western soybean growing region, it seems as though those states are the ones that will see the largest decrease in soybean plantings. If we take a quick look at U.S. spring wheat planted area for 2019, we'll see that the total U.S. spring wheat plantings are expected to decrease 370,000 acres, but North Dakota plantings are projected to increase 150,000 acres. The large cut in Montana offsets the increase in North Dakota. This table provides a summary of not only historical plantings for 2017-18, but also the expected plantings for 2019 for North Dakota crops specifically. And again, just to summarize, North Dakota corn acres are expected to increase approximately 900,000 acres, North Dakota spring wheat is expected to be up 150,000 acres, and North Dakota soybeans are expected to be cut by 400,000 acres. The only other notable change would be a fairly significant cut in Durham plantings from 1.1 million last year to about 750,000 acres in 2019. One of the other questions I've been getting since the USDA reports were released is, will the wet weather and flooding in Nebraska and Iowa have an impact on corn and soybean acres? In reality, it's too early to tell. The temperatures and rainfall over the next month will have a big impact. However, wet soil conditions are raising some concerns. This is a map showing the Palmer Drow Severity Index by NASCrop Reporting District. This is similar to the drought monitor map that shows drought severity, but the Palmer Index also shows soil moisture surpluses. This map represents soil moisture conditions in the entire soil profile, not just the surface moisture. Please note that dark green coloring represents extremely moist conditions of more than 4 inches above average. This suggests that if Nebraska, Iowa, South Dakota and Southern Minnesota continue to have wet weather, spring planting may be delayed. However, spring moisture is normal and plantings on time, there's considerable subsoil moisture to help the crop if there's any dry conditions this summer. I would also like to briefly comment on the grain stocks report. Once again, this report provides a survey-based estimate of both off-farm and on-farm or commercial grain inventories. This is a graph of the historical soybean stocks as of March 1. The green bars represent U.S. on-farm inventories, the gold bars U.S. off-farm inventories. As you can see, both on-farm and off-farm inventories are at record levels in absolute bushels. The two reasons for the high record inventories are record soybean production in 2018, as well as slow export pace through the Chinese tariffs on U.S. soybeans. So to briefly recap, the trade negotiations continue to move forward, but the timeline for an agreement is still very unclear. The USDA perspective plantings report suggests that we will see a larger shift into corn and away from soybeans than we were first expected. The big question will farmers modify their planting intentions, again given the drop in corn prices, but also the potential for additional wet weather this spring. And if there is an adjustment, how much of an adjustment will take place? And finally, the March soybean stocks are about 29% larger than this time last year, but they were very, very close to what the trade was expecting. This concludes this week's report. Please feel free to contact me if you have any questions, and thank you for listening.