MARYLAND GRAIN PRODUCERS
Grain News & Updates:

MARKETS EDITION
Board Members Attend USDA Lock-Up for Prospective Planting &
Grain Stock Reports
Maryland Grain Producers board members joined USDA Under Secretary Bill Northey last week for the release of the March 29, 2018 Prospective Planting and Grain Stock reports. While there, they also had the opportunity to hear about the history of USDA Lock-Up and services that the National Agricultural Statistics Service (NASS) provides.

Many were surprised with the prospective planting report, which soybean acres nationwide will surpass corn acres for the first time in thirty-five years. In Maryland, total crop acres planted are expected to be down 7% from last year. Corn acres are predicted to be down from 480,000 acres last year to 440,000 this year. Soybean acres are predicted to be down from 500,000 acres last year to 496,000 this year. Not surprisingly, winter wheat acres were predicted to decline as well from 410,000 acres to 330,000. Barley however is predicted to see an increase from 50,000 acres to 60,000; potentially due to the new market demand from Proximity Malt.

In the grain stocks report, USDA shows corn stock carry-over up 3% from this time last year, totaling 8.89 billion bushels. USDA also shows soybean stocks up 21%, totaling 2.11 billion bushels. All wheat stocks are down 10%, totaling 49.2 million bushels. 
China Announces Retaliatory Tariffs on 106 U.S. Products
Earlier this week, China announced additional tariffs on 106 U.S. products in response to the Trump administration’s proposed tariffs that included products used for robotics, information technology, communication technology and aerospace. The effective start date for the new charges was not announced, though China's Ministry of Commerce said the tariffs are designed to target up to $50 billion of U.S. products annually.

Corn, sorghum, and soybeans are among the major crops impacted by the announcement, each facing a 25% tariff. The day following the announcement, the futures market tanked, with corn falling 7.5 cents and soybeans falling 40 cents. While China is only the 22nd in the ranking of buyers for U.S. Corn, it is the 4th largest buyer of Wheat and the largest buyer of Soybeans. A Perdue University research study estimated that at a 10 percent tariff, U.S. soybean exports to China would fall by 1/3, and at a 30 percent tariff, exports would fall by more than 70 percent.

It was also announced that China will be placing an additional 15% tariff on ethanol, on top of the existing 30% WTO legal tariff already in place, for a total of a 45% tariff. China is the 5 th largest buyer of U.S. ethanol and this product is currently one of the greatest unknowns looking forward, given the WTO situation and there have already been talks of China trying to transition to E10 and start their own production of ethanol.
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The National Association of Wheat Growers, National Corn Growers Association, U.S. Grains Council, and U.S. Wheat Associates, as well as other groups, are monitoring the conversations closely and strategizing on how to best move forward. There is still much uncertainty and they are approaching delicately so not to upset the current administration. Keep an eye out for updates from these groups as they arise.
Action Alert: Stop the EPA from Messing with the RFS
Unfortunately, the White House is still considering cutting a deal with oil refiners as soon as next week that could hurt farmers. In the meantime, EPA continues to take actions behind closed doors that benefit refiners at the expense of farmers. That means we can’t let up the pressure. We are asking farmers to continue to make your voice heard NOW.

While the White House weighs its options, EPA continues to undermine and mess with the RFS, granting questionable RFS waivers to refiners with no transparency and failing to provide regulatory parity for higher blends of ethanol. The EPA continues to check-off the items on Big-Oil’s wish list while gutting corn and ethanol demand and undermining the President’s commitment to the RFS in the process. 

It’s time for EPA and the White House to consider real solutions, including RVP parity that would allow year-round sales of blends greater than 10 percent. Since these discussions about capping RIN prices started in January, RIN prices have fallen 50 percent. We need to tell the President that ‘enough is enough.’

It’s time for EPA to stop the backdoor reductions to the RFS and time for higher blends of ethanol to receive RVP parity. Reach out to President Trump and your Members of Congress and let your voice be heard.

8 th Round of NAFTA Renegotiations Cancelled, But Still Moving Forward
Round 8 of NAFTA renegotiations were set to begin in Washington DC this week but were later cancelled. All three ministers were still present in DC and continued conversations. The largest issue of contention currently in the renegotiations is Rules of Origin.

Ambassador Lighthizer has indicated that USTR is hoping to get an agreement in principle with the legal scrub completed by May 1. The May 1 deadline is a big one for two reasons: 1) it’s when we would need a final agreement to be considered by the current U.S. Congress (something that Ambassador Lighthizer has raised a number of times over the past few weeks) and 2) May 1 is the day the countries’ temporary exclusions for steel and aluminum tariffs expire. 
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