03/19/19 — We talked about the likelihood of increased flooding this spring for the past few weeks, and now that snowmelt has begun in upper Midwest states it certainly has begun. Iowa, Nebraska, and South Dakota all reported flooding this week as the heavy snow finally melted on top of already saturated soils which also happen to be frosted deep into the earth by the winter’s bitter cold temps. The ability of the snowmelt to soak into already saturated and frozen soils is just not there. This flooding didn’t need to be predicted by a Ph.D. as it was obviously a threat. Record high water levels in many rivers in many states is the result, and sometimes dangerous situations with icy water and road washouts.

While the fact that snowmelt occurred about a month earlier than 2018 is good, we have to get the water to run off and get soils dried out before we can get started planting this spring. The warming temps are allowing that to occur at least, with normal to above normal temps now forecast over much of the Midwest — a stark change from the bitterly cold winter temps.

Weather forecasts are calling for below normal precip in the U.S. the coming week, and below normal precip in the western U.S. for the 8-14 day forecast. The eastern and southern U.S. will see above normal precip in the 8-14 day forecast. Temps will average above normal in the western two-thirds of the U.S. the coming two weeks, but below normal in the eastern one-third. Overall, this should help to alleviate flooding in the Midwest, especially in South Dakota, Iowa, and Nebraska with the drier weather. But warmer weather will bring on snowmelt in northern areas, and that will mean more flooding in Minnesota, North Dakota, and Wisconsin.

Flooding will likely expand to Minnesota, North Dakota, and Wisconsin in the coming weeks as temps warm and snow melts in these wet states (soils were saturated from the extremely wet fall). It’s going to be an interesting spring! But with the warming temps, at least the water will start flowing early so that the flooding will be all done (hopefully) by normal spring planting. If temps warm as forecast, it could bring on spring much earlier than last year’s late start.

South American weather is forecast to have above normal precip in Brazil, but almost no precip in Argentina in the next 14 days. That will aid harvest in Argentina, but possibly dry out late season crops there as well. Temps will be near normal in the next 14 days in South America.

The Wall Street Journal is reporting the U.S. semiconductor industry does not support a trade deal with China that calls for more purchases of U.S. chips in a surprise announcement. But they explain that requiring purchases by the government would force them to move assembly plants to China and away from the Malaysian partners they currently have — and they suspect a plot by China to do so to get more control of the industry. China is apparently a huge market for them, but the imports are currently credited to Malaysia, not the U.S., since final assembly is there. What a complicated world! Who would have thought a company/industry would be against more exports for themselves? I doubt anyone in U.S. agriculture would complain about more ag exports to China. Especially considering today’s depressed market.

Pro Ag notes grain markets reversed higher last week, with 14c gains in soybeans/wheat and 9c gains in corn for the week — all after reversing the Monday losses in the markets. That is the first positive sign in a while in a market that has sagged recently. From Feb. 14 to Monday, March 11 wheat prices had fallen 99c, soybeans 47c, and corn 27c in less than a month as China/U.S. trade negotiations were not completed as planned, and it appears no significant agreement is expected in the near term. President Donald Trump has recently said we should expect news in a few weeks, but the market seems quite impatient at this time. The market and all of ag could like to see an agreement on trade with China.

Essentially, the Chinese tariff has been more like an import ban from this communist country as apparently the central government has essentially shut off imports completely. (By intimidation?) This is not like a tariff imposed in the U.S. or any other capitalist country, where exports drop slightly due to the increased cost in a business related decision. In communist China, citizens are well aware of the history of what happens to citizens who don’t listen to the central government!

Ray Grabanski can be reached at raygrabanski@progressiveag.com.

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