Much of last week was spent focusing on China trade talks while we worked to get caught up on data after the government shutdown, and digest what the previous week’s USDA report information could mean long-term.

The USDA information was relatively absent of surprises. While corn yield and overall production came in a bit lower than anticipated, the reduction in usage kept overall carryout in line with trader expectations ahead of the report. What was most interesting was the state breakdown in stocks, both on and off the farm, as those numbers will likely have implication in cash values paid in the coming months.

When looking at on farm holdings, we saw relatively large reductions year over year in several states, the biggest being in Minnesota where on-farm stocks were down 170 million bushels from the year prior, and in Iowa where they 120 million lower.

Increases were seen in Indiana, up 45 million from December 2017, and Ohio, up 90 million. Illinois and Nebraska were seen as unchanged, while here in Michigan on-farm corn stocks are estimated to be 10 million bushels higher than a year ago.

Off-farm stocks, or commercial corn holdings, saw limited changes from the year prior. The biggest reductions were again seen in Minnesota, down 62 million bushels and Iowa, down 83 million, with limited gains seen elsewhere.

The change in soybean stocks was most interesting, with on-farm holdings up 450 million bushels from a year ago. The larger crop made for larger commercial holdings as well.

Soybean supply and demand figures saw some relatively minor adjustments. The USDA lowered production a bit, in both yield and harvested acreage, and increased crush demand while reducing export demand by another 25 million bushels – a lower figure than many were expecting ahead of the report.

Wheat numbers came in relatively close to expectations. Weather limited fall wheat planting across the country, with winter wheat seedings coming in lower than last year and the lowest since 1909.

Aside from the USDA numbers, we saw trader attention remain focused on China trade talks. Last week high-level talks were held in Beijing, wrapping up with what many hope will be a framework that will help complete talks sooner than later. Early last week many news groups reported the White House would be open to extending the March 1 deadline put in place several months ago.

This would be a direct turn away from the hard-line stance President Trump had taken early in the trade truce; however, many feel that if enough progress is made and a deal is days away, the extension would be necessary to maintain good faith.

Based on a statement released by the White House early Friday, a lot of progress was made during the week of talks, but “much work” remains before the March 1 deadline. Talks were to resume in D.C. early this week.

We also saw an agreement made between Trump and Congress in budget dealings, keeping the government open. With so much work left to do to get information flow back up to date after the last shutdown, many are breathing a sigh of relief a deal has been made.

Looking ahead, traders will start to discuss what the planting outlook could be for 2019. The USDA will give its first initial outlook this week, but the information will be from a strictly economic approach, different than its survey-based figures that will be released late next month.

At this point talk has begun that corn may gain as many acres year over year as first thought. In fact, some are saying there is a real possibility corn carryout could come in lower than soybean carryout in the 2019/20 crop year.

Angie Setzer is the Vice President of Grain for Citizens Elevator in Charlotte, Mich. Her market commentary can be found on Twitter by @GoddessofGrain and online at www.citizenselevator.com

The opinions and views in this commentary are solely those of Angie Setzer. Data used for this commentary obtained from various sources are believed to be accurate.