ACRONYMS & ABBREVIATIONS

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L i k e

C l i c k

H E RE

to b e a d d e d t o t h e l i s t !

ACRONYMS & ABBREVIATIONS

Me (strolling past the basement living room on my way to get the laundry): OMG!!

Tripp never ceases to amaze me with his indoor farming escapades, meticulously crafted by his seven-year-old

hands.

I will have to ask him if he is heavy corn, soybeans, or hay this year.

His outdoor farming activities are always eye-catching as well. He has been enjoying a week of Easter break from

school, so his days are spent helping at the farm. On Wednesday he was at the shop by himself when a delivery

driver arrived with two pallets of wrap for haylage bales on a flatbed truck. Tripp was quick to get the skid steer,

attach the pallet forks and unload the truck.

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SOS

Although SOS is officially a Morse code sequence, it is not an abbreviation for anything (according to Wikipedia,

anyway). SOS remains an internationally recognized signal of distress, especially by ships calling for help.

Well, hopefully the Ever Given will

not be tapping out “SOS” again

anytime soon, as she was dislodged

from the Suez Canal earlier in the

week. A full moon, bringing rising

tides, significant dredging efforts,

and a fleet of tugboats all came

together to unbeach the 200,000-ton

whale.

We all learned a valuable lesson in

world trade over the past couple

weeks. The Ever Given’s misfortune

was an eye-opener as one ship’s

struggles created a traffic jam that

could be viewed from space.

Shipping plays a vital role in world trade and can be considered the backbone of the world economy. It is

estimated that 80% of global trade by volume and 70% by value are carried by sea.

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There

are

four

major

chokepoints

when

it

comes

to

global

shipping:

The Strait of Hormuz seems to find its way into the news occasionally as it sits at the heart of Middle Eastern

geopolitics. The Strait sees one-quarter of seaborne-traded oil and a third of the world’s liquified natural gas.

The Strait of Malacca is Asia’s

primary chokepoint and one of the

world’s busiest shipping lanes. It

links Asia with the Middle East and

Europe, carrying an estimated 40%

of global trade – more than 100,000

vessels

each

year!

Third on the list is the infamous

Suez Canal – seeing 12% of world

trade each year. It saves ships

thousands of extra miles from the

long way around the southern tip of

Africa – a journey that can add

weeks to the trip at a cost of more

than $26,000 in fuel per day.

Interesting to note the Ever Given is

not the only ship to encounter

problems in the Suez Canal – at

least two other ships have

managed to get stuck since 2008.

Last, but not least is the Panama

Canal, spanning the narrowest part

of the country connecting the

Atlantic

and

Pacific

Oceans,

handling an estimated 14,000

transits each year.

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USD

The USD’s (dollar’s) share of global currency reserves dropped in the fourth quarter to 59%, the lowest in 25

years according to the International Monetary Fund. Some view the dollar’s slide in share of reserves as

temporary given the fourth quarter was its weakest in a decade, noting increasing demand for the euro, among

other things skewed results.

Others, however, claim we are headed into a multiple reserve currency framework over time, as the U.S.

struggles to maintain its position of dominance in the world economy. A recent Bloomberg article said, “the

Chinese renminbi is transforming into a force to be reckoned with in currency markets, with more yuan changing

hands than ever before in London, the world’s leading foreign-exchange center.”

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Much to the dismay of ag markets, the dollar just finished its best quarterly performance since 2018, up 3.6%

from the start of the new year. The most important thing to remember when it comes to currencies is – it takes

two to tango.

‘Strength’ and ‘weakness’ are relative terms, as other major currencies are related back to the US dollar. The

euro has faltered in recent trade, as virus resurgence fears stifle economic recovery hopes, while the Chinese

renminbi just finished its worst month against the dollar since the onset of the trade war.

The dollar’s outlook remains upbeat in the wake of improving economic prospects backed by the Biden

administration’s $2 trillion “Infrastructure” plan. [I am anything but an economic, policy, or fiscal expert, but

that seems somewhat contradictory!]

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TLN

Ah, speaking of the money

printer – our government’s new,

favorite

monetary

denomination

is

trillion

–

abbreviated with T, tril, trn, or

tln.

Notable trillion-dollar moments

in U.S. history:

The U.S. national debt surpassed

$1 trillion for the first time on

October 22, 1981 as Ronald

Reagan encouraged Congress to

spend heavily on arms, while also

cutting taxes.

It took 5 more years for the

government to add another $1

trillion in debt, surpassing $2

trillion in 1986.

The trajectory changed during the Obama administration and 2008 recession, setting us on a new path that

averaged $1 trillion in added deficits, annually.

In 2019, Social Security spending

surpassed $1 trillion, annually.

By 2026, Medicare and Medicaid

spending will each surpass $1

trillion, annually.

By 2030, net interest spending is

projected to surpass $1 trillion,

annually.

This chart is a bit outdated, as

national debt surpassed $28

trillion last month.

What comes after trillion, you may ask? I assumed it was a gazillion. Turns out the actual term is quadrillion.

So, with our government’s runaway freight train of a deficit, seems as if quadrillion will come around sooner

rather than later.

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MLB

Batter up! MLB’s (Major League Baseball) 2021 season kicked off with all 30 teams playing at 15 stadiums across

the country on Thursday.

To mark the occasion, USDA (U.S. Department of Agriculture) tweeted out a series of agriculture-related

baseball stats yesterday. Here are a few that caught my eye:

2.4 million baseballs are manufactured each year from 20,000 hides – an average of 120 balls per hide. The

MLB uses just under 1 million balls per season. All official MLB baseballs are made by Rawlings from leather

tanned in Tennessee.

What USDA’s tweet failed to mention though is the baseballs are hand-made and produced

in Costa Rica.

Most MLB bats are made from lumber sourced from northern Pennsylvania and southern New York.

25 of the 30 professional stadiums have natural grass on their playing fields, thanks to some of the 1,465 farms

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USDA’s NASS

USDA’s NASS (National Agricultural Statistics Service) had a heck of an opening day on their own on Wednesday.

March 31

st

_{’s Prospective Plantings report was a major swing and an industry miss – on what is considered}

Opening Day for the 2021/22 corn and soybean season.

2021 corn plantings were seen at 91.14 million acres, more than 2 million acres below analysts’ average

pre-report estimates. While a 2-million-acre corn miss is big, the soybean acreage miss is even bigger! 2021 soybean

plantings were seen at 87.6 million acres, 2.4 million acres beneath the average pre-report guess.

We will talk more in depth

about these estimates in

the coming weeks and

months, since these are

the acres we must assume

until proved otherwise on

June 30.

This USDA NASS-provided

image shows principal

crop (row crops, plus hay,

lentils, etc) intentions

versus

final

acres

reported by percentage of

change.

If anything, we tend to

lose acres, historically

speaking.

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Changes by crop, year-on-year, are noted in the maps below. Here are a few observations:

Both Illinois and Iowa each

swapped out 400k acres of

corn for beans, while

Nebraska did the same

switch-a-roo on 300k.

The Dakotas are going all-in,

with an estimated

2-million-acre uptick each, in corn and

bean acres across the two

states in 2021.

After

two

water-logged

years, they will be planting

in the dust and hoping their

bins will bust (79% of SD

currently in drought, while

100% of ND is in drought

presently).

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D0 through D4

While we are on the subject of drought - it is best to touch on the current Drought Monitor, showing 63% of the

continental United States under one of the 5 drought classifications (D0 Abnormally Dry through D4

Exceptional Drought).

The difference one year can make is incredible with the current map on the left, and this week one year ago on

the right, below.

Even crazier are the change maps, with significant relief seen in western Iowa, Nebraska, Kansas, and the

eastern half of Colorado over the past month. Deterioration is evident elsewhere during the same time, like

the Dakotas as mentioned previously.

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Ac.

Prospective Plantings is all

about the ac (acres). With

corn and soybeans coming

in well under pre-report

expectations, it has most

analysts asking – where did

the acres go?

Soybeans saw the most

notable uptick, +4.5 mil ac

year on year. Winter wheat

was also a surprise, with a 1

mil

ac

uptick

from

December expectations (I

am not sure how you miss 1

mil ac of wheat that has

been in the ground for

months, but I digress),

totaling a 2.66 mil ac

increase

from

2020.

Sorghum (aka milo) was

another big winner, up 1 mil ac from last year and notably stealing corn acres in the west.

Speaking of corn, the net

change was up 325,000 acres

from 2020 – a far cry from the

sizable jump we all were

anticipating.

The image to the left shows

changes on a percentage

basis, with sorghum and

canola

understandably

leading the pack. With

China’s return to the U.S.

sorghum market lighting

basis on fire, and the canola

market trading near-record

highs – those large swings

make complete sense to me.

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Apr/May/Jun

Spring has officially sprung and with the March 31 acreage

report behind us, that leaves several important dates ahead

in April, May, and June.

For starters, NASS will officially begin reporting corn planting progress on Monday, April 5. Soybean planting

progress updates will not begin until two weeks later, on April 18.

One week from today on the 9th, we get the April WASDE (World Agricultural Supply and Demand Estimates),

where all eyes will be on demand. With U.S. corn export commitments at 2,588 million bushels and the USDA’s

current full-year 2,600-million-bushel projection, that leaves 12 million bushels to sell over the course of the

next 5 months. We have shipped more than 50% of current commitments, with known sales to China

representing about half of the 1,250 million bushels we need to ship prior to August 31 (keep your eye on that

one).

Similarly, U.S. soybean export commitments are 2,236 million bushels, with USDA using 2,250 million bushels

for the entire year. Soybeans are in a league of their own, however, as 90% of those sales have already left U.S.

soil.

Side note: FGIS (Federal Grain Inspection Service) is the arm of USDA’s AMS (Agricultural Marketing Service)

that establishes and maintains official grain standards while performing and reporting grain inspections for

export each week.

The May 12

th

_{WASDE will be a}

biggen too, as USDA plugs in

March 31’s relatively miniscule

corn

and

soybean

acreage

estimates into new crop balance

sheets. 2020/21 ending stocks

were already on a diet… 2021/22

appear as if they will be starting out

slim as well.

NASS will begin re-surveying

producers

for

their

planting

intentions the end of May through

mid-June.

Updated

acreage

estimates will be released on June

30 (in addition to updated old crop

stocks as of June 1).

Buckle up – the next few months

are guaranteed to be interesting!

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Final Thoughts – ACRONYMS & ABBREVIATIONS

Do you ever feel lost in acronyms and abbreviations?

Not just the wtfs, omgs, and other texting lingo that have suddenly been absorbed into the English language…

How about all those other acronyms?

The ones that have a heavy dose of influence on your business…

USDA (US Dept of Ag) takes the heat.

NASS (National Ag Statistics Service) reports the stuff.

FGIS (Federal Grain Inspection Service) inspects the bushels.

FAS (Foreign Ag Service) reports on our friends and foes around the globe.

We live or die by each monthly WASDE (World Ag Supply & Demand Estimate).

Not only do you have ac and bu to sort through, but ha (1 hectare = 2.47 ac) and mmt (mil metric tonnes aka

36.74 mil bu beans or 39.37 mil bu corn).

And then we could talk about yuan/mt on the DCE (Dalian Commodity Exchange), where May Chinese corn

futures are trading at 2,610 yuan/mt but I will save you the math and let you know that is $10.09 per bushel.

Marketing is hard enough on its own. Throw in a plethora of acronyms and abbreviations and things get extra

confusing, extra fast.

That is where RHAC comes in. The team here at Reding Hueber Ag Consulting has been there and done that.

We have a different approach with unparalleled real-world experience.

If you are interested in learning more about our distinctively different approach and services

– reply to this email or request a FREE trial

HERE

.

TTYL and have a Happy Easter!!