Continued Chinese negotiations and getting settled back into the routine of receiving regular USDA information were the highlights of last week’s trade. The markets were closed Feb. 18 for President’s Day, but came back Tuesday to a rough start.

Ideas that perhaps U.S.-Chinese negotiations weren’t going quite as well as perceived at the end of the previous week were only compounded by rumors that African swine fever had been discovered in Canada. While the rumor of ASF being found in North America seems to have come from a trader misreading an article talking about what would happen if the disease were found, the market reaction was very real, moving sharply to the downside, breaking key support levels on its way.

However, cooler heads prevailed, allowing the soybean market at least to recover a good portion of its losses before the close, firming enough to poke above those important technical levels.

Last Wednesday brought renewed trade negotiations, this time in Washington, D.C. While headlines last week were a bit more sporadic than seen recently, the conversation seemed relatively positive. At this point it appears both countries know which issues to focus on, with progress reportedly being made.

Headlines Thursday claimed China is willing to purchase another $30 billion in U.S. agricultural products. This would be a huge development, as reports indicate the purchases would be in addition to the estimated $20 billion in pre-trade war imports, taking the total U.S. agricultural export figure to $50 billion.

While many traders are unsure of how our infrastructure will be able to handle such a large amount of exports, others are excited this could result in significant increases in what have so far been nontraditional exports. At this point it appears corn, ethanol, pork, beef and poultry would be the biggest beneficiaries.

Talks were to wrap up last Friday afternoon, and with this week bringing on the March 1 deadline, it will be imperative we have a good idea what the final leg of negotiations will look like. As of Friday, many believed we would see a 60-day extension as long as President Trump and his administration feel the right progress is being made.

Obviously, anything less than an agreement or an extension indicating an agreement is close could weigh heavily on the market.

As of Friday morning, we were finally caught up on USDA export sales information as the department released the previous six weeks’ worth of information. As a whole the numbers came in within the realm of expectations, with little in the way of surprises.

We are seeing some point to slower-than-expected corn sales as a negative factor, though shipments still remain above what is needed to make USDA expectations, and this year’s export pace has been a little against trend with many of the sales made much earlier than normal due to limited global supply availability the last half of the year.

We will be watching South American production closely, though, as both Argentina and Brazil appear to be sitting nicely when it comes to corn production potential.

The USDA also released its Ag Outlook Forum figures last week. The Forum is put on every year and focuses heavily on what the economics point to when it comes to both short- and long-term production trends. The numbers released are compiled by economists, as opposed to the survey-based planting intentions report, but give us an indication of what we can expect in the year ahead.

In the coming crop year, the USDA expects farmers to plant 92 million acres of corn, with a trendline yield of 176 bushels per acre and a 1.65 billion-bushel carryout – slightly below the carryout estimates for the 2018/19 crop year. For soybeans they expect 85 million acres to be planted, yielding 49.6 bushels an acre with carryout falling slightly year over year to 845 million bushels.

Wheat acreage is expected to be lower, with better yields resulting in a slightly smaller carryout in 2019/20 than seen this crop year.

At this point traders are anticipating slightly lower corn acres with slightly higher soybean acres and subsequent adjustments as a whole based on the acreage difference. The million-dollar question remains spring planting conditions and logistics.

With more than 2 feet of snow sitting in many parts of the Western Corn Belt and more on the way, it is becoming clearer by the day an early spring is not in the cards. With fall fieldwork lacking, the idea that corn acres could see a significant increase this year is highly unlikely.

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.