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BRIAN HOOPS

By Staff | Nov 7, 2014

Class action suit

Syngenta is facing numerous lawsuits over the release of Agrisure Viptera corn. Now, Syngenta is in court as the plaintiff.

A federal appeals court has ordered a lower court to review a 2011 case to determine if Syngenta had the standing to sue Bunge North America for false advertising.

Syngenta sued Bunge when it refused to accept Viptera corn.

In 2012, a district court ruled in Bunge’s favor, but that decision is now being reviewed.

Brazil crop yields

Brazil’s crop supply agency forecasts another record soybean crop in Brazil next year. Conab pegs the crop at 88.8 to 92.4 million tons, up from this year’s record 86.1 million tons.

The increase will come mostly from an estimated 3.5 percent increase in soybean acres.

Brazil’s corn crop is forecast at 76.6 to 78.9 million tons, below this year’s crop of 79.9 million.

Conab’s soybean crop forecast is below USDA’s estimate of 94 million tons, but the corn forecast is above USDA’s 75 million ton figure.

Monsanto’s income up

Monsanto’s fiscal year 2014 results are slightly above the high end of its guidance range, with net income of $2.7 billion, 8 percent more than fiscal 2013.

Monsanto reports a net loss of $156 million in the fourth quarter, compared with a net loss of $249 million in the same period last year.

Net sales for the full fiscal year totaled $15.9 billion, up 7 percent from last year, driven by the strength of the seeds and genomics segment.

2014 was a record year for Monsanto’s soybean business, the company reported.

CORN ANALYSIS

Corn closed the week 23.75 cents higher.

Last week, private exporters did not report any private sales.

Weekly corn export sales showed 19 million bushels, the smallest sales in this marketing year.

In USDA’s weekly crop progress report, the U.S. corn harvest was reported at 46 percent complete. This compares to 31 percent last week, 56 percent last year and 65 percent on average.

Plenty of carry is offered this year, giving producers an incentive to place corn into storage with the opportunity to earn a higher price later.

Unfortunately, the current fundamental situation does not indicate the corn market will be able to meet the carry being offered.

Thus, producers should sell the carry if they have on-farm storage and look to re-own later if fundamentals change.

Corn normally has a seasonal rally early into October and that continues during the month, before prices stall and seasonally work lower until the Thanksgiving timeframe.

Corn is following that pattern and prices look to work lower under the weight of record yields unless additional harvest delays develop. We have recommended producers to move to 100 percent of this year’s inventory on this rally and transfer the pricing risk via the futures and options market.

Strategy and outlook: Producers are 100 percent sold of the 2014/15 crop. They sold 10 percent of the 2015 production.

SOYBEANS ANALYSIS

Soybeans closed the week 59 cents higher.

Last week, private exporters reported sales totaling 252,000 metric tons to China and 110,500 mt to an unknown destination.

Weekly export sales of soybeans showed sales of 49 mb.

In USDA’s weekly crop progress report, the U.S. soybean harvest was reported at 70 percent complete. This compares to 53 percent last week, 75 percnet last year and 76 percent on average.

Soybeans normally have a seasonal rally early in October and that continues during the month, before prices stall and seasonally work lower until the Thanksgiving timeframe.

Soybeans are following that pattern and prices look to work lower under the weight of record yields unless additional harvest delays develop.

We have recommended producers to move to 100 percent of this year’s inventory on this rally and transfer the pricing risk via the futures and options market.

Demand for soybean meal in the eastern soybean belt has driven prices higher.

This is not a lack-of-supply driven rally, rather it’s a logistics rally as processors are having a tough time getting their hands on product.

However, the rally has driven demand to cheaper Brazilian meal, which is a bearish development as the U.S. needs all the demand it can get to chew through the 450 mb of projected soybean ending stocks.

Strategy and outlook: Producers are 100 percent sold of 2014/15 production. They sold 10 percent of 2015 production.

This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.

Brian Hoops can be reached at (605) 660-1155.

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