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BRIAN HOOPS

By Staff | Jan 16, 2015

Growing ethanol

The National Corn Growers Association’s ethanol committee is investigating options to grow the ethanol market on many fronts.

These include integrating higher ethanol blend compatibility into plans to update the nation’s aging fuel infrastructure; continuing to expand public acceptance

and support for ethanol outside the Corn Belt; and evaluating the benefits of a national ethanol brand to aid in consumer identification at the pump.

Fires employee

Morgan Stanley fired an employee it said stole data, including account numbers, for as many as 350,000 wealth-management clients and posted some of the information online.

The bank alerted law enforcement and found no evidence that clients lost any money, New York-based Morgan Stanley said in a statement last week.

The firm said it detected account information for about 900 clients on an external website and promptly had it removed.

“Morgan Stanley takes extremely seriously its responsibility to safeguard client data, and is working with the appropriate authorities to conduct and conclude a thorough investigation of this incident,” the company said.

CORN ANALYSIS

Corn closed the week 4 cents higher.

Last week, private exporters reported sales of 136,000 metric tons of corn to South Korea and 116,000 mt of sorghum to an unknown destination.

Weekly export sales showed corn sales at 15 million bushels, a marketing-year low.

Annual corn sales now have reached 1.076 billion bushels and are now 32 mb behind a year ago.

This month’s supply/demand report has the potential to be a major market mover as the USDA will issue the final production forecast for the 2014 crop and update the demand figures.

Export forecasts are nearly identical to last year at this time. Traders are going to look for the USDA to increase its final 2014 corn production estimate, but cut harvested acreage and lower the supply forecast.

The quarterly stocks figure will be the wild card as estimates for quarterly usage has varied by 600 mb over the last three years.

March corn has had major moves in each of the last six years, three higher and three lower. Going into the spring, traders will want to buy a break in prices due to the reduced acres and the threat of adverse summer growing season sending prices sharply higher.

Strategy and outlook: Producers are 100 percent sold of the 2014/15 crop and sold 10 percent of 2015 production. They should consider selling another 15 percent at $4.50 December, and buy July 400 calls if July falls to $3.80.

SOYBEANS ANALYSIS

Soybeans closed the week 45.5 cents higher.

Last week, private exporters announced sales totaling 594,000 mt to China.

Weekly export sales of soybeans were 33 mb. Annual sales have now reached 1.589 bb, up 169 mb from a year ago.

The huge demand base for soybeans is estimated at record large overall and highlighted by record strong export demand and a strong crush figure.

Ending stocks are forecast to tighten to under 400 mb.

The market has been anticipating a record soybean crop in South America and updates on this year’s production from South America will be a major driving force for prices throughout the winter.

This week’s supply and demand report has the potential to be a major market mover as the USDA will issue the final production forecast for the 2014 crop and update the demand figures.

Export forecasts are nearly 60 mb above last year at this time and with the ongoing strong sales, look for the USDA to again tighten balance sheets and increase exports.

Traders are going to look for the USDA to decrease their final soybean production estimate and to increase their demand estimates, slowly tightening the balance sheets.

Quarterly stocks will be the wild card as the variance compared to a year ago is the entire carryover stocks level.

Strategy and outlook: Producers are 100 percent sold of 2014/15 production. They sold 10 percent of 2015 production. They should consider selling another 15 percent at $10.95 November if July falls to $10.

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. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, 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.

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

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