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BRIAN HOOPS

By Staff | Mar 1, 2017

Planting decisions for U.S. corn and soybean farmers are a bit of a no-brainer this year. After confronting the prospects of losses on both crops in 2016, soybeans are now more profitable, which means the world’s largest grower may harvest a record crop for a second straight year.

While corn is still king – it’s the largest U.S. crop by value and volume – farmers from North Dakota to Texas are preparing to use more of their land on soybeans instead. That’s because cash prices have jumped 9.2 percent since the 2016 harvest, creating the widest premium over corn in 29 years, and the oilseed is cheaper to grow.

Soybean prices in 2016 posted the first annual increase in four years, and they are up in 2017. To maximize revenue and take advantage of the rally, American farmers probably will expand soybean planting 5.8 percent to a record 88.27 million acres, the third increase in four years, according to a Bloomberg survey of 25 trading firms and analysts.

Corn sowing may fall 3.6 percent to 90.77 million acres, the biggest drop in three seasons.

CORN

ANALYSIS

Corn closed the week four cents lower. Last week, private exporters announced sales of 111,200 metric tons of corn to an unknown destination and a cancelation of a previous sale of 136,000 mt of corn to South Korea.

Weekly export sales for the week ending Feb. 16 were 39.7 million bushels of corn. Annual corn sales are 1.68 billion bushels, up 61 percent from last year.

Weekly ethanol data was also very supportive as the EIA ethanol numbers showed another week of strong ethanol production. For 17 consecutive weeks, production has exceeded 1 million barrels a day.

This has led to a big build in ethanol stocks to near record levels. Stocks have increased for seven straight weeks. The USDA Outlook report is expecting a 2.2 bb carryout for 2017/18. It reported an estimated 90 million planted acres of corn to be planted this spring and an average farm price of $3.50 per bushel.

Traders don’t want to be short corn going into the springtime frame with strong demand, reduced planted acres in 2017 and the possibility of weather problems sending corn prices sharply higher into the summer. If you have been making cash sales, look for weakness as a buying opportunity.

Strategy and outlook: A rally into weekly resistance was a great time to sell inventory, look to re-own on support as commercials have been big sellers lately.

SOYBEANS

ANALYSIS

Soybeans closed the week 20.5 cents lower.

Last week, private exporters did not report any private sales. Weekly export sales for the week ending Feb. 16 saw 16.3 mb of soybeans. For the year to date, soybean sales are 1.9 bb, up 25 percent from the previous year.

The USDA Outlook Conference reported the government is

expecting 88 million acres of soybeans to be planted with a 420 mb carryout for 17/18. The average farm price of $9.60 per bushel is expected for 2017/18.

Soybeans are struggling to maintain the hefty premiums in prices given the record harvest data coming from South America. Coupled with increased 2017 U.S. planted acres, the month of March could be a bearish month for prices if previous sales begin to be canceled.

Demand trends are currently strong, but weather help will be needed to exceed weekly resistance levels.

Strategy and outlook: Maintain re-ownership strategies into the summer months.

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. 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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BRIAN HOOPS

By Staff | Mar 1, 2017

Planting decisions for U.S. corn and soybean farmers are a bit of a no-brainer this year. After confronting the prospects of losses on both crops in 2016, soybeans are now more profitable, which means the world’s largest grower may harvest a record crop for a second straight year.

While corn is still king – it’s the largest U.S. crop by value and volume – farmers from North Dakota to Texas are preparing to use more of their land on soybeans instead. That’s because cash prices have jumped 9.2 percent since the 2016 harvest, creating the widest premium over corn in 29 years, and the oilseed is cheaper to grow.

Soybean prices in 2016 posted the first annual increase in four years, and they are up in 2017. To maximize revenue and take advantage of the rally, American farmers probably will expand soybean planting 5.8 percent to a record 88.27 million acres, the third increase in four years, according to a Bloomberg survey of 25 trading firms and analysts.

Corn sowing may fall 3.6 percent to 90.77 million acres, the biggest drop in three seasons.

CORN

ANALYSIS

Corn closed the week four cents lower. Last week, private exporters announced sales of 111,200 metric tons of corn to an unknown destination and a cancelation of a previous sale of 136,000 mt of corn to South Korea.

Weekly export sales for the week ending Feb. 16 were 39.7 million bushels of corn. Annual corn sales are 1.68 billion bushels, up 61 percent from last year.

Weekly ethanol data was also very supportive as the EIA ethanol numbers showed another week of strong ethanol production. For 17 consecutive weeks, production has exceeded 1 million barrels a day.

This has led to a big build in ethanol stocks to near record levels. Stocks have increased for seven straight weeks. The USDA Outlook report is expecting a 2.2 bb carryout for 2017/18. It reported an estimated 90 million planted acres of corn to be planted this spring and an average farm price of $3.50 per bushel.

Traders don’t want to be short corn going into the springtime frame with strong demand, reduced planted acres in 2017 and the possibility of weather problems sending corn prices sharply higher into the summer. If you have been making cash sales, look for weakness as a buying opportunity.

Strategy and outlook: A rally into weekly resistance was a great time to sell inventory, look to re-own on support as commercials have been big sellers lately.

SOYBEANS

ANALYSIS

Soybeans closed the week 20.5 cents lower.

Last week, private exporters did not report any private sales. Weekly export sales for the week ending Feb. 16 saw 16.3 mb of soybeans. For the year to date, soybean sales are 1.9 bb, up 25 percent from the previous year.

The USDA Outlook Conference reported the government is

expecting 88 million acres of soybeans to be planted with a 420 mb carryout for 17/18. The average farm price of $9.60 per bushel is expected for 2017/18.

Soybeans are struggling to maintain the hefty premiums in prices given the record harvest data coming from South America. Coupled with increased 2017 U.S. planted acres, the month of March could be a bearish month for prices if previous sales begin to be canceled.

Demand trends are currently strong, but weather help will be needed to exceed weekly resistance levels.

Strategy and outlook: Maintain re-ownership strategies into the summer months.

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. 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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