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By Staff | Jul 7, 2017

Syngenta AG was ordered to pay $217.7 million to a group of Kansas farmers who claimed the company carelessly marketed its genetically modified corn seed, causing contamination of U.S. crops and a rejection of export sales to China by officials there. A Kansas jury issued the verdict Friday, June 23, in the first trial brought by U.S. farmers alleging Syngenta caused five years of depressed corn prices. Several other trials are pending as lawyers pursue suits on behalf of some 350,000 corn growers claiming as much as $13 billion in losses. The win gives momentum to claims by farmers from more than 20 states who are suing the Swiss agrochemical giant. Syngenta faces its next class action in a Minnesota court in August, where farmers are seeking more than $600 million. The Kansas City, Kan., jury awarded only compensatory damages and no punitive damages. The farmers’ lawyers had asked for $217.7 million for lost sales plus punitive damages. Syngenta said it would appeal the verdict.

Corn analysis

Corn closed the week $.12 1/2 higher. Last week, private exporters did not report any sales. Weekly export sales of corn showed a total of 15.1 mb (384,600 mt) with 12.4 mb (316,200 mt) for the 2016-2017 marketing year. This was above the 4.8 mb (123,100 mt) needed this week to be on pace with USDA’s June demand projection of 2.225 bb. In the weekly crop progress and conditions report, NASS reported U.S. corn crop conditions at 67 percent good/excellent versus 68 percent expected (67-70 percent range of ideas), unchanged from 67 percent last week and below last year’s 75 percent. Conditions improved 3 percent in Illinois (62 percent), Indiana 1 percent (46 percent), Iowa 1 percent (79 percent) and Missouri 3 percent (66 percent). Conditions deteriorated in Minnesota 3 percent (78 percent), North Dakota 5 percent (56 percent), South Dakota 3 percent (46 percent) and Nebraska 4 percent (74 percent).

In the quarterly acreage report, the USDA reported planted acres at 90.886 million acres, above trade estimates and compares to the March 31st estimate of 89.996 million and last year at 94.004 million. Quarterly grain stocks as of June 1st were estimated at 5.223 billion bushels compared to 8.616 billion last March and 4.700 billion this time last year. Hot and dry weather during pollination is the last hope for a significant rally during the summer.

Strategy and outlook

Look to make sales and lock in prices during rallies over the next 4 weeks.

Soybeans analysis

Soybeans closed the week $.40 1/4 higher. Last week, private exporters reported sale of 110,000 mts to Bangladesh.

Weekly export sales of soybeans showed a total of 11.6 mb (314,200 mt) with nearly all for the 2016-2017 marketing year. This raised total sales to 2.181 bb, still 6 percent above USDA’s June demand projection of 2.050 bb. U.S. soybean crop conditions fell 1 percent to 66 percent good/excellent versus 68 percent expected (67-69 percent range of ideas), 67 percent last week and 72 percent last year. Conditions were unchanged in Iowa at 74 percent g/e, improved in Illinois 3 percent to 70 percent, Missiouri 1 percent (64 percent) and deteriorated in Minnesota 1 percent (76 percent), North Dakota 5 percent (53 percent), South Dakota 9 percent (39 percent), Nebraska 2 percent (70 percent) and Indiana 1 percent (51 percent).

In the quarterly acreage report, smaller than expected soybeans acres sent the market soaring. The acreage number of 89.573 million acres was below pre report estimates and compares to 89.482 million last March and 83.433 million acres last year. Grain stocks as of June 1st came in at 0.963 million bushels, below the average trade estimate of 993 mb. This compares to 1.735 billion bushels last March and 872 million bushels this time last year.

Strategy and outlook

Producers need to make new crop sales on rallies during the next 4 weeks.

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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