Corn closed the week 12 cents lower. Last week, private exporters did not report any private sales. Weekly export sales of corn showed a total of 20.7 mb (525,700 mt) with 4.0 mb (102,400 mt) for the 2016-2017 marketing year. This put total marketing year sales at 2.227 bb, still 13 percent ahead of the previous marketing year. In the weekly crop conditions report, NASS reported weekly US corn crop conditions 62 percent good/excellent versus 62 percent expected, unchanged from last week and well below the 75 percent rating from last year.
Conditions declined in eastern belt and improved in west. 29 percent of the crop is dented with 76 percent of the crop in the dough stage. Weekly EIA report showed ethanol production came in at 1.052 mil bbl/day last week, down 7,000 bbl/day from the previous week. Stocks are 21.5 mil bbl vs 21.8 mil bbl prior week and crude stocks were -3.3 mil bb. An early frost during the kernel filling stage would send prices higher as a killing frost could potentially hurt yields. Look for commercial and end user interests to become buyers during the early stages of harvest as they will try to buy when the basis levels are largest. A significant low at the end of August is likely due to heavy selling of old crop corn.
Strategy and outlook
Producers should only make sales that address cash flow need during harvest and store balance of production.
Soybeans closed the week $.07 higher. Last week, private exporters reported sale of 462,000 mts of soybeans to China; a cancelation of 640,900 mts previously sold to China, 758,200 mts of soybeans to an unknown destination and 105,500 mt soybean meal to Thailand.
Weekly export sales of soybeans showed a total of 59.1 mb (1,608,600 mt), including cancellations of 14.7 mb (400,300 mt) for the 2016-2017 marketing year. These cancellations were from China (358,000 mt) and Canada (20,700 mt). Total old-crop sales dropped to 2.231 bb, 15 percent above the previous marketing year. In the weekly crop conditions report, US soybean crop conditions improved to 60 percent good/excellent versus 60 percent expected, 1 percent better than last week and well below last year’s 72 percent rating. Conditions declined in eastern belt and improved in west. 87 percent of the crop is setting pods and 97 percent is blooming.
Last year, the USDA forecast yields at 48.9 bpa with ratings at 72 percent good/excellent. This year, the USDA is pegging yields at 49.4 bpa with ratings at 59 percent good/excellent.
Last week, the Department of Commerce announced they will impose countervailing duties on Argentine biodiesel imports of 50 percent-64 percent, higher than expectations. This is bullish for soybean oil and the US biodiesel industry as a whole. An early frost should send prices sharply higher, allowing producers a final opportunity to make sales prior to harvest.
Strategy and outlook
Producers should have made sales that address cash flow need during harvest and established downside protection on the balance.
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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