Corn closed the week $.01 3/4 higher. Last week, private exporters reported sales of 386,200 mts to Mexico.
Weekly export sales of corn showed a total of 39.1 mb (992,600 mt) with 7.4 mb (188,400 mt) for the 2016-2017 marketing year. This put total marketing year sales at 2.235 bb, 15 percent ahead of the previous marketing year. In the weekly crop conditions report, NASS reported US corn crop conditions at 62 percent good/excellent versus 63 percent expected (61-64 percent range of ideas), unchanged from last week and still well below 75 percent last year. The central/eastern belt posted small declines. This crop is the fourth lowest rated of the last 10 year. The USDA will provide traders with the next glimpse of market information on September 12 with the monthly supply/demand data. The trade will be looking for the USDA to slightly decrease their production figure.
The USDA should be conservative with their estimate as they will most likely wait until more yield data comes in prior to making a major adjustment to their crop estimates. From the demand side, look for the USDA to leave ethanol and feed usage unchanged while slightly decreasing exports. Harvest data will determine the long term direction for the corn market. If prices begin to firm, watch the downtrend lines on the daily charts for a technical breakout as that will be a buy point for the fund traders.
Strategy and outlook
Producers should only make sales that address cash flow need during harvest and store balance of production.
Soybeans closed the week $.05 1/4 higher. Last week, private exporters reported sales of 329000 mts of soybeans to China and 132,000 mts of soybeans sold to an unknown destination.
Weekly export sales of soybeans showed a total of 61.8 mb (1,682,300 mt), with 4.5 mb (123,200 mt) for the 2016-2017 marketing year. This put old- crop sales at 2.236 bb, 15 percent above the previous marketing year. In the weekly crop conditions report, NASS reported US soybean crop conditions at 61 percent good/excellent versus 60 percent expected (59-61 percent range of ideas), a 1 percent improvement from last week, and well below the 73 pecent rating last year.
The western belt noted improvements. This crop is the 4th lowest rated of the last 10 years. The USDA will provide traders with the next glimpse of market information on September 12 with the monthly supply/demand data. The USDA should be conservative with changes to their estimate as they will most likely wait until yield data comes in prior to making a major adjustment to their crop estimates.
From the demand side, look for the USDA to leave crush mill usage unchanged while slightly increasing exports. This will create slightly smaller ending stocks for soybeans. Barring a major surprise, look for rallies to be sold by traders as they want to take profits ahead of the upcoming harvest and reposition when yield results become known.
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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