Syngenta is investing $400 million over the next five years in its Golden Harvest brand. That’s in addition to the $1.3 billion spent on research and development each year. Golden Harvest plans to double its seed breeding staff and increase trial testing by one-third.
Corn closed the week $.10 higher. Last week, private exporters announced sales of 255,000 mts of corn to an unknown destination.
Weekly export sales of corn totaled 69.0 mb (1,753,000 mt), all for the 2017-2018 marketing year. This put total marketing year sales at 1.547 bb, 9 percent less than the previous marketing year. In the weekly EIA report, weekly ethanol production was reported today at 1.044 million barrels per day compared to last week’s production at 1.068 million barrels per day. Ethanol stocks were reported at 23.0 million barrels compared to 22.8 million barrels last week. Forecasts for a cool, wet spring will making planting additional corn acres difficult, thus corn should find strength in the last half of March and early April as the market will need to secure acres to meet record demand. Highs for corn are likely to be scored during the spring planting timeframe or very early summer as values rally to secure enough planted acres to meet demand.
As price levels rise, producers should be offsetting price risk by making cash sales and using options to manage the risk.
Strategy and outlook
As prices rally during the winter months, producers look to sell the carry and lock in basis as it narrows. You can replace ownership with option or futures strategies. Producers should be making new crop sales on this rally.
Soybeans closed the week $.22 higher. Last week, private exporters announced sale of 497,000 mts of soybeans to an unknown destination; 450,000 mts of soybeans to China and 20,000 mts of bean oil to an unknown destination.
Weekly export sales of soybeans totaled 36.0 mb (980,000 mt), 31.5 mb (857,900 mt) of which were for the 2017-2018 marketing year. This put total marketing year sales at 1.674 bb, 13 percent less than the previous marketing year. The key pod setting stage in South America should be completed by March 15, leaving the market to remove any weather premium that may remain in values. With the South American growing season effectively over as well as an expectation for an increase in U.S. seeded acres in 2018, look for prices to work lower after the March 31 stocks and acreage report. In the acreage report, the trade should be expecting an increase in U.S. soybean seedings of 500,000 to 1 million acres. If wet growing conditions materialize this spring as forecast, corn will rally to buy acres as the market anticipate farmers will shift corn acres to soybeans. A very wet forecast will likely limit the upside for soybeans.
Strategy and outlook
As prices rally, producers look to sell the carry and lock in basis as it narrows. You can replace ownership with option or futures strategies. Producers should be making new crop sales and hedges.
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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