The USDA is looking to find ways to shield farmers from the growing trade conflict between the United States and China, a department official said, without providing details of options under review.

“There’s a lot of different options out there” to protect farmers, said USDA Farm Production And Conservation Under Secretary Bill Northey, speaking to Reuters after a commodity conference in Kansas. Northey was speaking after President Donald Trump ordered officials to come up with an additional round of tariffs directed at China.

Corn analysis

Corn closed the week $.10 3/4 higher. Last week, private exporters announced sale of 100,000 mts of corn to Egypt.

Weekly export sales of corn showed a total of 35.8 mb (909,300 mt) with 35.4 mb (898,300 mt) for the 2017-2018 marketing year. This put total marketing year sales at 1.864 bb, 2 percent less than the previous marketing year. In the weekly EIA report, crude oil stocks declined by 4.6 mb vs a 2.0 million barrel increase that was expected. Ethanol production was 1,038,000 bpd vs 1,039,000 bpd last week.

April will have commercial and seasonal traders buying weakness for a potential summer weather rally as the uncertainty of the growing season will have end users very nervous about weather and the size of this year’s crop. Midwest U.S. producers will begin seeding corn acres by mid- April and weather will become very important to pricing by May.

If the month of April is wet and hampers producers planting efforts, look for December corn to rally in an effort to entice producers to plant corn later, rather than switch acres to soybeans.

Strategy and outlook

As producers get planters out of their sheds and begin seeding the 2018 crop, look to either make sales and reown with call options or buy puts to establish a price floor.

Soybean analysis

Soybeans closed the week $.09 3/4 lower. Last week, private exporters announced sales of 783,500 mts of beans to an unknown destination; 129,000 mts of soybeans to China; 130,632 mts of beans to Mexico and 20,000 mts bean oil to an unknown destination.

Weekly export sales of soybeans showed a total of 54.8 mb (1,491,200 mt) with 41.6 mb (1,133,000 mt) for the 2017-2018 marketing year. This put total marketing year sales at 1.892 bb, 7 percent less than the previous marketing year. During the month of April, the soybean market has one simple job, to compete against corn this spring so it does not lose any acres.

In April, soybeans should find support from an effort to return to profitability to encourage farmers to not switch from corn to soybeans. Also, a planting season that is slowed by heavy rains, will encourage farmers to switch plantings of corn over to soybeans, therefore look for soybeans to maintain their premium to corn to ensure adequate supplies of soybean stocks.

Strategy and outlook

As producers get planters out of their sheds and begin seeding the 2018 crop, look to either make sales and reown with call options or buy puts to establish a price floor.

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.