Corn analysis

Corn closed the week five cents higher. Last week, private exporters did not announce any private sales.

In the weekly export sales report; weekly export sales of corn showed a total of 43.9 mb (1,114,900 mt) with 38.8 mb (985,700 mt) for the 2017-2018 marketing year. This put total marketing year sales at 2.072 bb, even with the previous marketing year. In the weekly crop progress report, NASS reported U.S. corn planting at 62 percent complete versus 39 percent last week, slightly behind 68 percent last year and 63 percent average.

The central corn belt made huge progress, but the north remains very slow due to wet conditions. Informa updated their estimate of 2018 planted acres. Informa sees corn acres at 89 million versus 88 million estimated in March by the USDA.

In the weekly EIA report, crude oil inventories came in at -1.4 mb versus -2.0 expected. Ethanol production was reported at 1.058 million barrels per day, up 18k barrels per day. This marks the third consecutive week of increased ethanol production. China, Brazil and Argentina are all experiencing production problems this year with their corn crops. This places more emphasis on the 2018 corn crop. Anything less than record production will result in smaller ending stocks and be bullish to prices.

Strategy and outlook

Producers should have either made sales and re-owned with call options or buy puts to establish a price floor.

Soybeans analysis

Soybeans closed the week $.04 1/4 lower. Last week, private exporters reported sales of 200,000 mts of soybeans to an unknown destination and cancelations of 949,000 mts of previous soybean sales to an unknown destination.

Weekly export sales of soybeans showed a total of 18.6 mb (506,600 mt) with 10.4 mb (319,700 mt) for the 2017-2018 marketing year. This put total marketing year sales at 2.036 bb, 3 percent less than the previous marketing year. In the weekly crop progress and conditions report, U.S. soybean planting is now 35 percent complete versus 15 percent last week and ahead of 29 percent last year and 26 percent average.

NOPA crush report came very near expectations with its members reporting monthly crush at 161.0 million bushels of soybeans in April, in line with market expectations of 161.1 mb and a very impressive 15.7 percent above last year’s April crush of 139.1 million bushels.

This was down from the all-time record high monthly crush of 171.9 million bushels set in March. Informa forecast U.S. soybean acres to increase to 89.4 million versus 89.0 million estimated in March.

Strategy and outlook

Until a new trade agreement with China is reached, the high for the year is likely in place. Producers should have been making 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.