Decline in farm income reported

The Kansas City Fed reports the decline in farm income did accelerate from July to September. Despite interest rates on the rise, the fed says rates on farm loans still remain well below pre-recession levels. The Kansas City Fed covers the western half of Missouri, the central Plains, Wyoming and Colorado. The fed says more than half of bankers reported lower farm income, compared to a year ago in that district. Less than 5 percent reported higher income. The Kansas City Fed shows farmland values remain stable.

DuPont to pay back the state

DuPont owes the state of Iowa $10.5 million after closing and selling its cellulosic ethanol plant in Nevada, according to the Des Moines Register.

In sum, the company will repay all but $3.7 million it received in 2011 in incentives. Cellulosic ethanol uses by products such as corn cobs, stalks and residue to create the renewable fuel. When DuPont closed the plant it laid off 90 workers, Des Moines Register reports. It will sell the plant to Verbio North America. The state of Iowa awarded DuPont $17.5 million in state support four years ago, the Register continues.

Corn analysis

Corn closed the week $.05 3/4 lower. Last week, private exporters announced sales totaling 270,000 mts of corn to South Korea and a cancelation of 200,588 mts corn sale to an unknown destination.

For the week ending November 15, USDA reported 34.5 million bushels (mb) (877,400 metric tons (mt)) of corn export sales for 2018-19 and 200,000 bushels (5,000 mt) for 2019-20.

Total commitments of 957 million bushels in 2018-19 are up 13 percent from a year ago. In the weekly crop progress and conditions report, U.S. corn harvest advanced to 90 percent complete versus 91 percent expected, 84 percent last week, 89 percent last year and 93 percent average.

In the weekly EIA report; U.S. ethanol production declined solidly to 1.042 million barrels/day (306 million gallons/week) from 1.067 mbpd (314 mil gal/week) and was the lowest production in four weeks. Crude oil stocks increased 4.85 mb versus estimates for an increase of 2.90 mb. Demand needs improve for corn to have any chance of a meaningful rally. The U.S. window for opportunity to export corn ends in the spring with a larger Ukraine and South America corn crop competing for world market share.

Strategy and outlook

Producers should look to sell the carry for spring or summer months and use options to re-own and manage risk. Don’t store unpriced crop.

Soybean analysis

Soybeans closed the week $.11 3/4 lower. Last week, private exporters announced sales totaling 243,567mts of beans to an unknown destination.

In the weekly export sales report, the USDA reported 25.0 mb (680,500 mt) of weekly soybean export sales for 2018-19 and 100,000 bushels (3,900 mt) for 2019-20. Total commitments of 831 mb in 2018-19 are down 32 percent from a year ago.

In the weekly crop progress and conditions report, U.S. soybean harvest moved to 91 percent complete versus 93 percent expected, 88 percent last week, 96 percent last year and 96 percent average. The upcoming G-20 summit will be key for the soybean market. The U.S. soybean export profile badly needs some positive export news.

Strategy and outlook

Producers should look to sell the carry for spring or summer months and use options to re-own and manage risk. Don’t store unpriced crops.

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.