Illegal applicaiton of dicamba leads to charges

A southeast Missouri farmer has been indicted on federal charges of illegally applying dicamba and damaging crops in neighboring fields. A 53-count federal indictment was announced Tuesday against Bobby David Lowrey, 51, of Parma. He is accused of illegally applying dicamba on his cotton and soybean crops outside of Environmental Protection Agency guidelines , and lying to investigators when confronted about it.The indictment said crops planted by Lowrey in 2016, which cover 6,700 acres, were modified to be resistant to dicamba. Federal prosecutors say Lowrey didn’t follow the rules and then lied when the Missouri Department of Agriculture investigated after neighboring farmers reported crop damage. The indictment alleges Lowrey applied dicamba to cotton after planting and over the top on soybeans and then presented false spray records to investigators. Lowrey faces 49 counts of misapplication of a pesticide, three counts of obstruction of justice, and one count of making a false statement. He could face up to 20 years in prison and a $250,000 fine if convicted.

Contracts for Brazilian soybeans a possibility through the CME Group

The CME Group is considering the introduction of new contracts for Brazilian soybeans. The CME Group now has a strategic partnership with the B3 exchange in Brazil, but soybean contracts in that market have no volume.

An increase in earnings for Deere and Company

Deere and Company is reporting fourth quarter earnings of $785 million on earnings of $8.3 billion, an increase from $510 million one year ago. For the year, Deere says total revenue increased 17 percent to $9.4 billion.

Corn analysis

Corn closed the week $.05 1/2 higher. Last week, private exporters did not announce any sales.

In the weekly export sales report; U.S. corn sales, for the week ended 11/22/18, were reported at 49.9 million bushels, coming in solidly above market expectations and up from the previous week’s 34.4 million bushels, as well as above last year’s same-week sales of 23.6 million and were the largest in 8 weeks. In the weekly crop progress and conditions report; U.S. corn harvest is now 94 percent complete versus 95 percent expected, 90 percent last week, 94 percent last year and 96 percent average.

In the weekly EIA report, crude oil stocks were estimated at 450.5 mb, an increase of 3.6 mb versus1.0 mb increase expected. Gasoline stocks declined 0.8 mb versus expected increase of 1.0 mb.

Ethanol production averaged 1,048k bpd vs 1,042k the prior week. Demand needs improve for corn to have any chance of a meaningful rally. The US 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.

Soybeans analysis

Soybeans closed the week $.12 1/2 higher. Last week, private exporters announced sales totaling 388,748 mts of beans to an unknown destination.

In the weekly export sales report, U.S. soybean sales were 23.1 million bushels, right in the middle of market expectations and down slightly from the previous week’s 25.0 million bushels and were, once again, solidly below same-week year ago sales of 34.6 million bushels. Soybean sales last year over the next three three weeks averaged 63.8 million bushels/week. Soybean total commitments of 855 million bushels remain down 32 percenet from last year’s 1.262 billion bushels and sales will need to average roughly 27.1 million bushels/week in order to meet the USDA’s 1.900 billion bushel export projection.

In the weekly crop progress and conditions report, U.S. soybean harvest is also 94 percent complete versus 96 percent expected, 91 percent last week, 99 percent last year and 98 percent average.

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.