USDA’s chief economist, Robert Johansson, says the USDA will not issue the January WASDE report. Instead, the USDA will issue a February WASDE report that will include information that would have been in the January 11th report.

The crop production and grain stocks that were scheduled for January 11th are expected to be released on February 8th as well. Johansson also stated that the Outlook Forum will occur on February 21st and 22nd unless funding lapses before that date. It’s expected that by March all reports should be on track with the 2019 schedule.

Export sales numbers have built up some optimism in the trade that some bullish numbers will be revealed once they are released. The soybean trade is hoping there will be come positive data to support the export program.

However, with soybean exports running nearly 500 million behind the estimates, catching up to the USDA projection is no small task. Harvest, in Brazil, is running ahead of normal and those early harvested beans offered two percent below current U.S. values. It appears the Chinese want to make a deal to resolve the trade war and may use buying U.S. soybeans to help make a deal. Analysts feel the U.S. may be asking for more than the Chinese can offer in the short term.

Despite the delay from the government shutdown, the EPA said they still feel they can get reforms in place for E15 in time for summer gasoline usage. That was the EPA’s original goal, and they still feel it can be completed on time. E15 was ban from summertime usage as it was previously thought to increase smog problems. Researched proved that was not the case leading to the push for year around E15 use, promoting higher ethanol blend rates and increased corn usage.

African swine fever still remains a topic in the markets, with new cases being reported weekly. Estimates show that 1 million hogs have been culled so far, across 24 providences and the number will only increase. It’s believed that scientists are working on a vaccine but that could take up to 10 years before they have a working vaccine. As it stands today, the effects of ASF are expected to last 5-7 years.

Export inspections for week ending January 24th came in lower for corn and soybeans compared to last week. Corn inspected for export came in at 35.2 million bushels, with a majority of inspections headed to Mexico and Japan and a smaller amount to China.

The corn total was down almost 21 percent from the week prior but still ahead of the year-to-date pace compared to last year. Soybeans were at 34.2 million bushels, with China, Egypt, and Japan being the main destinations. This was down about 19 percent from the previous week. Wheat loadings totaled 13.3 million bushels, 6 million below last week.

Weekly ethanol production for the week ending January 25th saw a reduction from last week of roughly 19 thousand barrels. Total U.S. ethanol stocks saw a build of 479 thousand barrels of ethanol for a total of 23.98 million barrels. In relation to the past ten years, U.S. stocks are still at nearly record high inventory levels. A notable increase was found in the gulf coast where typically two thirds of ethanol is exported, specifically in the Galveston and New Orleans areas.

Export sales were released for the first time since the government shutdown this week. Sales released were for the week of December 20th. Corn sales totaled 66.9 million bushels, which was down from the previous week’s figure by 11 million bushels but 28 percent higher than the previous four week average. Soybean sales were below their prior week’s total by 16 million bushels totaling 87.9 million bushels. This is a large 92 percent increase from their 4 week average. Wheat sales came in above the prior week but slightly below the 4 week average at 19.3 million bushels.

The technical picture in soybeans is starting to breakdown. March futures have now closed under the 200 day moving average of $9.22, a few days in a row. Since late September, March futures have been in an up trending 82 cent range. After failing to close above the January 7th high of $9.27 , the trend of higher highs and higher lows has been broken. Support remains in place at the 50 day moving average of $9.08.

Soybeans were also pressured much of the week as Brazil’s weather has been less threatening this week than in recent weeks. Private firms continue to make reductions to crop production estimates. Trade is become less concerned with cuts as it is well known that supplies are burdensome. When looking at combined soybean production from Brazil and Argentina, it is expected that this year will likely be higher than each of the past 5 year’s production with the exception of 2017. That year the combined production totaled 180 MMT.

Another factor pressuring soybeans, is the looming soybean export discrepancy between actual shipments and USDA forecasts. Now that it has been stated that the USDA will release their delayed January report, many are concerned how large of a reduction will be made. Currently, shipments are 482 million bushels behind the pace needed to reach the USDA’s figure. It is highly unlikely they will make an adjustment that large. As little as 50 million bushel reduction puts carryout over 1 billion bushels for the first time in U.S. history.

A lot of the focus in trade has been on the soybean exports but very little discussion have been on corn exports. To date, corn exports stand at 810 million bushels, 140 million bushels ahead of the pace needed to reach the USDA’s export total. This figure is also a large 503 million bushels ahead of the pace for the same time last year.

For more information, you may contact Mick Hoover at (515)-200-5115, or e-mail at mhoover@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Mick Hoover. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.