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Midwest Marketing Solutions

By Brian Hoops - Columnist | Jan 5, 2021

COVID-19 relief package

The latest COVID-19 relief package provides $284.5 billion to reopen and strengthen the Paycheck Protection Program for first time and second time borrowers. PPP loans are reserved for businesses with fewer than 300 employees that sustained a 25 percent loss in revenue. Maximum loan amounts will be limited to $2 million. There’s also a specific farmer and ranchers calculation included in the PPP.

Corn analysis

Corn closed the week $.35 1/4 higher. Last week, private exporters announced an export sale of 149,572 mts to an unknown destination.

In the weekly export inspections report; U.S. corn inspections totaled 39 mb for the week ending Thursday, Dec. 24, 2020. Total inspections in 2020-21 are now at 541 mb, up 71% from the previous year. Corn inspections will need to average approximately 55.5 mb each week to reach the USDA forecast.

In the weekly EIA report; weekly ethanol production declined to 934,000 bpd versus 976,000 bpd last week, which is a 10 week low. Ethanol stocks rose to 23.5 mb versus 23.2 mb last week. This was the 9th consecutive week of a rise and are record high on a same week basis.

Strategy and outlook

As we enter into the key growing period of South American production, producers should maintain their re-ownership of sold inventory with futures and options. As values approach key overhead resistance, producers should consider accepting profits on long positions and beginning to hedge 2021 production.

Soybean analysis

Soybeans closed the week $.45 1/4 higher. Last week, private exporters announced sales of 358,700 mts of soybeans to an unknown destination and 33,000 mts of bean oil to an unknown destination.

In the weekly export inspections report; U.S. Soybean inspections totaled 53.2 mb for the week ending Thursday, Dec. 24, 2020. Total inspections in 2020-21 are now at 1.340 bb, up 76% from the previous year. Soybean inspections will need to average approximately 22.1 mb each week to reach the USDA forecast.

Strategy and outlook

Producers should have sold soybeans off the combine and should have re-owned production using futures and options in deferred contracts. As values approach key overhead resistance, producers should consider accepting profits on long positions and beginning to hedge 2021 production.

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.

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