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Archive for September, 2017

Market Report
Friday September 29th, 2017
December 17 corn closed up 2 ¾ at $3.55 ¼ and March 18 closed up 2 ½ at $3.67 ¾. November beans closed up 8 ¾ at $9.68 ¼ and January 18 closed up 8 ¼ at $9.78 ½. December wheat closed down 6 ¾ at $4.48 ¼ and July 18 closed down 8 at $4.90 ¾. Crude oil closed down $.02 at $51.85.
Corn Stocks Up 32 Percent from September 2016
Soybean Stocks Up 53 Percent
All Wheat Stocks Down 11 Percent
Corn traded 3 ¼-3 ¾ cents higher today following the release of a friendly quarterly grain stocks report. River terminal corn basis continues its slide lower as the cost of barge freight continues to rise. The quarterly grain stocks report estimated grain stocks as of September 1st to total 2.294 billion bushels. This was slightly lower than the average trade estimate of 2.353 billion bushels and approximately 32% higher than stocks at this time last year.   China has stated that it will not rely on corn imports for its proposed increase in the use of ethanol. The government plans to use its substantial stockpile of corn for the production of ethanol in the short term. China sold 1.61 million tons of reserve corn out of 3.1 million tons offered. The majority of the available tons were from the 2014 crop year.
Soybean futures traded higher by 7-8 ¼ cents after the release of the quarterly grain stocks report indicated a smaller bean stock than expected. River terminal basis is being pressured lower by high barge freight rates while elevators lower basis bids from harvest pressure. U.S. soybean stocks as of September 1st came in at 301.3 million bushels according to today’s quarterly grain stocks report. This was slightly below the average trade estimate of 338 million bushels but still 53% higher than soybean stocks one year ago.  With clear weather ahead for the eastern Corn Belt, harvest should progress very well over the weekend and estimates for Monday’s crop progress report reflect that. Estimates for the percentage of the bean crop harvested are coming around 25%, up 15% from last week.  According to an article posted on Thomsen Reuters, both corn and soybean usage during the summer were the second biggest ever with soy crushers, exporters and end users using up 665 million bushels. Despite this, soybean ending stocks are at a 10-year high which means short-term demand may not be able to catch up without growing issues somewhere in the world.  Argentina is in talks with the U.S. in hopes of banishing import tariffs on biodiesel and instead using a minimum price system.
Chicago wheat traded 6-7 ¼ cents lower, Kansas City traded 10-10 ½ cents lower and Minneapolis trade was 13 ½-19 ½ cents lower. The Minneapolis premium over KC and Chicago is $1.77 ¼-1.81 ½ for December contracts and $1.72-1.77 for March contracts.  According to the quarterly grain stocks report, as of September 1st all wheat stocks are at 2.253 billion bushels which came in above the average trade estimate of 2.205 billion bushels. All wheat production came in at 1.741 billion bushels, above average trade estimates of 1.718 billion bushels.
Other spring wheat production came in at 416 million bushels, above estimates of 382 million bushels. Planted spring wheat acres were up from the August WASDE report, coming in at 11.009 million acres with harvested acres coming in at 10.159 million acres. The average yield estimate came in at 41.0 bushels per acre. Algeria, which is one of the world’s largest grain importers, purchased 480,000 metric tons of wheat in a tender that closed yesterday. Shipment is due in December and origin is optional.
Anna Kaverman
anna@mercerlandmark.com

Market Report

Thursday September 28th, 2017

December 17 corn closed down 1 ½ at $3.52 ½ and March 18 closed down 1 ½ at $3.65 ¼. November beans closed down 6 at $9.59 ½ and January 18 closed down 6 at $9.70 ¼. December wheat closed down 6 ½ at $4.55 and July 18 closed down 5 ¾ at $4.98 ¾. Crude oil closed down $.56 at $51.87.

The corn market sailed to a 1-2 cent lower performance in a day of lazy, pre-report trade. Recent price action has been marked by a lack of clear direction, forming a clear pattern of “higher lows” and “lower highs”. Corn seems to be nearing a “chart decision point” ahead of key Quarterly Stocks data tomorrow.  Managed Money traders were viewed small net sellers today, and they should be heading into report day short about 145,000 corn futures and options.  There are actually two major grain reports due out tomorrow – Quarterly Stocks and the “Small Grains Summary”.  The latter report contains updated production estimates for wheat, so the end-of-Sept is often known as more of a “wheat report” than corn. The Quarterly Stocks data is the only major fundamental point of interest for corn. The average analyst estimate heading in is for corn stocks at 2.346 BB, little changed from the USDA’s Sept WASDE estimate of 2.350 billion and last year at 1.737 billion. The “ability” of the USDA to “find or lose” a few hundred million bushels has often made this report a widow-maker, but the effect tends to dampen in times of relatively high carryout. The weekly export sales report this morning did not thrill the markets; just 320,200 MT of new 17/18 corn sales were booked, roughly half last week’s total. The USDA “made up” for the miss a little,

The soybean market resumed its slide. As harvest has picked up interior bids have moved out to new crop values the exception has been the export markets where bids at the Gulf and the river are firm for nearby. Today’s selling in beans was impressive when you consider the headline demand bomb dropped by the USDA today with weekly export sales coming above 3 mmt and another daily sales announcement of 132 mt to unknown. Most of the business was to China or unknown which for all intents and purposes is mostly China for beans also. Sales were expected to be strong but this was 1 mmt above expectations but was not able to support the board.  This tells you the market focus has turned back to the heavy supply situation and strong yield reports. The quarterly stocks report and small grains reports are tomorrow – not a major report for soybeans where stocks on average are estimated at 338 mb vs. the most recent USDA estimate at 345 mt which compares to last year’s carryout of just 197 mb.

The wheat complex was a little weaker overnight, and they would extend their losses during the day before settling slightly off the lows. Export sales this morning were at the high end of expectations, but make no mistake, most of the news around this morning was NOT friendly to wheat. The IGC raised its forecast for the 2017/18 world wheat crop, Russia’s wheat crop and exports continue to rise and Kazak’s exports look like they are going to rise year over year as well. After a session on Wednesday that saw SRW wheat prices move to its highest point since mid-August, today’s more than $.06 losses puts back at least some doubt in the minds of traders as to what kind of adjustments are we actually going to see from the USDA Friday morning. After a couple weeks of mediocre sales, this morning sales came in a little better than expectations at 436 MT. Crop Report Friday morning. There will be a lot of data in this report for the wheat complex. Depending on how big or small the stocks number comes in at will be determined on what adjustments the USDA makes from the past few reports. In last year’s report, Sept 1 wheat stocks came in 125 mil larger than anticipated at 2.527 BB. It was the largest since 1987 when the Gov’t held the stocks. By March, stocks had been reduced to 1.655 BB and by June they had been reduced to 1.180 BB. Expectations for Friday are for stocks to come in around 2.205 BB.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Wednesday September 27th, 2017

December 17 corn closed up 1 ¾ at $3.54 and March 18 closed up 1 ½ at $3.66 ¾. November beans closed up 2 at $9.65 ½ and January 18 closed up 2 ¼ at $9.76 ¼. December wheat closed up 7 ¾ at $4.61 ½ and July 18 closed up 6 at $5.04 ½. Crude oil closed up $.24 at $52.43.

Choppy trade continued in the corn market, this time working out in favor of the bull. Futures finished Wednesday 1-2 cents higher, and perhaps more encouraging, bounced a full $.06 off the lows of the session after briefly stabbing below $3.50.  The funds were seen net buyers of 6,000 corn today, likely as they trim back exposure ahead of Friday’s Quarterly Stocks report.  They are still short an estimated 141,000 corn futures and options. The recent Midwest “heat wave” is sending farmers scrambling up into their combines, excluding rained-out areas in the West. The NW Corn Belt could stay a little too wet for some time. Unfortunately for traders hungry for corn yield reports, the preference now is mostly for soy harvest, while corn is left to dry out in the field. Biofuels have been a focus of the markets this week, as the new EPA leadership has signaled it is re-examining RFS mandate volumes and protocols. Yesterday, biodiesel (and by extension, soy oil) was in the hot seat and today, it was corn ethanol’s turn. News wire service reports, citing “people briefed on discussions”, suggested the EPA was evaluating the current way RIN credits generated from exported ethanol gallons were treated. As it stands, such credits are “retired” when the ethanol is exported, effectively taking those RIN’s “out of service” and reducing the total amount of D6 RIN credits available to the marketplace.  This makes sense to us, as these gallons were not blended domestically.

The soybean market reversed from lower to higher ending a two-session losing streak after establishing a recovery high on Friday. Beans have developed a more balanced two-sided trade with strong export demand helping to offset the robust global supply and large US production. The quarterly stocks report and small grains reports are this Friday. This is not a major report for soybeans where stocks on average are estimated at 338 mb vs. the most recent USDA estimate at 345 mt which compares to last year’s carryout of just 197 mb. Early on the market was under harvest pressure which has been pronounced this week and noted in the weakening interior basis. A strong rally in the dollar didn’t help matters either with the currency supported by yesterday’s Fed commentary adding confidence of a Q4 rate increase as well as today’s tax reform unveiling.  This was not enough to keep the pressure on though as all of the grains floated back for upside reversals. After two quiet days of export announcements the USDA returned with a flash sale of 132 tmt of beans to China.

After a one day reprieve, Mpls was back trading stronger than Chicago and KC overnight, however that trend would not continue during the day. Chicago took over the leadership role as this is where the huge short resides. Today’s short covering rally in the SRW wheat contract pushed futures to its highest point since mid-August. One of the bigger uncertainties in the upcoming report Friday is the size of the Spring wheat crop, and many of the private estimates are expecting the USDA to give us a decent size reduction as the crop is now in the bin. But that is only one of many twists and turns the USDA could give us Friday. It goes without saying that it is a big report for wheat. Export lineup remains pretty quiet. The Russian wheat crop is coming in nicely, and with the frequency of Egypt around for wheat, it has led to a rebound in World wheat prices. Australia is still having some problems. The US Dollar has been on a strong run, but the wheat complex has completely dis-associated itself with the relationship it has with that market. There is a huge crop report on Friday, so that may not matter anyways as the data from the report will be the influential factor going forward.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Tuesday September 26th, 2017

December 17 corn closed down 1 ½ at $3.52 ¼ and March 18 closed down 1 ¼ at $3.65 ¼. November beans closed down 7 ¾ at $9.63 ½ and January 18 closed down 7 ¾ at $9.74. December wheat closed down ¼ at $4.53 ¾ and July 18 closed up 1 at $4.98 ½. Crude oil closed down $.33 at $52.19.

Another “mixed feature” performance in the corn market, though this time, futures closed a penny lower. Volumes picked up a little, despite continued sluggish and indecisive price action.  The funds were net sellers today, which could take their position in the market back up to around 150,000 net short, including options. Weather has no doubt lent a bearish tone to the row crops to start the week. Weather in the Eastern half of the US Midwest has been quite conducive to crop maturation, which should help expand harvest efforts quite quickly. After a wet week, the Western Belt is expected to see improving weather.  There will be some rain, but likely intermittent enough for farmers to make a few brave stabs at harvest. Brazil was hot and dry to start the week, but thunderstorms are expected to increase northward and out of southern Brazil during the next couple days before a more significant increase in rain occurs Thursday through Tuesday of next week.

The soybean market resumed its slide for a second day as harvest pressure turns back the recent recovery rally. In addition, a lack of fresh export news this week has been a factor where recent and almost daily sales announcements have been a key to sustaining the rally. This week, China is away from the market celebrating their National Holiday so at least some of our recent size purchase announcements were likely front-loaded purchases and the balance of this week has the potential to remain quiet on that front. Basis levels have reflected both the expanding harvest and the absence of China as interior bids widened out to new crop values and export bids at the Gulf saw their recent inverse melt away. The EPA released an announcement mid-day that they are looking at reducing the biodiesel mandates for 2018 and beyond.  Specifically, it appears they are challenging the current precedent of including imports in calculating domestic supplies which would be up for the courts to decide. Even though this change is not a done deal the soybean oil market reacted very negatively going from higher to sharply lower.

Both the HRW and SRW wheat contracts tried to make a good trade again today, briefly trading above the $4.60 level before reversing and settling slightly lower across the board. Even though both markets traded into new highs for this recent move, it might be difficult for them to make the next trade in front of Friday’s crop report. World wheat prices have risen over the past few weeks, but futures prices are back to being $1.00 over corn which has shut down any feeding. That makes it difficult to see any extended rallies unless there are some changes in Friday morning’s report. Chicago and KC finished the day a little better than Mpls, which is a change from what we have seen over the past several days when Spring wheat prices have been much strong than HRW or SRW. The recent run has taken futures in Mpls to almost two dollars over both Chicago and KC, with lower production estimates for this Friday’s crop report behind some of this recent strength. That being said, it’s not like traders have not been down this road before, with traders taking on a similar bias the past few reports only to get burned by the USDA. Crop report thoughts are below.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Monday September 25th, 2017

December 17 corn closed up ¼ at $3.53 ¾ and March 18 closed up ½ at $3.66 ½. November beans closed down 13 at $9.71 ¼ and January 18 closed down 12 ¾ at $9.81 3/4. December wheat closed up 4 ½ at $4.54 and July 18 closed 3 ¼ at $4.97 ½. Crude oil closed up $1.49 at $52.52.

The corn market found itself caught between sinking beans and buoyant wheat today, ultimately finishing the day fractionally better. Corn opened lower Sunday night, but found more mixed feature during the day, spending considerable time on both halves. Futures struggled to either rally or break, which no doubt earned the ire of many traders. Funds were estimated small net buyers today, perhaps as they cover a few shorts ahead of Friday’s Quarterly Stocks reports. It is estimated they are heading into tonight short just under 144,000 corn futures and options. USDA Crop Progress data after the close continued to disappoint traders expecting a big jump in harvest progress.  According to the gov’t, just 11% of US corn was harvested, advancing only 4% wk/wk, and compares to 14% complete last year and 17% average. Only TX and NC are on a normal trajectory in any meaningful fashion; all other states are running behind or are under 5% complete. 51% of the crop was deemed “mature”, 13% behind average, while 93% of the crop has dented.  Corn conditions were little changed yet again at 61% Good-Excellent vs. 74% last year.

The soybean market failed to sustain Friday’s breakout trade into new recovery highs and gave back most of those gains in a reversal. The reversal comes at a key point technically on the chart where this recent rally came all the way back to erase the August surprise bear crop report reversal trade and in the process completed a second upside objective (within $.03 is close enough). The chart is overbought and due for a correction.  You still have an open count topside projecting to $10.23 if you can resume the rally and hold new highs from here. Then again, you still have an open count to the downside around $9.00. The chart likely develops more of a range trade moving forward where we are just defining the upper end while the lower end has already been established.  Fundamentally, harvest sell pressure is here with the theme coming out of the weekend being stronger than expected yields continue off the combine despite the dry finish to the growing season. It is possible we have a quiet week, relative to what we have seen, in export news. Some chatter around about China cancelling a cargo of US beans and 2 Brazilian although it was noted this was due to a freight advantage and not lack of demand. If you need another red flag for the rally, rains are set to return to Brazil with forecasts rains expanding from the south in the center of the country next week to help alleviate concerns of dryness and get planting underway – rains are expected to increase into the middle of the month. It is estimated that less than 1% of Brazil’s beans have been planted compared to 2.4% avg. for this date.

Wheat saw a lower start to the overnight during the early going. All three markets would battle back and finish a couple cents off their lows, and that would be an omen of things to come during the day. Once again Mpls led the way, racing out to double digit gains and holding them throughout the session. The Spring wheat contract might be reacting to lower production estimates surfacing, but we are now more than 30 cents off last week’s lows. Traders have taken on a similar bias the past few reports, only to get burned by the USDA. Both Chicago and KC are trying to make good again, and even though both markets settled at a new high for this recent move, both have struggled last week with the $4.50 level. The question going forward is can these markets make the next trade? There has not been a lot of farmer selling, but Russia continues to take away traditional French markets. There is a lot of talk about Russia export capacity maxed out but they continue to add to its wheat program with three cargoes to Egypt last week. Unless the USDA makes some changes this Friday, how much more of a rally can we see?

Anna Kaverman

anna@mercerlandmark.com

Market Report

Thursday September 21st, 2017

December 17 corn closed up ¼ at $3.50 ¼ and March 18 closed up ½ at $3.63. November beans closed up ¾ at $9.70 ¾ and January 18 closed up ½ at $9.81. December wheat closed up 2 ¾ at $4.52 ½ and July 18 closed up 1 ¾ at $4.96 ¼. Crude oil closed down $.11 at $50.93.

The grain markets seemed to be on a mission to put everyone to sleep today.  Mission accomplished. Corn finished fractionally better in a quiet, three cent intraday range. Managed Money traders did not appear to be actively involved with the proceedings, so we believe they are still short 150,000 corn futures and options. Export sales today did not generate much excitement, posting disappointing numbers after two solid 1+ mmt weeks. Net sales of 526,900 MT were booked for the now-current 2017/2018 marketing year. All of the business was to Japan or Latin America (Mexico single largest buyer). This week’s sales total was just over one-half of last week’s. The U.S. Dollar retraced some of yesterday’s gains, but still appears to be trying to carve out a short-term bottom. Unseasonably warm temperatures continued in a large part of the Midwest, while rain fell in eastern Iowa and central, southern, and eastern Wisconsin. Heavy rain and some flooding is expected in portions of the northwestern Corn Belt Friday through Sunday with additional rain occurring Monday into Tuesday before more than a week of drier weather begins next Wednesday. Technically, we continue to hug the $3.50 line closely. Above, we have tough resistance in the $3.60-$3.65 neighborhood. The next layer of support is just below us at $3.45 – the recent post-report low – and ten cents below that.

The soybean market shrugged off overnight sell pressure to float back and reversed slightly higher on the day. The price action has been choppy and two sided all week as demand continues to underpin prices while supply side realities limit upside enthusiasm. Beans will be looking to print their 6th consecutive higher weekly close with a settlement of $9.69 SX or better. In the weekly export sales report, soybean sales of 2.338 mmt came in well above trade expectations for 1.0 to 1.5 mmt. The featured buyer was – you guessed it – China with 1.403 mmt including 329 mt switched from previously announced unknown sales, unknown bot 529 mt, and Mexico 213 mt. Current sales commitments to date stand at 17.235 mmt compared to 22.402 mmt this time last year.

The wheat complex ended the day slightly higher across the board as trade (especially in Chicago) continues to reap the proceeds of the reversal type action from Tuesday’s trade. Both Chicago and KC have been battling the $4.50 level, and finally Chicago has been able to conquer that level. KC has yet to accompany Chicago in that feat, so there still has to be some caution, but the more we test and push through the upside support, the better the chance trade has at chasing out the weak short and extending the rally. The COT report Friday afternoon should show funds short around 100K contracts. Export sales this morning were in line with expectations, coming in at 307 MT. The Philippines, Mexico and Kenya were the three largest buyers. There was no China or Algerian business, with much of the trade routine. Nigeria cancelled 27 MT.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Wednesday September 20th, 2017

December 17 corn closed up 1 ¾ at $3.50 and March 18 closed up 1 ¾ at $3.62 ½. November beans closed up 4 ½ at $9.70 and January 18 closed up 4 ½ at $9.80 ½. December wheat closed up 6 ¾ at $4.49 ¾ and July 18 closed up 5 ¼ at $4.94 ½. Crude oil closed up $.80 at $51.04.

Believe it or not, the corn market was able to put a little “green” on the board for once, finishing the day with slight gains. Volumes remain light and enthusiasm quite lacking.  The funds were viewed as net buyers of about 5,000 contracts today, which would pare their net short in corn back to roughly 150,000 futures and options. Though it didn’t occur until after the markets closed, the most significant thing to occur in an otherwise quiet news day was the sharp upside reversal in the US Dollar. Values were trading almost 1% higher late. Recent positive technical action could offer the index some measure of stability. The Fed left interest rates unchanged today, but believes there will be one more interest rate hike in 2017, three in 2018, two in 2019, and one in 2020. The impact on grains is debatable. It certainly did not support corn values on the way down. But a bounce in the US Dollar will not help US corn compete against foreign sellers, which has been an on-going struggle for many moons.

The soybean market reversed higher today, building on yesterday’s small victory. Beans were treated to a size flash sales announcement of 960 mt old crop and 120 mt new crop beans sold to unknown (China), in addition 132 mt old crop to China as they continue to get Q4 coverage in place. Demand from exports and crush remain a positive input for beans to offset the large supply story and provides a somewhat balanced trade for now.  Absent a supply side threat, upside potential should be limited from these levels. Weather is a non-factor at this point where the central to eastern belt will continue to enjoy Indian Summer-like warmth while below normal temps will creep into the west starting next week and into the end of September but no threats of a frost at this point. There will be moisture around for the western belt during this period so some fits and starts with harvest can accompany this. The southern hemisphere weather is getting more attention this past week due to dryness in Brazil but it is important to remember that this is still September and that dryness is somewhat normal, there is some rain in the forecasts and more season October rains are expected as the main planting season gets underway. The dryness will be monitored but not seen as a market mover at this timing.

The wheat complex continued its recovery from late yesterday, with both Chicago and KC making another run. It was the highest daily close since Aug 15 for December Chicago, but because KC did not close as strong, it does add a reason for some skepticism. Five of the past six days Chicago has tested the $4.50 area and there eventually comes a point in time where it is either going to make a run, or it is not. The reversal Tuesday and subsequent solid close today was a strong positive, but a firm US Dollar (post grain close) may curb some of that enthusiasm.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Tuesday September 19th, 2017

December 17 corn closed down 3 ¼ at $3.48 ¼ and March 18 closed down 3 ¼ at $3.60 ¾. November beans closed down 2 ¼ at $9.65 ½ and January 18 closed down 2 at $9.76. December wheat closed down ½ at $4.43 and July 18 closed up 1 at $4.89 ¼. Crude oil closed down $.45 at $49.90.

The corn market put in a “Monday-Tuesday” lower, finishing out the day as a three cent loser. End-user buying was again noted on the weakness, but it sure did nothing to prop up $3.50 support today. The funds were viewed net sellers of another 8,000 futures today, which would take their net short in corn to over 150,000 combined futures and options. There was not a great deal of fresh news around Tuesday. Traders are primarily picking through the limited harvest data available at this juncture.  Given that last night’s USDA report found national harvest progress at just 7%, only 2% higher wk/wk, there are still not a great deal of reports available. This implies over 1 BB of feedstuffs have been harvested to date. A wet start to the current week could further impede progress in the short-run, though a warmer end to the growing year should give crops a nice finishing push thereafter. Early reports have generally been better-than-expected, but it is still far too early to establish a defining trend. Elsewhere, on the world scene, China is gearing up for its own harvest amid excellent finishing weather.  Meteorologists are on “rain watch” in Brazil, while Argentine conditions even out. South American crop scout Cordonnier issued new crop estimates for Brazil and Argentine corn, pegging the former down 10% to 88 mmt, and Argy up 2.4% to 42 mmt.

The soybean market extended its break from the recent recovery highs today, trading $.09 lower at one point but the market couldn’t keep the pressure on and we floated back to moderate the day’s losses. Today’s negativity can be attributed to good late season weather with warmth and the return of rains (for crops that have not turned) and an absence of fresh export business which has become a regular and almost daily occurrence at 8 am of late. The choppy indecisive price action is indicative of a market that has a healthy balance of supply and demand forces now and is looking for something new to drive prices or develop a new trend. Brazil is dry and that is getting more attention and certainly worth monitoring in an otherwise quiet news cycle but it is not something to be overly concerned about in September where only the earliest of soybean planting takes place in the second half of the month. Seasonal rains are forecast to pick up in late September and in October – most of the planting for beans is done in Oct/Nov.

Trade across the wheat complex was a little better overnight, but gains were unable to hold during the day. News this morning on paper looked friendly, with Egypt in for wheat and Stats Can coming out with re-vised data, but an in-depth look was anything but. The GASC tender overnight produced around ten offers, of which the seven lowest were all Russian. So when prices reversed lower shortly after the day session started, it was not much of a surprise. Trade was on the defensive for much of the day, with Chicago, KC and Mpls each falling to more than seven cents lower. Chicago and KC prices gradually firmed over the latter half of the session with both markets trading higher in the modified.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Thursday September 14th, 2017

December 17 corn closed up 2 ¾ at $3.54 ¼ and March 18 closed up 2 ¾ at $3.66 ½. November beans closed up 15 ½ at $9.76 and January 18 closed up 15 ¼ at $9.86. December wheat closed down ¼ at $4.43 and July 18 closed down ½ at $4.88 ¼. Crude oil closed up $.60 at $50.35.

The corn market performed a little better today, managing to hold onto modest intraday gains to close higher. The funds were small net buyers today, which would likely pare their net short in corn back to just under 150,000 combined futures and options. The markets are eagerly awaiting yield reports from the field, which will likely be somewhat slow to materialize for at least another week. Indeed, a wetter pattern over the Midwest may delay things a bit more. At least it will be nice and warm, likely putting any frost worries to bed for now. The next weather story may end up being South America, but it is far too early in their planting cycle to raise any serious red flags.  Brazil is too dry (and will remain so for at least one week), while Argentina was trending too wet (though some improvement is expected in the short-run). The USDA delivered a second strong week of export sales in corn, though this was telegraphed ahead of time given the announced Mexican business of the past couple weeks. New 17/18 sales of 1.047 MMT were reported, half to Mexico, with the balance booked to other traditional customers (Colombia, Japan, Korea). The new sales takes total sales + shipped for the new marketing year to 10.5 mmt, which compares to just over 17.0 on the books this time last year for 16/17.

The soybean market extended its rally with sharp gains today that gave us a new recovery high close. November erased the Sept. USDA report flush and is now taking aim at the recent highs extending to $9.77. If exceeded, it would project a run to the second count to $9.90 which would erase the Aug report day flush. A third count shows at $10.23 but expect the break out rally to end up disappointing at the end of the day with domestic and global supplies limiting our upside potential in the absence a production threat. The rally is supported by export demand and a market that has some nervous shorts although not excessively so from a fund position perspective. The soybean sales featured China with 1.211 mmt which includes 399 tmt switched from previously announced sales to unknown as well a 198 mt late reported sale from last week. USDA flashed a new daily sale of 198 mt to China in addition. Soybean demand is one of the few bright spots in grains.

The wheat complex finished the night higher. When the day session started, similar to Wednesday, the markets would extend those gains. Thanks to a strong soy complex and a firm corn market, prices across the wheat complex were able to rally above Wednesday’s highs, but also in similar action to yesterday’s trade, the markets were unable to hold those early gains. Export sales this morning were ho-hum, and there really is not a lot of other fresh news around. Seasonally, a post-harvest bounce is not uncommon, but the question going forward is how much of a bounce can we actually see, especially with some countries seeing record or near record crops. Strength in wheat this week may also be coming from basis gains as mills and exporters have to buy inventories from elevators that have locked in huge $1.00 plus carries.

Anna Kaverman

anna@mercerlandmark.com

By~ Ben Stoller

Photo courtesy of Monsanto agKnowledge Newsletter, Issue 1704

Now is the time to be scouting corn fields for potential lodging due to stalk rots.

Scouting can be simple and quick:

  1. Check 10 plants in several locations within a field
  2. Pinch or squeeze the stalks at one of the lowest nodes above the brace roots.  Healthy stalks are firm and unable to be compressed.
  3. Push the stalks over at an approximate 45° angle; if the stalks return to the upright position, stalk integrity is maintained.  If the stalk breaks or remains tilted, a stalk rot of some sort is likely.

If more than 10% of the stalks are compromised, strongly consider harvesting early to avoid a potentially slow, arduous and frustrating harvesting experience.

More detailed information is available at the following links:

http://www.aganytime.com/corn/pages/article.aspx?name=Diplodia-Stalk-and-Ear-Rot-in-Corn&fields=article&article=978

http://www.aganytime.com/pages/article.aspx?name=Identification%20and%20Management%20of%20Stalk%20and%20Ear%20Rots&fields=article&article=2292