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Archive for October, 2017

Market Report

Thursday October 19th, 2017

December 17 corn closed up ½ at $3.49 and March 18 closed up ½ at $3.62 ¾. November beans closed up 2 ¼ at $9.86 ½ and January 18 closed up 2 at $9.97. December wheat closed up 2 ¾ at $4.32 ¾ and July 18 closed up 1 ¼ at $4.78 ¼. Crude oil closed down $.71 at $51.55.

Well, at least it didn’t finish lower. Corn actually had a pulse early, trading as much as $.03 higher. The market maintained slight gains for most of the session, but found a little selling into the close, which pared the day’s gains back to fractional levels. Funds likely covered a few shorts taking their overall net position back to 185,000 short futures and options. The early strength in corn was labelled the “Trump Bump”, as news agencies penned stories suggesting the President himself directly intervened to dissuade the EPA from “messing with the RFS”. Rumors had been circulating for the past month that the EPA was looking to ease the compliance burden of refiners in one way or another – either by allowing exported ethanol gallons to count, or by outright reducing biodiesel (and advanced biofuel) mandated volumes. This prompted a political backlash by Midwest Senators, who have been aggressively lobbying against such changes. Though there was no official statement from the White House or the EPA, the stories were enough to rally corn and bean oil, as well as biofuel RIN credits. Ethanol did not respond. In fact, that market actually closed the day 1-2 cents lower. Weekly export sales for corn were as good as advertised, finding 1.255 mmt in new business, which topped the year ago week’s sales for a second time. Mexico was the major buyer of record, taking almost half, while Japan and other Latin destinations filled out the remainder.

The soybean market reversed higher with leadership from the soybean oil market helping to bounce of its initial chart support. Weekly export sales for beans were strong at 1.275 mmt and we backed that up with another daily sales announcement of 384 mt of beans sold to China providing plenty of demand side news. All things considered, a 2-cent rally is not particularly impressive which is reflective of the supply side realities that should continue to create headwinds on strength days. The RFS mandates on biodiesel are intrinsically tied to soybean oil consumption and maintaining current policy would imply increasing our domestic soybean oil usage in biofuels. Last month, we saw the bean oil market sell off sharply from roughly $.36 down as funds liquidated their oversized long position as speculation over whether or when these changes might take place finally led to a rush for the exits. Elsewhere in the news, Informa came out with updated new crop acreage number today where they increased their soybean acres from last month by 1.25 million to 90.347 million.

Spring wheat once again was the leader of the complex. Mpls would finish the day more than a $.05 higher, while Chicago and KC ended the session only a couple cents higher. The theme over the past days has been Mpls stronger than the HRW and SRW wheat markets, and this morning we may have found the reason why as China showed up on the sales report buying two cargoes of HRS. Two weeks ago China popped up on the sales report buying one cargo of HRS. When you combine the Egyptian tender to the strong sales report, the market was given yet another opportunity to rebound and maybe finish the week strong. It was a modest start today, but it was not very convincing.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Wednesday October 18th, 2017

December 17 corn closed down 1 ½ at $3.48 ½ and March 18 closed down 1 ½ at $3.62 ¼. November beans closed down ½ at $9.84 ¼ and January 18 closed down ¼ at $9.95. December wheat closed down 4 ¾ at $4.30 and July 18 closed down 4 at $4.77. Crude oil closed up $.15 at $52.26.

The corn market kept them all snoozing today, down ticking in a two-plus cent range and light volume. Any vigor produced by last week’s positive price reversals appears to be collapsing in a heap of seething disinterest. Fund traders were content to pile on, adding an estimated 8,000 shorts today to take their position back up close to 190,000 short futures and options.  The ethanol section of the weekly EIA report continued the recent trend toward more volatility. Production jumped over 5% this week to 1.019 mil bbl/day, which more than made up for last week’s equally-shocking 4% decline. Roughly 10-15% of plants are breaking even or maybe even losing a little money in the current crush environment. Midwest Senators came away with “warm fuzzy feelings” from their lunch meeting with EPA chief Pruitt Tuesday, but secured precious few concrete promises to shore up RFS support. Support from such Senators is crucial for Trump’s agenda, which gives them a little extra clout in the matter than would ordinarily be expected?  After-hours, wire service reports suggested Trump ordered a “halt” to potential reductions in RFS volumes (thought to be mostly aimed at biodiesel).

The soybean market closed a shade weaker in a quiet, two-sided trade giving us three days in a row of weakness since settling at a recovery high of $10.03 November on Friday. Trade volume on was only 90,000 which is especially light when compared to Thursday’s USDA report day surge of 294,000 followed by 225k the following day. There were no fresh export sales announcements today. Tomorrow we’ll get the USDA weekly export sales report where we are looking for corn and beans sales of 1.0 to 1.2 mmt. Brazilian weather forecasts are suggesting an improvement in conditions for the center to northern growing regions for the back end of October with the improving trend carrying into November – as rains start to break through and temps back off.  This moisture is badly needed and will allow planting and replanting to accelerate. Elsewhere in the news, rumors about the potential for EPA changes to the Renewable Fuels Standard heated up again today with an RFS press conference in IA and a Bloomberg report that the Administration told the EPA to halt any changes to the current mandates. There is a Nov 30 deadline to set the final biofuel quotas for 2018 so some regulatory guidance is very much needed.

Both Chicago and KC wheat were under a little bit of pressure throughout much of the night and that trend continued during the day. Mpls was once again a little stronger and managed to settle the day only around a penny lower. Today’s defensive price action follows two consecutive session’s that saw both Chicago and KC wheat unable to hold early morning gains, so it cannot be too much of a surprise to anyone. Although news has been limited this week, there have been a few headlines that tried to stimulate some buying. Now we have another one with the GASC in for third consecutive week. Their tenders over the past few weeks have seemed to give the market at least a little bit of a spark, however they have been short-lived – something that trade seems to be getting use to as recent efforts to rally have been met with frustration.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Tuesday October 17th, 2017

December 17 corn closed down ½ at $3.50 and March 18 closed down ½ at $3.63 ¾. November beans closed down 6 ¼ at $9.84 ¾ and January 18 closed down 6 ¼ at $9.95 ¼. December wheat closed down 1 ¾ at $4.34 ¾ and July 18 closed down ½ at $4.81. Crude oil closed down $.03 at $52.11.

The corn market didn’t quite complete a “Turnaround”, but did fight off the bears. In the end, futures would close fractionally lower up-front in another relatively subdued day of “action”. The funds were not much involved in today’s trade, and were estimated still net short 175,000 futures and options tonight. Weather influences have been trending a touch bearish to start this week. After some growing areas of Brazil suffered through near-historic early season dryness, forecasters have been building in greater odds of improved weather into November timings. Given some of the extremes seen over the past two weeks, it remains to be seen if some of the early acres will need to be replanted. Such timings are important for the second crop corn in particular, which goes in behind soy once it is harvested. There was some good news on the export front today. USDA reported not one, but two, daily announced sales (115k to Mexico, 146k to Unknown). South Korea picked up a batch of assorted feedstuffs, including 69,000 MT of optional origin corn.

The soybean market continued lower leaving a close for a second consecutive session as we retreat from what appears to be a recovery high with Friday’s settlement above $10. The rally in beans found renewed farm selling that slowed the momentum of what we view primarily as a technically inspired move as the post USDA report buying ran stops but the report itself failed provide any statistical support to sustain those gains. The US farmer wasn’t the only producer to get a nice marketing opportunity as beans priced in Brazilian reals also surged allowing the Brazilian farmer to extend sales as well. Elsewhere in the news, South American crop scout Cordonnier described the start to the Brazil growing season as “problematic” – noting a dry central Brazil and wet southern Brazil, but has stopped short of changing his estimates at 109 MMT of soybean production. He said the crop is still in early stages and noted the blocking weather pattern is expected to break down in some weather models. He characterized the start of the Argentina soybean growing season as average and slowly improving, leaving his soybean production estimate at 55 MMT.

Once again, both Chicago and KC wheat were unable to hold early morning gains and finished the day slightly lower. Mpls was the strongest of the complex finishing slightly higher, following a session on Monday that saw trade the weakest of the complex. On Monday the wheat complex was hoping a few bits of new business would be enough to see some follow through buying after Friday’s gains, but was unable to do so. From the condition reports Monday night we saw most HRW wheat states (except Texas) having planting delays. You could put any spin you want on the reason behind that from weather concerns to the farmers pocketbook. Probably was not enough to produce any buying. After all, soft wheat states are actually ahead of normal. However, the efforts to rally the past few days have been met with frustration. So, now the complex is left with looking for something else to stimulate the buying/support. Recent rallies in Chicago have really struggled between $4.45 and $4.50, so until fresh news surfaces how much of a bounce can we expect to see anyways.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Monday October 16th, 2017

December 17 corn closed down 2 ¼ at $3.50 ½ and March 18 closed down 2 ¼ at $3.64 ¼. November beans closed down 9 ¼ at $9.91 and January 18 closed down 8 ¾ at $10.01 ½. December wheat closed down 3 at $4.36 ½ and July 18 closed down 2 ¾ at $4.81 ½. Crude oil closed up $.41 at $52.14.

The corn market started the week in subdued fashion, down ticking $.02 in relatively light volume trade. The markets started lower Sunday night and pretty much stayed that way all day long. The funds were viewed small net sellers today of about 5,000 corn, which would take their net short back up to an estimated 175,000 futures and options. The weekend was a wet one for a handful of states – Iowa, Illinois, Missouri and Michigan.  Thankfully, there is very little precip in sight over the next five days, which should open up harvest for all but the most saturated areas. After the close, the USDA confirmed a continued sluggish harvest pace to date. Just 28% of the US crop was believed harvested by the USDA into the weekend, advancing only 6% wk/wk, and very nearly half the pace seen this time last year. The report implies 22 million corn acres have been harvested to date. Corn conditions improved one more notch (+1%) to 65% Good-Excellent vs. 74% last year. At this point with combines rolling, condition reports don’t hold much weight with many. On the world scene, the focus remains mostly on Brazil’s planting pace. Hot/dry remains the theme in many locations, hampering efforts to expand plantings, particularly in key province Mato Grosso.

The soybean market turned lower to start the week, unable to sustain last week’s rally back above $10 November which saw producers reward the rally with fresh sales in both old and new crop. Today the market had some positive demand news with a flash sale of 227 mt beans to unknown as well as a strong weekly inspections number and while demand has been able to help cushion the breaks in beans it is not enough to sustain strength in an oversupplied market. The breakout trade in beans opens up the potential to go after our third count at $10.23 November but first you have to contend with $10.00 resistance and that is proving to be a significant challenge at this point. Weekly export inspections in beans came in at 1.770 mmt compared to estimates for 1.250 mmt which is up from 1.490 mmt last week and compares to 2.564 mmt this week last year.  Year to date shipments stand at 7.234 mmt compared to 7.828 mmt this time last year. Weather forecasts for Brazil offer some opportunities for rain a week to 10 days out for the northern growing region and temps are expected to moderate.

The wheat complex saw slightly better price action overnight as trade was looking to build upon Friday’s gains. The rally lasted all of twenty minutes. A $.05 break pushed futures lower and the markets never recovered. Both Chicago and KC bounced between $.01- $.04 lower throughout the day before settling around $.03 lower, while Mpls was a little weaker. For the long term, there was nothing in the crop report last Thursday that was very friendly to wheat, but traders seemed to be leaning a little too heavily on a bearish report. That, combined with an influx of tenders with the lower prices helped give the complex a little spark post-report. The follow through today was not very lasting, but given the fact that recent rallies have really struggled between $4.45 and $4.50 area, how much of a bounce can the market expect to see unless other news surfaces? Egypt was in after the close the past two Monday’s, they were NOT back in today. Crop progress Monday afternoon showed winter wheat planting moving up 12% and is now 60% complete vs 70% this time last year and 71% normal. Winter wheat emerged is seen at 37% vs 25% last week, 45% this time last year and 43% normal. So progress continues to lag everywhere.

Anna Kaverman

anna@mercerlandmark.com

By~ Alex Fullenkamp

Many growers are considering fall spraying this year more than ever.  Marestail and waterhemp were more of an issue than ever this year.  Chickweed and henbit were also a big problem for some early this past spring.

Fall spraying with a mixture of 2-4D, Dicamba, and Sencor is a great way to help control these weeds.  Glyphosate can also be in the tank if needed.  We have great flexibility with the timing of these applications too.  Some growers have expressed concerns of getting applications made prior to a frost.  This is not a concern and applications can be made into November with excellent results next spring.

Besides the obvious benefit of weed control, there are other benefits too.  Soils will generally be warmer and drier next spring where there is not weeds.   Limiting heavy weed cover can also reduce some insect pressure such as soybean cyst nematode and black cutworm.

Many growers are utilizing the Xtend platform for weed control and it performed very well this year.  The great results have made some growers question the importance of fall spraying and spring residuals.   I would strongly encourage growers to continue to use these tools and have the Xtend tool as an option if needed in crop.

Contact your local Mercer Landmark agronomy person for more information.

Market Report

Thursday October 12th, 2017

December 17 corn closed up 3 at $3.49 and March 18 closed up 3 ¼ at $3.62 ¾. November beans closed up 26 ¾ at $9.92 and January 18 closed up 26 ½ at $10.02 ½. December wheat closed down 2 ¾ at $4.30 ½ and July 18 closed down 3 ¼ at $4.75 ¼.

Corn traded unchanged to 2¾-3½ cents higher today, bouncing from contract lows in the December contract month following the release of the WASDE report. Most of the strength in corn can be attributed to the rally in the soybean market.

Soybean futures traded 27¼-27¾ cents higher today rallying from a lower bean yield number in today’s WASDE report. The rally in beans sparked a large amount of cash bean selling from producers today.

The wheat markets traded lower today following the release of the somewhat bearish (but expected) WASDE numbers that confirmed large domestic and world wheat stocks.

October 2017 USDA Crop Production, World Supply/Demand Report Headline Recap

US Production

**USDA October US 2017 Corn Production: 14.280 mln bu.; expected 14.2 mln bushels; prev rpt 14.184

**USDA October US 2017 Corn Yields: 171.8 bpa; expected 170.0 bpa; prev rpt 169.9

**USDA October US 2017 Soybean Production: 4.431 mln bu.; expected 4.45 mln bushels; prev rpt 4.431

**USDA October US 2017 Soybean Yields: 49.5 bpa; expected 50.0 bpa; prev rpt 49.9

**USDA October US 2017 Corn Used for Ethanol: 5.475 bln

US Carryout

**USDA October US Corn 17/18 Carryout: 2.340 bln bu; expected 2.29 bln bu; prior rpt = 2.335

**USDA October US Wheat 17/18 Carryout: 0.960 bln bu; expected 0.945 bln bu; prior rpt = 0.933

**USDA October US Soybean 17/18 Carryout: 0.430 bln bu; expected 0.447 bln bu; prior rpt = 0.475

**USDA October US Soyoil 17/18 Carryout: 1.537 bln lbs; prior = 1.757

**USDA October US Soymeal 17/18 Carryout: 300,000 T; prior rpt = 300,000

USDA World Carryout

**WASDE October World 17/18 Wheat Carryout: 268.1 mmt; expected  mmt; prior rpt = 263.1

**WASDE October World 17/18 Corn Carryout: 201.0 mmt; expected  mmt; prior rpt = 202.5

**WASDE October World 17/18 Soybean Carryout: 96.1 mmt; expected  mmt; prior rpt = 96.0

USDA WASDE World Production

**WASDE October China 17/18 Corn Output: 215.0 mmt; prior rpt = 215.0

**WASDE October S Africa 17/18 Corn Output: 12.5 mmt; prior rpt = 12.5

**WASDE October Argentina 17/18 Corn Output: 42.0 mmt; prior rpt = 42.0

**WASDE October Brazil 17/18 Corn Output: 95.0 mmt; prior rpt = 95.0

USDA October 2017 Crop Production – Highlights

Corn Production Up 1 Percent from September Forecast

Soybean Production Down Slightly

Corn production is forecast at 14.3 billion bushels, down 6 percent from last year but up 1 percent from the September forecast. Based on conditions as of October 1, yields are expected to average 171.8 bushels per acre, up 1.9 bushels from the September forecast but down 2.8 bushels from 2016. If realized, this will be the second highest yield and production on record for the United States. Area harvested for grain is forecast at 83.1 million acres, down less than 1 percent from the previous estimate and down 4 percent from 2016.

Soybean production is forecast at a record 4.43 billion bushels, down slightly from September but up 3 percent from last year. Based on October 1 conditions, yields are expected to average 49.5 bushels per acre, down 0.4 bushel from last month and down 2.5 bushels from last year. Area for harvest in the United States is forecast at a record high 89.5 million acres, up 1 percent from September and up 8 percent from 2016.  Acreage updates were made in several States based on a thorough review of all available data.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Wednesday October 11th, 2017

December 17 corn closed down 3 ¼ at $3.46 and March 18 closed down 3 ¼ at $3.59 ½. November beans closed down ¾ at $9.65 ¼ and January 18 closed down ¼ at $9.76. December wheat closed down 2 at $4.33 ¼ and July 18 closed down 4 ½ at $4.78 ½. Crude oil closed up $.37 at $51.60.

The corn market featured a little more “excitement” Wednesday, though prices did not go in a particularly encouraging direction. Corn finished, closing within mere pennies of the reversal lows from the last day of August. Volume numbers improved today, but remain relatively light, particularly since today was “position day” in front of one of the most important USDA reports of the year. Funds were net sellers of just under 10,000 corn today, which would take their net short up to 185,000 combined futures and options. Traders seemed to be on a mission ahead of the October crop report tomorrow. If option markets were any indication, a big reaction is not expected, but this is a report infamous for curveballs. The USDA has more data at their disposal, which will give some added weight to their production prognostication. The broad market is angling toward yet another “yield up-tick” in this report. Average guess is a 170 bpa yield in a 168.7 to 171.5 bpa range, which compares to the USDA’s Sept estimate of 169.9 bpa. One x-factor could be “harvested acres”, which some believe could be trimmed back from the 83.5 mil in Sept. Despite steady-to-better production expectations, most believe 17/18 US carryout will be decreased to 2.29 BB vs. 2.335 BB in Sept, likely owing to reduced carry-in hinted at by the Sept Quarterly Stocks report.  World carryout will be an afterthought, but most also expect a very small decline there as well. Keep an eye on Brazil, which could see a downtick in production given early planting difficulties.

The soybean market had a quiet pre-report performance where prices remain in a two-sided limited range trade recently (roughly $9.50 to $9.87) brought on by a healthy balance of supply and demand that creates buyers on breaks and sellers on rallies. To break this pattern it would take a USDA surprise or a weather threat in the Southern Hemisphere as the most likely drivers. The USDA flashed a bunch of new sales today with 132 mt beans to unknown and 264 beans to China, all old crop 17/18 in another clear signal that low prices stimulate better demand. In tomorrow’s report trade will be looking to see if the USDA continues their trend of increasing corn and soybean yields.  With the avg. estimates already looking for a .2 bpa increase in both to 170.1 corn and 50.0 beans it would likely require a much bigger jump to 170.5 to 171.0 for corn or 50.5 to 51.0 in beans to give the markets a significant bear reaction while a steady to lower yield projection by the USDA would be supportive. US ending stocks are expected to tighten by around 30 mb to 447 mb.  World soybean carryouts are expected to tighten by 1 mmt to 96.5 mmt.

The wheat complex saw slightly lower price action throughout the night and that trend would carry into the day for both the HRW and SRW wheat contracts. Trade today was a little disappointing. Granted the European wheat contract has been a drag on prices here in the US as Matif wheat has not seen a higher close in over a week and has dropped more than five Euros during this recent break. But there has been an abundance of tenders around this week, starting with Egypt Tuesday morning, the USDA reporting 104 MT HRW sold to Mexico today, Tunisia and Japan in Thursday, Iraq and Ethiopia are in next week, Latin interest surfacing for wheat with Mexico and Colombia active. The fact that wheat has struggled to find a bid the past few days could be an indication that the market is leaning towards bearish data in tomorrow’s crop report. However the report is more of a corn and soybean report than wheat. Expect the wheat complex to be a follower after the data is released. If there is a surprise in the report for wheat it would come in 2017/18 US ending stocks. It has been the surprise of the report the past two months. Back in August many were expecting around a 30 MB reduction from July, with some thinking as much as 50 MB or more, yet the USDA only gave us a 5 MB reduction down to 933 mil. Then last month many were looking for a minor reduction, maybe 10 to 15 MB, yet the USDA left stocks unchanged at 933 MB. After the Sept 29 crop report, traders are now anticipating an increase in US ending stocks of between 10 and 15 MB. The avg guess for 2017/18 World wheat ending stocks are said to be around 262.80 MMT, which is slightly below September’s 263.14.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Tuesday October 10th, 2017

December 17 corn closed down ¼ at $3.49 ¼ and March 18 closed unchanged at $3.62 ¾. November beans closed down ¾ at $9.66 and January 18 closed down 1 at $9.76 ¼. December wheat closed down ¾ at $4.35 ¼ and July 18 closed down 1 at $4.82 ¾. Crude oil closed up $1.30 at $51.23.

The corn market remains “tiresomely boring”, putting in the third consecutive fractionally better/worse finish. Volume numbers reflect this, with less than 100,000 December traded outright today in a $.03 range. Funds were viewed small net sellers as they accumulate a net short in corn that now likely exceeds 175,000 combined futures and options. For seemingly the umpteenth week in a row, the USDA’s corn harvest progress estimate lagged expectations. Corn harvest advanced just 5% wk/wk to 22% complete, which is 15% behind average. The market was looking for harvest progress in the mid-high 20′s. This would imply 17.2 million corn acres have been harvested to date, 25% of which was found in Illinois. Plenty of corn supply around from old crop stocks, so likely not a concern. Conditions up-ticked again this week, finding 1% more in the “Good-Excellent” column and 1% less in the “Poor-Very Poor” column. 64% G-E compares to 73% this time last year. Not that conditions matter much at this late stage. Back to harvest, much of the lower and eastern Midwest was warm and dry Monday and harvesting likely resumed in areas that saw light rain during the past weekend.  Technically, corn still remains solidly within its recent trading range, with tough resistance noted closer to $3.60, while initial support extends down to the $3.45 area. Downside objectives at $3.35 remain open. The “narrowing triangle” pattern remains intact, though we are spending more and more time in the lower portion of it. $3.50 forever and ever. Chart indicators are solidly mixed, reflecting indecisive trade.

The soybean market appeared poised for a rally day but early strength could not hold settling a shade lower on the day.  Prices remain stuck in their two-sided range for now, roughly defined by $9.50 to $9.87 November. A slightly friendly Brazilian production report helped boost the market early on with a fresh USDA sales announcement, strong weekly inspections and a sharply lower dollar all attracting additional buyers to trade $.09 higher at one point, but by mid-day that enthusiasm had melted away and the market slipped lower. A chance for rains for Brazil reaching up into the North or the country in the second week of the outlook was the main negative influence, besides the massive stocks of beans domestically and globally that is. USDA flashed 131 mt beans sold to China, only the second reported sale in the past 7 trading days after a much more active period the prior 6 weeks or so.

It was a mixed session for the wheat complex overnight and throughout the day. During the evening it was Mpls that was the strongest of the three, but during the day that would flip and Spring wheat futures finished the day the poorest at more than $.05, while Chicago was around $.01 lower and KC was able to eke out marginal gains. Offers out to Egypt this morning were similar, if not slightly above week ago levels, and remember, the wheat complex seemed to receive a boost last week with the Egyptian tender, so it was not too much of a surprise to see futures firm early in the session. We have a crop report Thursday morning, but the report is more of a corn and soybean report than wheat. Expect the wheat complex to be a follower after the data is released. That being said, if the report does come out friendly, keep in mind both the HRW and SRW wheat contracts still have a lot of overhead to deal with following the Sept 29th crop report. We have already seen Chicago struggle on its most recent move to $4.50, and see no reason for that to change. Crop progress was delayed a day because of the Columbus Day holiday, and the USDA said winter wheat planting moved up 12 and is now 48% complete vs 57% this time last year and 58% normal. Winter wheat emerged is seen at 25% vs 13% last week, 32% this time last year and 30% normal.

Anna Kaverman

anna@mercerlandmark.com

By~ Steve Heckler

There is several methods of weed control in wheat that we can do to take care of weed pressure. One is tillage and the other is spraying a herbicide. Since most farmers no-till wheat, spraying a herbicide before emergence or after is beneficial. Spraying a herbicide helps with marestail and other winter annuals that are germinating in the fall that can overwinter. We do have different chemical options to consider to take care of our weed pressure in wheat. We have to be careful and read the label for certain stages that we can spray the wheat. Preemergence burndown plus residual would be glyphosate+ Sharpen at 1.5 to 2 oz/acre + MSO. There are products we can use post on wheat in the fall from different companies. Spring post treatments are also available that are very effective also. Consult with your local Mercer Landmark agronomist for the best recommendations for weed control in wheat.

Market Report

Monday October 9th, 2017

December 17 corn closed down ½ at $3.49 ½ and March 18 closed down ½ at $3.62 ¾. November beans closed down 5 ½ at $9.66 ¾ and January 18 closed down 5 ¾ at $9.77 ¼. December wheat closed down 7 ½ at $4.36 and July 18 closed down 6 ¾ at $4.83 ¾. Crude oil closed up $.28 at $49.93.

The corn market featured two-sided activity to start the week.  Sunday night featured an almost “hot” $.01-$.02 higher start, but ultimately could not sustain bullish momentum and finished sharply unchanged by the break. That is pretty much where the market ended up at days’ end, finishing fractionally lower in a four cent range. The funds were believed little changed by days’ end, implying they are short close to 175,000 combined futures and options. The focus this week will no doubt be on the USDA report this Thursday, as well as a harvest pace that continues to lag.  Note, due to Columbus Day, gov’t offices were closed, which delayed the weekly Crop Progress report to Tuesday afternoon. Given the focus on soy, we doubt if corn harvest expanded any more than 10%. Big rains in the heart of the Midwest over the weekend will keep combines parked at many farms. It will also be a wet start to the week for the Eastern Belt. The extreme far west fringe of the Corn Belt is expected to see its first real frost, ending the growing season roughly on time. Hurricane Nate roughed up the Gulf some, but left very little lasting impact on the commodity sector of the day.

The October crop report is due out this Thursday (10/12).  Though trade expectations are quite subdued heading in (weekly straddle trading 7 cents), the importance of the data cannot be understated. In this report, the USDA will have the most “real” field data at their disposal to date, which, for better or worse, will drive a stake through the heart of yield skeptics, or confirm their bullish suspicions. Wire service reports have been littered with private analysts racing to raise their prior projections to catch up with the USDA. The average trade estimate heading in will be a 14.2 BB crop, which is very close to the USDA’s September guess. Carryout is expected to be trimmed back slightly, likely mostly by virtue of the Quarterly Stocks’ 50 MB cut to carry-in stocks from 16/17.

The soybean market spent the session in a back and forth two-sided trade where the sellers won out in the end settling beans down near their session low. We continue to trade in the recent range for now roughly defined by $9.50 to the downside and $9.87 topside for November. Rallies are limited by large global supplies and US new crop harvest advancing while strong demand helps cushion the downside. The new input is the concern for Brazil’s crops where planting is being delayed by dry conditions in the center to north of the country. Dryness persists in the northern growing areas including the key state of Matto Grosso that is delaying planting and slowing germination what little is in the ground at this point. The late selling in beans and meal picked up in part because of the mid-day model run showed rains stretching north into Mato Grosso in the 8-10 day period.

It was a quiet news day, and with the path of least resistance lower, the wheat markets obliged with defensive price action throughout the session. Mpls may still be benefitting some from China being on the export sales report Thursday, finishing the strongest at only a few ticks lower. Do not really know what was behind the better start to the overnight, but selling surfaced as we neared the start of the European trade, and the markets never really recovered. As we look ahead to the rest of the week, Egypt is back in for wheat. They were just in last Monday, and it did seem to have supported prices some before the late week’s collapse. We also have a crop report Thursday morning, but the report is more of a corn and soybean report than wheat. Expect the wheat complex to be a follower. That being said, if the report does come out friendly, keep in mind both the HRW and SRW wheat contracts still have a lot of overhead to deal with following the Sept 29th crop report. We have already seen Chicago struggle on its most recent move to $4.50, and see no reason for that to change.

Anna Kaverman

anna@mercerlandmark.com