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Archive for March, 2018

Market Report

Thursday March 15th, 2018

May 17 corn closed down 2 at $3.86 ¾ and July 18 closed down 2 ¼ at $3.94 ½. May soybeans closed up 8 ½ at $10.40 ¾ and July closed up 8 ¼ at $10.51 ¼.  May wheat closed down 10 at $4.78 ¾ and July 18 closed down 10 ¼ at $4.96. Crude oil closed up $.23 at $61.25.

May corn settled fractionally lower. Funds were sellers of 9,000 corn today bringing their estimated net long position to about 211,000 contracts with futures and options. Export sales were way above expectations with the USDA announcing 2,505,100 mt with expected sales of 1.3-1.8 MMT. Two issues on traders’ minds in the corn market are likely USDA’s big export estimate of 2.225 BB and USDA’s Grain Stocks and Prospective Planting reports on March 29.

In the weather, Heavy rain fell on portions of northeastern Argentina Wednesday while most key corn and soybean producing areas were warm to hot and dry. Today’s forecast is a little wetter for key crop areas in and around Cordoba Mar. 22-24 with improvements in soil moisture and some relief from drought expected in a large part of Argentina during the next two weeks.  Most of the notable crop improvement in yields should be confined to a small portion of the country where rain this season has been most timely and crops are still immature. In Brazil, Some of the driest areas will benefit from rain during the next several days and stress to crops should be eased.  Sunday will be wettest. Meanwhile, rain elsewhere during the next two weeks will cause regular interruptions to fieldwork, but the focus of rain should not remain on one region long enough to cause serious delays to fieldwork.

“Recovery” was the word of the day in the soy complex. Futures sported double-digit gains at one point. Meal finished “sharply unchanged” in a $5 range. Fund traders were viewed net buyers of 10,000 soy today, sellers of 3,000 meal, and buyers of 5,000 oil. That would leave them net long the entire complex to varying degrees: +135,000 soy, +8,000 oil, and +105,000 meal.  Heading into Friday, the weekly soy continuation chart is clinging to $.11 gains, mostly by virtue of the March contract expiration. Next week’s price direction will hinge almost exclusively on the Argentine forecast. That being said, it may take some time to figure out exactly whether that ends up bullish or bearish. Today’s forecast is a little wetter for key crop areas in and around Cordoba Mar. 22-24. The system is expected to be somewhat erratic, potentially missing many crop areas. Placement of the rains will be important, as well as how mature the crop is in those areas, too. 2% of the soy crop is now believed harvested. Big overnight rains fell Wednesday on the NE part of Argentina, far from production regions. Brazil remains in much better shape with a monster crop expected.  The focus back at home will no doubt be the potential for big acres in the March intentions report on the 29th.

A fairy robust weekly export sales report helped reignite bulls.  The USDA found 1.27 MMT in new soy sales, which was 30% greater than the prior 4 week average and toward the high-end of forecasts. China was a decent-sized buyer taking 1/3 of the total, but it was encouraging to see a decent slug of business to a wide range of other buyers. This would take total US soy sold and shipped to 49.3 mmt versus 53.4 mmt on the books this time last year. Meal sales were “ok” at 173,000 MT, while oil exceeded very low expectations with 31,600 MT of sales.

Technically, the bean market staged a tentative minor reversal out of a push to new lows overnight, though they still really never threatened the prior day’s settlement. Taking out today’s lows would be a negative technical signal, and would likely cue a more substantial correction in soy. Meal is similar, with today’s lows key to a deeper break. Both feature significant resistance near recent highs.

Chicago weakened a little into the morning break, but trade was still poised to start the day a little better. Very disappointing export sales data may have been the trigger behind for what was about to come during the day session. Not because the numbers were bad, but it just reiterates the fact that despite the recent break, US wheat prices continue to be not that competitive to the rest of the World. Taking a look at World values, it still shows US prices above everyone else. US is currently around $213/mt compared to French, Romanian and Russian at around $208, Baltic around $209 and German around $211. We have a big disadvantage in freight as well. There also was a seasonal trade (for roughly two weeks) that started today that bought beans and sold wheat. That may have put a small burden on trade as well. The drought monitor index this morning showing no relief across the HRW belt, and the three-month outlook maps showing above normal temps and below normal temps for that same region, just could not offset the other news. The sell-off did take futures to an area where we should start to see support.

Export sales this morning were awful, coming in at 163 MT with an additional 57 MT of new crop for a combined total of 220 MT. Total sales to date are 815 mil bu vs 932 mil bu last year and USDA projections of 925 MB. Still no confirmation of SRW wheat sold to private Egyptian buyers. After Wednesday’s close, Egypt’s GASC announced they were in for wheat for April 15-25. The GASC received only six offers (three Russian and three Romanian) this morning. The lowest two offers were Russian. That was roughly $4.00 more expensive than their previous purchase last week.

Anna Kaverman

Market Report

Tuesday March 13th, 2018

May 17 corn closed up 1 at $3.91 ¾ and July 18 closed up 1 ½ at $3.99 ¾. May soybeans closed up 7 ¾ at $10.48 ¾ and July closed up 8 ½ at $10.59 ½. May wheat closed down 4 ¼ at $4.86 ½ and July 18 closed down 3 at $5.04 ½.  Crude oil closed down $.58 at $60.75.

The question of the day in corn: do you “buy” yesterday’s reversal higher or “sell” today’s rally attempt? The corn market was in bull mode early, with futures trading as much as $.05 higher mid-day. After wheat cooled off, so did corn. Managed Money traders were net buyers of a little over 10k corn today, which would leave them net long 230,000 combined futures and options.

“Policy relief” may have given both corn and ethanol a boost on the open. Bankruptcy courts were said to be leaning toward a settlement for a Philadelphia refiner short some $300 million worth of RIN credit obligations. The current deal suggests the gov’t would “disappear” a decent chunk of that obligation.  Ethanol lobbyists are said to be preparing a formal complaint. As usual, “no news is good news” on the RFS. The other headline was the EPA Admin blaming speculators for elevated RIN costs.  In reality, RIN carryout has tightened amid refiner reluctance to blend above 10%. Tomorrow’s weekly EIA report should show ethanol production hanging right near last week’s levels.  Demand should improve seasonally, which should swing ethanol stocks back to a small net draw.

Export business continues to offer a satisfying rumble in the background of the corn market. The USDA this morning confirmed the purchase of 210,000 MT of corn to South Korea, though it is listed as optional origin. Private Korean firms remain active in the markets, booking corn for late spring. Turkey was said to pass on their international tender. A large (and growing) outstanding sales book suggests we will quickly improve on a lackluster shipping pace to date.

Soybeans followed yesterday’s reversal with another positive performance as we stabilize the recent slide that took the market $.50 off the highs. It was a very quiet trading session reflected in the low volume in May beans which was the lightest in 5-weeks. Fresh fundamental news was even lighter. Uncertainty about Argentina’s final production persists which is a good reason for beans to trade cautiously here and see how the growing season finishes up. The trade is generally plugging in a 42-44 mmt type of crop for Argentina and assuming we get the forecasted rains over the next couple weeks it should solidify those reduced production ideas. With the help of Brazil’s record or near record crop and very healthy old crop supplies globally, there would be no reason for the recent highs in beans or meal to be seriously challenged. If the rains don’t show all bets are off. Look for more of a two-sided trade to develop near term with an increasing focus on US acreage heading into the report at the end of the month.

Around an hour into the session Monday night the wheat complex prices rallied to a couple cents higher, and trade would remain bid the rest of the night. This trend carried into the day with Chicago futures rallying higher and KC futures rallying. Then the midday maps came out. What it showed was a shift in the weather pattern for two weeks out. Some meteorologists are downplaying the possible change, but the GFS model shows a drastic change that if it materializes, will provide the entire state of Oklahoma, part of the Texas panhandle and southern Kansas with one to two-inch rains. This change looked to be the catalyst that took Chicago off its highs.

Condition reports Monday afternoon was a mixed bag, with Texas and Oklahoma seeing some improvement, while the Kansas crop slipped a bit. Coming into the morning, the forecast called for above normal temps and limited chances of precip for the rest of the month across much of the HRW area. The thinking was the 35-cent break over the past several days may have been all the flushing the wheat complex needed. The possible shift in the weather pattern in the midday maps may change that thinking. Especially if other weather models start picking up that same shift in pattern. Stay tuned. Regardless, we are beginning to see business pick up a little this week, which should give the complex some support on breaks.

Anna Kaverman

Market Report

Monday March 12th, 2018

May 17 corn closed up ¼ at $3.90 ¾ and July 18 closed up ½ at $3.98 ½. May soybeans closed up 1 ¾ at $10.41 and July closed up 2 ¾ at $10.51. May wheat closed up 1 ½ at $4.90 ¾ and July 18 closed up 2 at $5.07 ½.  Crude oil closed down $.59 at $61.33.

The corn market opened under a little pressure Sunday night.  The market maintained a weaker tone for most of the day, but flipped to “fractionally-better” midday. The market was unable to extend the rally back much. Funds were viewed close to net even on the day. They were sellers early and buyers late perhaps to defend their position. They are net long an estimated 215,000 corn futures and options.

Export business remains the story in the US corn market. Under daily reporting Monday, the USDA said Japan bought 107,752 MT and “unknown” 254,800 MT. This joins other announced business last week, along with a private South Korean buying spree.  Another strong weekly sales report Thursday is almost assuredly in the works. The mid-day grain inspections report found the expected increase in US corn shipments. Year to date, corn shipments stand 20.3 mmt versus 28.9 mmt on the books this time last year.

As per usual on the Sunday night open, South American weather was the prime motivator. Though spotty weekend precip in Argentina did not do much good, it was the promise of much better rain a week plus away that prompted a weaker open. There is concern that this rain may once again fall just outside of the major growing areas, but time will tell as the forecast evolves. Either way, traders are not sure how much improvement a good soaker would have at this late juncture. It would likely do the most good for beans, who are still in a key development stage, but most of the corn in Argentina is likely “made” or “toast” at this point. Brazil’s outlook is much better. Important second crop corn planting in Brazil is believed to have caught up with normal, and the trade will be eager for reports on just how much got planted.

Soybeans shrugged off a weaker overnight trade to reverse higher as the market looks to stabilize its slide of $.50 off the recent contract highs. Uncertainty about Argentina’s final production persists which is a good reason for beans to trade cautiously here. The trade is generally plugging in a 42-44 mmt type of crop for Argentina and assuming we get the forecasted rains over the next couple weeks it should solidify those production ideas. With the help of Brazil’s record or near record crop and very healthy old crop supplies globally, there would be no reason for those highs to be seriously challenged.  Look for more of a two-sided trade to develop near term with an increasing focus on US acreage heading into the report at the end of the month. The GFS mid-day is promoting 1-3 inch rains for late this week on the dry eastern production areas of Argentina which will still be helpful for the later planted crops but probably too late for others.

Chinese trade retaliation remains a wild card but it would be surprising for China to cut off US soybean imports despite threats to ‘target’ them. China has already shifted much of their buying away from the US and to Brazil this year but this was easy because of the higher protein Brazilian crop which happened to be a record in size. China also imposed a 1% FM requirement on US supply but not South America which certainly counts as a first strike in the trade war in some estimation.  Their recent return to US imports in recent weeks however tells you their priority is keeping their population fed no matter what, even in the midst a trade dispute/negotiation.

The wheat complex ended the day a little better across the board. Overnight, trade started a few cents lower across the board. There was not a lot of fresh news over the weekend. Iraq passed on their tender. Algeria snap tendered, but they will most likely scoop up some French wheat. Taiwan will pick up some US on Tuesday, but that is basically it on the export front. Conditions this afternoon saw some improvement across the HRW wheat belt – not a lot, but the numbers were so bad at the end of Feb they could not have gotten much worse.

A couple state by state wheat condition ratings came out this afternoon. Most states begin their weekly condition reports in April. Of the three states reporting, Texas improved the most with G&E moving up 3% to 13%. P&VP saw an 11% improvement, but over half the crop still falls into this category as it came in at 53%. Oklahoma wheat conditions improved slightly. G&E moved up 1% to 7% (but still 0 excellent). P&VP improved 6%, but it is still at an alarming 72%.

Anna Kaverman

Market Report

Friday March 9th, 2018

May 17 corn closed down 3 at $3.90 ½ and July 18 closed down 2 ½ at $3.98. May soybeans closed down 24 ¾ at $10.39 ¼ and July closed down 24 ¾ at $10.48 ¼. May wheat closed down 10 at $4.89 ¼ and July 18 closed down 9 ¾ at $5.05 ½.  Crude oil closed up $1.90 at $61.96.


CORN – Corn eased upward leading into the March WASDE report on little fresh news.  The report supplied food for the bulls and prices spiked higher.  Nearby corn traded to its highest level since July.   A bullish case can be made for corn.  Funds continue to be buyers and they haven’t been disappointed.  US corn is still the cheapest in the world and demand remains strong.  Uncertainty surrounds the corn crop size in Argentina and Brazil.  Soon US planting weather and acreage estimates will take center stage.  Overshadowing the friendly side to prices are big world supplies.

The March 8th WASDE report made few changes to the 2017/2018 US balance sheet: ethanol usage was raised 50 million bushels to 5.575 billion bushels and exports were increased a surprisingly large 175 million bushels to 2.225 billion bushels.  This cut ending stocks 225 million bushels to 2.127 billion bushels.  The average estimate was 2.312 billion bushels and in February it was 2.352 billion bushels.  World ending stocks were close to the pre-report projection at 119.17 mmt versus 199.63 mmt estimated and 203.1 mmt last month.  This would be the first-time global ending stocks are under 200 mmt since 2013/2014.  Argentina’s corn crop was pegged at 36 mmt, down from 39 mmt last month and 36.3 mmt estimated.  Brazil’s corn crop came in at 94.5 mmt, compared to 91.4 mmt estimated and 95 mmt last month.  The report was termed friendly for corn.  As of March 7th, Brazil’s first corn crop was 40% harvest, splitting last year’s 38% complete with 2016’s 42% complete.  Their safrinha or second corn crop was 65% planted, behind last year’s 79% complete and 86% complete in 2016.

Weekly export sales were the third highest of the marketing year at an impressive 73.1 million bushels, bringing total sales to 1.62 billion bushels.  The gap between last year’s commitments and this year’s is narrowing.  We are now just 7% behind last year compared to 12% behind just two weeks ago.  The USDA is calling for a 3% decline in year/year exports, based on the latest USDA number.  We need to average 23.1 million bushels of weekly sales to hit the USDA’s latest export figure.  Weekly ethanol production was up 13,000 barrels to 1.057 million bpd.  Stocks rose by 100,000 barrels to 23.1 million barrels.  The grind margin fell 4 cents per gallon to 10 cents per gallon.

OUTLOOK:  Looking ahead, the March 29th prospective planting report, South American weather, US spring weather forecasts, and whether the strong demand continues, will be the price drivers.  Traders also believe the USDA is overestimating the Brazilian corn crop.  The USDA took into consideration Conab’s Brazilian soybean estimate, but not their corn forecast.  Strong demand should limit any significant setback in corn, but Mother Nature’s actions will trump everything else.

SOYBEANS – After setting a contract high last Friday at $10.82 ½ per bushel, May beans retreated this week, closing down four out of the last five sessions on fund profit-taking ahead of the monthly crop report. The uptrend in the November contract was extended until the middle of the week, when a doji formation occurred.  A doji is when the contract opens and closes at the same price.  It usually indicates a change in direction.  In this case, that is what happened.  The mid-week high in November beans was a new contract high at $10.48 per bushel.  The contract edged lower the balance of the week.

The March WASDE report made just a couple of usage category changes.  It raised crush by 10 million bushels to 1.96 billion bushels and lowered exports by 35 million bushels to 2.065 billion bushels.  Exports now reflect a 5.1% decrease from last year.  Ending stocks climbed 25 million bushels from 530 million last month to 555 million bushels.  This was much higher than the 531-million-bushel estimate.  Global ending stocks of 94.4 mmt were slightly lower than the 95.3 mmt forecast and much lower than last month’s 98.1 mmt.  Argentina’s bean estimate fell from 54 mmt to 47 mmt, although the average trade estimate was 48.1 mmt.  Brazil’s bean production outlook increased from 112 mmt last month to 113 mmt but was slightly below the 114 mmt estimate. Argentina’s ending soybean stocks fell from 16 mmt to 13.5 mmt but would still be the second biggest in history.  In general, the reports were viewed as bearish for soybeans.

Weekly export sales were huge at 92.2 million bushels and the second highest of the marketing year.  So far this year, China has bought 27.7 mmt compared to 34.3 mmt last year at this time.  We are currently only 9% behind last year and compared to 14% behind two weeks ago.  The USDA is predicting a 5% decline in year/year exports based on the latest figures. Considering the March revisions, we need to average 12.5 million bushels of weekly sales to achieve the USDA’s 2.065-billion-bushel export target, which would be the second largest March-August export pace ever.

There is increasing concern over the new import tariffs that are set to go into effect March 23rd.  A 25% tariff on steel imports and a 10% import tariff on aluminum may spark trade retaliation from China.  For now, it looks like Canada and Mexico will temporarily be exempt from the tariffs.

OUTLOOK:  While this week’s USDA numbers looked bearish, weather in both South America and the US will continue to be monitored.  What the outcome on NAFTA will be is a negative issue with a Purdue University survey showing one-third of responding growers believing we could pull out of the agreement.  The new tariffs on steel and aluminum imports into the US may yet result in some sort of trade war.  South American weather will remain front and center of daily trade chatter.  Watch for any trade implications resulting from the new tariffs and how South American weather develops in the short run for price direction.  The funds are long, but seemingly need multiple reasons to liquidate.

Anna Kaverman

Market Report

Tuesday March 6th, 2018

May 17 corn closed up 1 at $3.88 ¼ and July 18 closed up 1 at $3.95 ½. May soybeans closed down 2 ¾ at $10.74 ¾ and July closed down 2 ¾ at $10.83. May wheat closed down 2 ¼ at $5.07 and July 18 closed down 2 at $5.21 ¼.  Crude oil closed up $.06 at $62.45.

The corn market extended its win streak to eight of the last ten days, finishing Tuesday with small gains. Action was mixed today, flitting between small losses and “sharply unchanged” for most of the session before finding some late buying yet again.  Managed Money traders were viewed net buyers of another 7,500 corn today, which would put them net long close to 170,000 combined futures and options.

Exports were in the news early, with South Korea paying $223/mt early morning for a cargo of corn. They had tendered for 165,000, but only agreed to buy 60,000 mt. It’s not a secret why, it’s the price. On February 12th, they paid $205/mt for similar quantities of corn, which is an increase of about 9%.  In that time, futures have rallied 4%; the balance likely accounts for higher rail freight. Turkey is also in for corn, but that business will likely go to Black Sea due to freight advantages. A probable stronger shipping pace into the second half of our corn market year should quickly help corn exporters gain ground on last year (currently 18.9 vs. 27.4 last year).  This will likely be especially true given South American offers being pulled back some in response to Argentina’s drought.

Speaking of weather, excepting a few rains in the north (where they are not needed), Argentina was mostly dry once again. Most of the country is not expected to get enough rain over the next week to stop the decline in crop production potentials. Mid-March seems to be the best odds for a general soaker, but it could be too late for many fields. Brazil remains more mixed, as farmers try their best to dance around rains to plant second crop corn. The far south is catching some of the Argentine drought.

The soybean market took a breather today in the old crop even as new crop pushed into new highs. Soybean oil gained on meal moving the share to a 5-session high, oil was also supported by a bounce in palm oil off its lows. In terms of weather, nothing has changed as the forecasts offer little relief to the ongoing drought in Argentina for the near term. Until you can stabilize production ideas for that crop the bean and meal rallies are likely to have underlying support. The crop report on Thursday inches another day closer where those Southern Hemisphere crops will be spotlighted (Argentine beans down hard, Brazil beans up but not enough to offset). US crush could be bumped higher thanks to the sharp rally in margins although further export reductions may be somewhat clouded with the very recent resumption of Chinese/unknown exports totaling 1.090 mmt old crop over the past couple weeks.  Cash sources indicate China continues to shop US beans.

The slightly better condition reports Monday afternoon set the tone for the overnight trade, and the selling intensified during the early part of the day. Both Chicago and KC fell lower before catching their breath, stabilizing and starting to dig out of its deep hole. Mpls continues to distance itself from both the HRW and SRW wheat markets – on rallies and on breaks. Spring wheat prices only slipped lower, and was the first to rally. By late morning futures had moved $.15 off its lows, and prices remained slightly higher through the close. Chicago and KC were not as fortunate, but they both were able to rally around $.12 off its lows and post only a slightly lower settle. Trade just had too many negative components to it today. Even the Egyptian tender had some negative overtures to it. Granted, the GASC paid up a little for the wheat they bought this morning, but US soft wheat prices, which were very comparable to Russian wheat prices a few weeks ago, has all of a sudden become $20 more expensive.

Crop Report Thursday. The data should carry very little weight for future price direction in wheat. Analysts expect the report to show US 2017/18 wheat ending stocks very little changed from the 1.009 bil bu in February. The report is expected to also show very little change in 2017/18 global wheat ending stocks from the February report which was estimated at 266.1 MMT.

Anna Kaverman

Market Report

Monday March 5th, 2018

May 17 corn closed up 2 at $3.87 ¼ and July 18 closed up 2 at $3.94 ½. May soybeans closed up 6 ½ at $10.77 ½ and July closed up 6 ½ at $10.85 ¾. May wheat closed up 9 ¼ at $5.09 ¼ and July 18 closed up 8 ¾ at $5.23 ¼. Crude oil closed up $1.30 at $62.39.

The corn market stayed true to recent trends, starting the week out with two cent gains. Futures spent most of the day near unchanged, but found some late buying to perk things up a little.  Managed Money traders continued to add to length, picking up another 10,000 corn today, which would leave them net long over 160,000 tonight. The familiar Sunday night theme of “continued Argentine crop deterioration” helped all the markets to a firm open.  There was some rain around this weekend, but it was likely too erratic and light to do a lot of good for long-suffering Argy. Additional hot/dry is likely in more areas than not, which will keep the pressure on yields. Ahead of Thursday’s report, analysts forecast Argentine corn production at 36.3 mmt, which compares to the Feb USDA report at 39 mmt.  Most are also expecting “some” reduction from the USDA’s “optimistic” 95 mmt Brazil crop projection from Feb. Conditions and crop potentials are much less dire in Brazil, though it remains to be seen if Mother Nature prevented farmers from getting all the intended second crop in the ground.  The U.S. will buckle down for 2-3 days of storms. Elsewhere, ethanol was “quietly firm” to start the week, managing to keep up with the corn rally for the first time in a couple weeks.

The soybean market shrugged off a mixed overnight trade to establish a new high close for both old and new crop beans. Weather and production uncertainty in Argentina continue to underpin the market with crops slipping and no sign of relief in the near term outlooks. The trade has an eye on Thursday’s USDA crop report where the average estimate on Brazil corn is 91.8 mmt vs. 95.0 mmt last, Brazil beans 114.0 vs. 112.0 last, Argy corn 36.3 vs. 39.0 last, Argy beans 48.1 vs. 54.0 last.  World ending stocks are estimated at 198.9 mmt for corn vs. 203.1 in Feb and 229.8 in 2017, beans 95.5 vs. 98.1 in Feb and 96.1 in 2017. Weekly soybean export inspections totaled 990 mt which was bigger than the 800 mt trade estimate. Of this total just 291 mt or 29% was destined for China which is a marketing year low (they had generally been in the 70-85% range most of the year but seasonally declining the past 60 days).

Trade actually started the day on the defensive a little, with futures giving back their overnight gains and briefly trading a little lower, but the market responded with a $.07 rally that took futures up near their overnight highs. The rest of the day saw higher price action, with KC taking over the leadership role during the midday rally. The HRW wheat contract would reach almost $.13 higher late in the day before weakening a bit into the close and settling a penny off its highs. The SRW wheat contract briefly traded double digits higher late in the session before also weakening a bit into the close and settling a penny off its highs. Mpls continues to not be an interested participant in rally or sell-off days. Mpls continues to distance itself from the other two markets, ending the night slightly lower. Weather will continue to be the big driving force for US wheat. The drought area in hard wheat country has trade starting to downgrade US HRW wheat production to at the max 600 mil bu vs 750 last year and 1080 the year prior to that. Some have it as low as 550 mil bu. Ending stocks are certainly going to be drawn down by 100 mil bu or more.

A couple state by state wheat condition ratings came out this afternoon. Most states begin their weekly condition reports in April. Of the three states reporting this week, Texas improved the most with G&E moving up 6% to 10%. P&VP saw a 9% decline, but it is still at an unimpressive 64%. Kansas wheat conditions fell slightly from last week. It was unchanged in G&E at 13%, but P&VP moved up 1% to 50%. Oklahoma wheat conditions improved slightly (could not get much worse). G&E moved up 2% to 6% (but still 0 excellent). P&VP improved 1%, but it is still at an alarming 78%.

Anna Kaverman

By~ Jeff Prickett
Plant Health University
By Jeff Prickett
Greetings from Mercer Landmark! We recently held a “Plant Health University” meeting for our growers in some areas. This was a joint meeting put on by Bayer Crop Science and Winfield United. I thought it would be valuable to share the highlights of this meeting with those who couldn’t attend. Plant health and disease control is a key part of crop management that can take our yields to the next level and add valuable bushels to our bottom line.
Here are the highlights from Plant Health University Meeting:
Fungicide “University” Notes
Three most common sites of action:
1. Strobilurin (Group 11) – Preventative – need to be applied prior to disease presence.
a. Lots of similarities between strobilurin chemistries.
b. Broad spectrum of disease activity.
c. Good residual activity
d. Improves plant health, reduces stress, maximizes limited resources.
e. Slow “battery drain” of mitochondria of disease pathogen.
2. Triazoles (Group 3) – Mostly curative. Control disease.
a. Any lesions will remain, but disease will be stopped.
b. Greater variation among triazoles in spectrum of control and length of residual.
c. Cell destruction by “exploding” cell walls of disease pathogen.
d. Some control quicker, some last longer.
3. SDHI (Group 7) – The specialist. Also preventative
a. SDHIs tend to be really good at a few diseases.
b. Targeted for key diseases
Products with effective curative and preventative activity are recommended for resistance management.
Be sure the product you are choosing has activity on the diseases you are targeting.
Target corn hybrids with known disease issues to maximize ROI. (High response to fungicide scores).
Mercer Landmark Fungicide Yield Trials show a 5 year average soybean yield increase of approx. 4bu/ac.
Partner soybean fungicide applications with an insecticide like Leverage 360 or Grizzly Too to increase consistency and yield increase. Mercer Landmark Fungicide plus Insecticide Yield Trials show a 5 year average soybean yield increase of approx. 5.29bu/ac
Mercer Landmark Fungicide Yield Trials show a 5 year average corn yield increase of approx. 13.15bu/ac.
Utilize foliar nutrition products in conjunction with your fungicide application to help the plant maximize limited resources based on tissue sampling.
Applying fungicides ahead of dry weather can positively impact yields by reducing plant stress during drought periods.

For more information concerning plant health and disease management, please feel free to reach out to any of us agronomy staff here at Mercer Landmark. We have the knowledge and experience to help you make the right decision and product selection for your specific situation. We are here to help! Have a safe spring!

Jeff Prickett – CCA
Mercer Landmark
Agronomy Sales/Trusted Advisor

Market Report

Friday March 2nd, 2018

May 17 corn closed down 1 at $3.85 ¼ and July 18 closed down 1 at $3.92 ½. May soybeans closed up 3 at $10.71 and July closed up 2 ¾ at $10.79 ¼. May wheat closed down 15 ½ at $5.00 and July 18 closed down 14 at $5.14 ½. Crude oil closed up $.29 at $61.09.


CORN – Corn has now closed higher in six out of the last seven weeks.  Underlying support from declining crop conditions in Argentina and the fund appetite for length propelled corn to fresh highs.  The May contract hit $3.88 going into the weekend, before breaking its streak of four consecutive higher closes.  For the week, May corn rallied 10 ¾ cents to settle at $3.85 ¼, July was up 10 ¼ cents at $3.92 ½, and the December contract gained 7 cents at $4.04 ¼.  An interesting observation:  in calendar year 2017, December corn traded at or above $4.00 in 28 of the 241 trading days.  The first time above $4.00 was February 13, 2017 and the last time was July 21, 2017.  So far in 2018, we traded at or above $4.00 in the December contract 5 times, every day this week.

Demand for corn continues to be robust.  Weekly export sales were substantially higher than pre-report forecasts.  Sales this week were 69 million bushels, closing the gap versus last year from 12% behind to only 9% behind.  The USDA’s export forecast of 2.05 billion bushels reflects a year/year decline of 10.4%.  It pays to be the cheapest source of corn in the world. Weekly ethanol production fell by 24,000 bpd to 1.044 million bpd.  Ethanol stocks increased 200,000 barrels to 23.0 million barrels.

The BAGE rated 77% of their corn crop as poor/very poor versus 57% on February 15th.  They reported 70% of the crop silking compared to 84% last year.  They left their corn crop estimate for Argentina unchanged at 37 mmt.  The USDA was last at 39 mmt.  Brazil’s first corn crop was reported at 31% harvested versus 29% last year and 33% complete in 2016, as of February 23rd.  The planting of their safrinha corn crop was 46% complete, compared to 58% last year and 74% complete in 2016.

OUTLOOK: Strong demand for the cheapest source of corn in the world, which just happens to be US origin, is contributing to the upswing in prices.  On-going concern over what the effect of dry Argentine conditions and wet Brazilian conditions will have on the final crop size has pushed prices higher.  These two headlines have captured the market’s attention since the calendar flipped to 2018.  The crystal ball isn’t clear enough to say where we stop, but a run toward the magical $4.00 in May and $4.20 in December can’t be ruled out.  If the weather changes, or we end up in some sort of trade war, the tide may turn in a flash.  It seems prudent to reward the market for its action with at least some old crop and new crop sales.

SOYBEANS – May soybeans have now closed higher in 6 out of the last 7 weeks.  Front and center to the strength has been the declining crop in Argentina.  This week, the BAGE cut their Argentine soybean forecast to 44 mmt.  This compares to the USDA’s 54 mmt estimate on the February WASDE report.  The trade is likely trading a crop somewhere between 46-48 mmt.  Speculators are adding to their net long position and have not been compelled to change their ways.   Any change in the Argentine weather forecast could catch many on the wrong side, but it seems every time a decent rain event pops up on the forecast, we are disappointed in coverage and/or quantities.  May beans hit a new contract high at $10.82 ½ per bushel this week and the November contract reached $10.42 ¾ per bushel.  For the week, May beans popped 23 ½ cents higher at $10.71, July rallied 23 ¼ cents to $10.79 ¼, and November managed a 9 ¼ cent increase to $10.37 ¼ per bushel.  The meal market has been the leader, pulling beans with it, and closed $14.60 higher for the week at $392.90 per ton.

Casting a cloud over the positive price action late in the week came out of Washington.  Import duties 25% on steel and 10% on aluminum may be imposed as soon as next week.  Traders are concerned of a trade war that may impact the agricultural sector.  The two biggest exporters of steel to the US are Canada and Brazil.  China is well down the list at number 11, but that doesn’t really ease anyone’s worry.  Put this on your list of what to watch in the coming weeks.

Weekly export sales were above estimates this week at 31.5 million bushels, rebounding after last week’s net cancellations of 4 million bushels.  Old crop sales commitments of 1.674 billion bushels are 13% behind last year.  The USDA is projecting this year’s sales to be down 3.5 % versus last year. China’s commitments, so far this year, are 26.4 mmt, lagging last year by 7.8 mmt.  New crop sales totaled 4.5 million bushels.  Total new crop commitments are 58 million bushels, and now surpass the 55 million bushels on the books last year at this time.  Next week’s sales report should be good with 824 tmt of sales announced to China and unknown this week for the 2017/2018 crop year, and another 123 tmt for 2018/2019.

OUTLOOK:  Be wary of any further rumblings of possible trade retaliations resulting from our newest import tariffs, as well as any change in crop conditions in South America.  These two features will be key to our next move.  As the calendar moves forward, US planting intentions and Midwest weather will become increasingly important to price direction.  The rally we’ve seen in prices since the beginning of the year is giving growers a chance to begin putting on some sales for new crop.  Pricing at new contract highs should be considered.


The wheat market saw significant profit taking today despite crop worries in the US winter wheat. There does not seem to be much relief for the HRW next week either. One of the major storylines in the US is dryness in the Southern Plains. Monthly crop conditions showed another decline in the major HRW growing state of Kansas. 49% of the crop is now rated as poor or very poor. The latest drought monitor shows the entire state of Kansas in some degree of drought.

Anna Kaverman