Blogging by the Bushel
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Market Report

Thursday October 5th, 2017

December 17 corn closed up 1 ¼ at $3.49 ½ and March 18 closed up 1 ¼ at $3.62 ½. November beans closed up 10 at $9.68 ¼ and January 18 closed up 10 ¼ at $9.79. December wheat closed down 1 ¼ at $4.40 ¾ and July 18 closed down ¼ at $4.86. Crude oil closed up $.83 at $51.15.

Another day of two-sided trade in the corn market. A $.02 rally overnight stalled out mid-morning, only to find its footing again around the noon hour and ultimately falter again into the close. That likely sounds a little more exciting than it actually was. Session volume was light in a $.04 range. The funds may have been stopped out of a few shorts today, but we would still estimate they are heading into tonight net short close to 175,000 futures and options.  We are now exactly one week away from the USDA’s latest crop production update (Thurs the 12th); accordingly, the parade of analyst estimates ahead of the number is well underway.  Overnight, satellite-forecaster Lanworth published a 171.3 bpa yield estimate, which compares to the 170.8 bpa put out two weeks ago.  Informa was not too far behind, up-ticking yields to 170.5 bpa, from 169.7 bpa prior, for a crop of 14.182 billion bushels.  Thus continues the general theme of private analysts sidling up to the USDA’s previously much-maligned crop production forecasts. The weekly export sales report did not appear to thrill the markets any.  Net new 17/18 sales of 814,100 MT were reported, mostly to Mexico, Korea, and Colombia; even China made an appearance, picking up a cargo. Note, this still pales in comparison to the 2+ mmt booked in the year ago week, but at this point, we’ll take it.

The soybean market bounced sharply today led by strength in soybean meal as oil set back again giving up the gains made the past couple of days. For beans, there was not a whole lot of news to support the rally – weekly exports were good at 1.016 mmt, but as expected. There is talk that China is back pricing US beans so keep an eye out for fresh sales activity after 3 days of nothing while they have been away from the market this week for holiday. There is also a seasonal spread date tomorrow to buy beans and sell wheat and to buy beans and sell corn so perhaps there was some front running to this trade. The dollar traded sharply higher and into a new recovery high up .50 but unlike the start of the quarter money flow trade which saw commodities sell off while the currency and equities rallied, today the grains, meats and energies mostly disregarded the strength in the dollar and equities and participated in the rally. Elsewhere in the news, Informa economics updated their crop production estimate this morning. They have bean yield at 50 bpa fro a crop size of 4.474 bb. The USDA will update their numbers with a crop report one week from today. Last month the USDA was using a 49.9 and 4.431 bb bean crop so Informa is fairly close to those estimates from last month.

The wheat complex finished the day pretty much how it started, with Mpls a little better, while Chicago and KC were slightly weaker. Mpls received a bit of positive news this morning when China popped up on the export sales report taking in a cargo of HRS. This looked to be the catalyst behind Mpls taking over the leadership role of the complex, if only for a day. Cannot get too excited, as data from the crop report last Friday will keep a lid on any thought of an extended rally. The export line up in general is pretty light, outside of Japans weekly tender today. For a second consecutive week, export sales came in a little better than expectations, with this morning’s figure coming in at 492 MT. Outside of the China business, most of the other sales looked routine.

Anna Kaverman

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