Blogging by the Bushel
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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

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