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Monday January 8th, 2018

March 17 corn closed down 4 at $3.47 ¼ and July 18 closed down 3 ¾ at $3.63 ¾. March soybeans closed down 4 at $9.66 ¾ and July closed down 3 ¾ at $9.87 ¼. March wheat closed down 3 at $4.27 ¾ and July 18 closed down 2 ¾ at $4.53. Crude oil closed up $.31 at $61.72.

The corn market opened the week on the defensive, finishing lower. Some of the selling may have been in anticipation of index fund lightening of length, which commenced without feature near the close. Another 25,000-30,000 contracts are expected to be sold by them over the next week or so. Fund traders were net sellers of at least 10,000 corn, which would take them at or perhaps above 250,000 net short futures and options. South American weather “tweaking” likely stimulated much of the mid-day selling as well. Confidence appears to be increasing of a major rain event for Argentina looking out to the weekend. Some model runs suggest locally-heavy 3-5 inch totals over this timing. Brazil remains mostly favorable.  he verification of the rains will likely be the next “item of interest” for the markets after the USDA annual update is issued Friday.

Corn shipments picked up a little steam into the new year, with 849,226 MT reported shipped. This takes the total YTD shipments to 11.4 mmt vs. 17.9 mmt on the books this time last year.  When including outstanding sales from the other weekly report, US corn exports stand at 55% of the USDA sales goal versus the five year average for the date at 58%. There was a little export business around overnight and into the morning.

Grain analysts are forecasting Friday’s USDA quarterly grain stocks report to show as of December 1, 2017 Corn stockpiles at 12.43 BB, that compares to the 2.295 BB as of Sept 1, 2017 and the 12.386 BB in the year ago period. Grain analysts in survey are forecasting this Friday’s monthly USDA crop report to show final 2017 US corn production at 14.579 BB, that compares to the 14.578 MB recorded in the November report. 2017 yields are seen at 175.4 bpa unchanged from November’s report, while final harvested acres are expected at 83.10 mln down from 83.12 mln published in November’s report.

Better weather put pressure on the market today as soybeans trended lower along with the products. Export inspections today were 1.18 tonnes, within trade expectations. Grain analysts are forecasting Friday’s USDA quarterly grain stocks report to show as of December 1, 2017 Soybean stockpiles at 3.18 BB, that compares to the 0.301 BB as of Sept 1, 2017 and the 2.898 BB in the year ago period. Grain analysts in survey are forecasting this Friday’s monthly USDA crop report to show final 2017 US soybean production at 4.427 BB, that compares to the 4.425 MB recorded in the November report.  2017 yields are seen at 49.5 bpa unchanged from November’s report, while final harvested acres are expected at 89.50 mln up slightly from 89.47 mln published in November’s report.

Wheat finished the day lower across the complex, but not before a couple of rally attempts that briefly took trade higher. An early morning surprise from Morocco seemed to spark the run. There were 315 MT of US soft wheat licenses awarded as part of an annual preferential-tariff quota. They had been seeking as much as 363,636 mt. It was widely believed the EU was going to win the business, and may have been behind the rebound in Chicago. Looking ahead to tomorrow, the GASC announced after the close today they were in for wheat. Unless we see a drastic change from two weeks ago, results should not be very influential.

There will be a lot of data to absorb in Friday’s report, as it includes final corn and bean production, quarterly stocks for Dec 1, as well as an estimate of winter wheat acres. Reading more and more estimates that have total planted wheat acres coming in below last year’s 32.7 mil, and some estimates of possibly as low as 30 million. Look for HRW acres to be off around one million from last year to 22.4 million. Harvest acres will drop more as some of the Texas, Okla and SW Kansas acres were planted as forage for cattle. SRW acres are estimated around 5.5 million vs 5.735 million last year. Grain analysts are forecasting Friday’s USDA quarterly grain stocks report to show as of December 1, 2017 US Wheat stockpiles at 1.850 BB, that compares to the 2.25 BB as of Sept 1, 2017 and the 2.077 BB in the year ago period.

Anna Kaverman

anna@mercerlandmark.com

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