Blogging by the Bushel
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Market Report

Friday February 2nd, 2018

March 17 corn closed down ¼ at $3.61 ½ and July 18 closed down ½ at $3.77 ¼. March soybeans closed down 6 ¼ at $9.78 ¾ and July closed down 6 ¼ at $9.99 ¾. March wheat closed down 4 ¼ at $4.46 ¾ and July 18 closed down 4 ½ at $4.73 ½. Crude oil closed down $.52 at $65.03.

I am going to be out of the office February 5th-9th so there will be market commentary.

Highlights

· The US dollar index was higher today, up 0.510 points at 89.181.

· The DJIA was lower today, down 522 points to 26,663.

· The next USDA WASDE report is scheduled for Thursday, February 8th

Corn

The corn market closed slightly lower today pressured by improving weather in South America, while daily exports and good weekly export numbers provided underlying support. Traders expect the USDA supply and demand report Thursday to show a lower US corn carryout due to higher feed usage and higher ethanol production. Informa estimated the Argentine corn crop at 37 million metric tons, 5 million tonnes lower than previously estimated, and the Brazilian corn crop at 88 million metric tons. Currently the USDA has Argentina’s corn crop at 42 mmt and Brazil at 95 mmt. The March corn contract sees resistance at $3.62 ½ and $3.65 ¼, with support at $3.57 ¼ -$3.54 ¾. Private exporters reported to the USDA export sales of 195,000 metric tons of corn to unknown destinations for the 2017-2018 marketing year. Exporters also sold 170,000 metric tons of corn to Egypt for the 2017-2018 marketing year. In general, corn and soybean basis at interior processors and end users in the US Midwest were flat today as farmer sales are slow after active farmer selling took place in the first half of the week

Oilseeds

The soybean market traded lower today on technical selling and rain forecasts for South America over the weekend and again at the end of next week. On Thursday traders expect a higher bean carry out, because of lower export numbers, an increase in Brazilian production and a decrease in Argentine production, to be reported by the USDA. March soybeans sees support at 9.76 ¾, with resistance at the $10.00 mark once again.  Private exporters sold 108,860 metric tons of soybeans to Mexico for delivery in the 2017-2018 marketing year. Weather in Argentina is expected to be hot and dry for the 1-5 day forecast, but trending wetter in the 6-10 day forecast and the 16-30 day forecast as well. Brazil is looking the opposite with the nearby forecasts wetter and 16-30 day deferred forecasts looking drier. Informa pegged the Argentine soybean crop at 51 million metric tons, 3.5 million tonnes less than the last estimate, and the Brazilian soybean crop at 112.5 million metric tons. USDA currently has Argentine soybean production at 56 million tonnes and Brazilian production at 110 million tonnes.

Wheat

Wheat markets traded lower today as snow is expected to fall in some soft winter wheat areas, providing snow cover to protect the crop as well as moisture. Dryness in hard red winter wheat country gave support to the Kansas City market. In the USDA report Thursday, traders expect US wheat acres to be lower, mainly due to lower hard red winter wheat acres, and higher Canadian and Argentinian production. Russian wheat exports, for the 2017-2018 marketing year, are poised to increase again, aided by warm weather and very few storms to disrupt logistics. Previous estimates pegged the maximum export activity for Russia at 45 million metric tons of wheat, but now analysts have said they expect it to be more than that, with many predicting around 47 mmt, but some saying it could be as much as 50 mmt. Year to date Russia has exported 29.8 mmt of wheat, up 35% from last year at this time. Chicago wheat sees resistance at $4.51 ¾ and $4.58 ¾, with support at $4.42 ½ and $4.32 ¾. Egypt’s state grain buyer, GASC, bought 180,000 metric tons of wheat from Russia in their tender today. Trade expectations for All Wheat Stocks in the SatsCan December 31, 2017 Grain Stocks report on Monday are 23.9 million metric tons of wheat, compared to 24.095 on December 31, 2016. Informa pegged hard red winter wheat acres planted at 23 million, with 17.6 million harvested, 39.1 bushels per acre, and 687 million bushels of production. They estimate soft red winter wheat planting at 5.98 million acres, 4.858 million acres harvested, 66.3 bushels per acre and production at 322 million bushels.

Anna Kaverman

anna@mercerlandmark.com

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