Friday Afternoon Comments (1/20) Corn futures finished the week in the green, trading higher for the sixth straight session. Futures notched a fresh 6 month high during the day but the March contract was unable to close above its 200 day moving average of $3.70. For the week, March futures gained 11 ¼ cents, while the December contract was 9 ½ cents higher. Weekly export sales came in above expectations this morning at 53.8 mln. bu. For the respective crop year to date, U.S. corn sales are up 70% from last year. In addition, the USDA announced the sale of 126,000 tons of U.S. corn to unknown destinations. This is the 9th flash sale of U.S. corn in 10 days. Corn demand remains strong. As of January 12th, cumulative export inspections for the 16/17 marketing year reached 33.3% of the USDA’s annual forecast. Yesterday’s weekly ethanol report showed another record week of production. Implied corn usage was more than 110 mln. bu. and well above the 99 mln. needed per week to meet the USDA's current marketing year target. This followed news that Mexico will import around 20% more corn in 2017, most of which will be from the U.S. Talk continues to pick up regarding the spring acreage mix. Farm Futures magazine surveyed farmers and pegged 2017 U.S. corn plantings at 90.5 mln. acres.
Soybean futures closed the day slightly lower on profit taking. Although, the nearby March contract finished the week 21 ¼ cents stronger than last Friday and the November contract was 10 ¼ cents firmer. A drier weather forecast for Argentina appears to have eased concerns somewhat over potential crop losses. The Buenos Aires Grain Exchange was out with updated estimates for Argentina, in which they lowered their bean production forecast from 54.4 MMT to 52.9 MMT. For reference, USDA is estimating their crop at 57 MMT. South American weather remains the major storyline in the beans, as the trade tries to determine crop sizes in Brazil and Argentina. Analysts are back and forth over just how much acreage has been affected by the weather in Argentina. Bears point to a dry 7-day forecast and it being early in the season, while bulls are focused on the potential for a 50 to 51 MMT crop. The forecast calls for dry weather in Argentina through the weekend with the potential for light to moderate rains early next week. Brazil is expected to see some spotty showers in the south, while decent rains are expected in the north over the next 5 days. Weekly U.S. soybean export sales were solid this morning at 35.9 mln. bu. For the respective crop year to date, the U.S. has sold 1.811 bln. bu. of beans, which is an increase of 23% from last year. Farm Futures magazine surveyed farmers and pegged 2017 U.S. soybean plantings at 90.5 mln. If correct, this would top last year’s soybean record by about 7 mln. acres. Also, if realized, it would represent the first time since 1983 that U.S. farmers plant more beans than corn.
Comments from Mid-Co Commodities
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