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MARKET COMMENTARY

Morning Comments January 17, 2017

Tuesday, January 17, 2017, 2:01 PM
Submitted by: Landus Cooperative


The markets were closed Monday in observance of Martin Luther King Jr. Day, so let’s just review what happened last Friday.

U.S. corn growers produced 15.1 billion bushels in 2016, up 11% from 2015.  Corn yield was up 6.2 bushels per acre and harvested area was up 7%.  March corn finished unchanged and Dec followed suit only picking up a ¼ of a cent for the week on the December and ¾ vs. the March.  Feed usage was trimmed and ethanol usage was increased by 25 million bushels with record-setting production.  In the U.S., there are some concerns that record-setting ethanol production could be creating a massive DDG pile up.  If we cannot export the overflow to China (tariffs) then DDGs could start competing with other feedstuffs, creating a glut and driving prices lower.  The dollar closed lower on Friday helping both corn and beans.  Argentina weather seems to be drawing some attention giving the overnight strength.  The problem is only 60-80% of the northern areas in Argentina are planted and they are running out of time and 2 major storms hit the wet regions over the weekend and extreme heat for the dry areas.  Corn is also drawing strength from beans.

Soybeans rose 6 cents (March) and November up 2 cents on Friday and for the week beans finished 51 ½ cents vs the March and 36 cents vs the November.  Beans were helped by USDA’s report that trimmed .4 bu per acre of the final yield and cutting acres by 300,000.  This trimming by the USDA and a new export for sale of 4.85 million bushels was supportive of bean futures.  But we need to remember that soybean production was still a record 4.31 billion bushels, up 10% from 2015, and total harvest area up 1%.  Exports and South American weather are going to be the leading story in beans for a few weeks.  Overnight trade is being pushed by Argentina weather concerns, strength in palm and crude, and the dollar down.

Opening calls

Corn: 3-4 higher

Soybeans: March up 14, November up 6

 

 



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