Morning Comments March 2, 2017
Thursday, March 2, 2017, 8:03 AM
Submitted by: Landus Cooperative
We’re starting off the morning with corn 1 to 2 cents lower and beans 6 to 7 cents lower.
Healthy ethanol production supported the corn market yesterday as many in the trade expected it to fall off in this week’s reported numbers. The main headline is still changes in the RFS, which seems to come down to two issues: whether responsibilities shift from refiners to blenders and whether E15 will be sold year round. The problem at this point is that’s all rumors, nothing has been confirmed by the administration or officials. Keep in mind - the rate of production and stocks on hand already look to exceed the 2017 volume requirements. Any changes in required volumes will also take time to implement.
Weekly export corn sales for last week are slightly below expectations but still well above what is needed to meet the USDA’s estimates. Soybeans are within the trades estimates and also well above what’s needed weekly to meet USDA’s estimates. Demand is expected to switch to South America after their corn crop becomes available. Additionally, USDA is expected to slightly raise their estimate of the size of the South American crop in next week’s report. A caveat to South American sales it he strength of the Brazilian Real – this makes the Brazilian producer a reluctant seller (see chart below). The main highway that goes to the ports of Moto Grosso is flooding and making travel very difficult. Yesterday there was a wire reporting that 3,000 trucks were stuck on the highway full of beans.
Fund buying generally comes in waves of three and this will be the third day. Traders will be watching for any sign that buying has been exhausted or if they should continue buying.
Tomorrow, Friday, March 3rd, is the deadline for signing up for our “Averaging Contract”. If you have been thinking about signing up, please contact your Grain Marketing Advisor!
Have a great day!
This is a weekly chart of the Brazilian Real. Ever since the beginning of 2016, the currency has steadily rallied. Most attribute the rally to less government corruption and more “responsible” monetary policy.