News Source: SETZ

Market Update; Wednesday, March 20th, 2019

Trade started the day session mixed with grains on the positive side and soybeans under pressure. Much of the talk in the market remains on Midwest flooding and what it may mean for planting conditions. While many areas will be impacted by this, others are still on course for a normal planting window. Interesting to see forecasters projecting a 70% chance of an El Nino event this growing season which is associated with better than trends in the United States. High yields will be needed if any acreage loss takes place this year, especially for corn.

Corn futures are reacting to the flooding more than other commodities as that grain cannot afford any acreage loss this year. Some analysts have started to reduce their planting forecasts for corn at a time when stocks were already shrinking. Improving ethanol margins are also supporting corn futures. Corn advances are being held in check by larger crop estimates for Ukraine and data showing yearly US exports are on pact to fall 300 million bu behind expectations. The European Union has increased its corn import forecast by 40% for this year though, which will help with this slow loading pace.

Soybeans are struggling today with negative news out of Brazil. Brazilian officials have adjusted their production figures for last year, and increased the size of the crop by just over 2 million metric tons. This went directly to ending stocks, which easily buffers the crop loss Brazil has seen this year. Bottom line is that global soybean inventory went up in the past 24 hours, not down. Field scouts claim soybean acres in the Delta and southern US will be up from 500,000 to 750,000due to delays to corn planting. Soybeans are being further pressured by numbers showing a 460 million bu shortfall in exports at the current loading pace.

Wheat futures have shown some strength this morning as we see light short covering in that market. This is mostly technical but also from the fact US wheat is very competitive in the global market. Advances in wheat are being held in check by the large global crop that is being grown and lack of actual sales. Russia has slowed their sales pace though, which should start to benefit the US. At today’s pace, yearly wheat sales out of the US will fall 305 million bu short of expectations.

This commentary is the sole opinion of Karl Setzer. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to contact Karl Setzer at 800.858.3738, extension 411, or at ksetzer@citizenselevator.com . You can also follow Karl on twitter; @ksetzergrains

Market Update; Tuesday, March 19th, 2019

Corn, soybeans, and wheat all firmed in the overnight session as fund selling eased. Funds already have record sized short positions which means we will need to see something significantly bearish to drive the market down from where its at. While technicals are supportive for the market, fundamentally, there is little beneficial news at this time. Market bulls keep trying to build on the flooding and wet weather in the Midwest, but trade already has this factored into futures. What may be more concerning is the logistic issues that are hampering demand, including ethanol plants going off-line until floods recede. Trade is also concerned with the lack of trade progress between the US and global buyers, including China, where talks are not expected to resume until this summer.

Seasonally, corn futures are currently over-sold. This is typically a time of the year when corn futures start to benefit from the addition of risk premium ahead of the planting season. We have yet to see this take place as trade is more focused on global corn inventory that is growing with the start of the Argentine harvest. The US has also missed out on sales recently, which means futures need to remain depressed to entice buying. We are starting to hear more concern voiced over the state of farm stored inventory and how quality may start to suffer, especially in flooded regions of the Corn Belt.

Soybeans have been under steady pressure as import buyers are not interested in US offerings at this time. The Brazilian harvest is 2/3 complete and yields continue to run as expected. There are some concerns that harvest may be strung out due to rains, but nothing that would cause further production loss. Officials in Brazil have lowered soybean export forecasts by 14 million metric tons though, which is positive for US sales. This is being negated by the likelihood of additional US soybean acres given the current weather conditions in the US and potential delays to corn planting.

Wheat really has little to build on today other than the fact it is heavily over-sold. We have seen demand perk up for wheat in the global market, mainly for feed into South Korea. To that, Mexico and Brazil were listed as destinations for 12 million bu of US wheat in yesterday’s loading report. Total export shipments were on the light side though, which is tempering the complex. Wheat traders are keeping a close eye on the condition of the US wheat crop to see if weather has caused losses there as well.

This commentary is the sole opinion of Karl Setzer. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to contact Karl Setzer at 800.858.3738, extension 411, or at ksetzer@citizenselevator.com . You can also follow Karl on twitter; @ksetzergrains

Market Update; Monday, March 18th, 2019

Trade has started the week under pressure, with the greatest losses being posted in soybeans and wheat. Commodities are being pressured by a weaker dollar and growing concerns over global trade. The latest on the US/Chinese talks is that nothing will take place between the two until June. Added to this are reports the US is considering tariffs on the EU. Trade is also focusing on weather this morning and the floods in the Midwest. Not only are these disrupting spring planting conditions and outlooks, but also transit and manufacturing. Focus in the market is starting to shift to the quarterly stocks and planting intentions reports that will be released at the end of the month.

While under pressure, corn is actually the stronger of the contracts this morning. Analysts are projecting fewer planted acres this year than what the USDA did in the February Outlook Forum, which is helping to put a floor under that grain. The ongoing delays to the start of the corn planting season is behind this. Funds are already holding a record sized short position in corn of 258,000 contacts which is limiting fresh selling interest in the contract.

Soybeans have been under moderate pressure today with light selling in the complex. Thoughts we will see more plantings than initially expected this year are weighing on that market. Demand, or the lack thereof, is becoming more of an issue for the soy complex. Export sales on soybeans are on track to miss USDA projections by 300 million bu. Even if we see China continue to buy at its current pace we will likely miss the target by 200 million bu. As with corn funds are already holding a sizable short position of 90,000 contracts which is limiting heavy selling from taking place.

Wheat futures are starting to show some strength from where they started this morning. Wheat really does not have any fresh news to work with this morning, which is limiting both buying and selling. The condition of the US crop is improving, which is capping any attempt at a rally this morning. We are seeing several tenders on wheat though, which is preventing losses. As with corn and soybeans, a sizable fund short position of 72,000 contracts is providing this morning’s support.

This commentary is the sole opinion of Karl Setzer. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to contact Karl Setzer at 800.858.3738, extension 411, or at ksetzer@citizenselevator.com . You can also follow Karl on twitter; @ksetzergrains

Weekly Market Review; Friday, March 15th, 2019

Weather Outlooks Start to Gain Interest

Spring weather outlooks in the United States are getting more attention. There are concerns over the flooding that has been caused be the rapid melting of the snow cover in the Midwest. Not only could this impact planting, but also for transportation. High water levels can easily halt barge movement, causing low inventories at the gulf. This could easily cause buyers to look elsewhere for commodity needs.

As always, we are starting to hear debate on what impact delayed plantings may have on production, mainly corn. History shows that as long as corn is seeded by the end of May there is little confirmed yield loss. This is also the same stage of the planting season where any acreage shift tends to take place. This said, we will still start to see risk premium added to commodity futures if wet, cold conditions linger in the Corn Belt.

While planting can impact yields, summer growing conditions are just as important, if not more of a factor. We are starting to see indicators lean towards an El Nino system setting up this year, which tends to bring favorable growing conditions to the US. This could easily negate any less than perfect planting conditions.

Another talked about weather topic in the market right now is in South America. Soybean harvest in Brazil has progressed rapidly this year, which tends to bring elevated Safrinha acres. This is especially the case in a year such as this where weather has turned near perfect in the country. It is not out of the question we could see larger crop estimates out of Brazil as a result of these weather improvements.

The real focus in South America right now is on Argentine weather. Conditions have been drier than liked in Argentina and may have shaved bushels off yields. While this is possible, trade may wish to wait for confirmation before altering yields.

Trade continues to sort through the latest supply and demand data in an effort to find a spark to ignite a market rally. So far, this simply is not happening. Very few changes were made to corn and soybean balance sheets, either domestically or globally. We did see a reduction to world wheat production, but a cut in demand was even greater. Trade is now starting to focus more attention on new crop production, which may be where a market rally comes from.

When it comes to new crop production, the most attention is on acres. Trade keeps talking about a 2 to 3 million acre increase to corn production, but current economics simply do not support this theory. Most scenarios indicate unchanged corn and soybean acres, and a few are pointing to elevated soybean production. The next chance of receiving some type of an answer to this will come in the March 29th prospective plantings report.

We will also receive the quarterly inventory report on March 29th, which may have more of an impact on commodity futures. This is from the fact these numbers are known, not estimates as the acreage will be. Trade is expecting to see more soybeans and wheat in storage facilities this year and less corn than a year ago. Stocks on this date tend to be heavily watched as demand for US offerings tends to fade from this point forward, especially on corn.

The commodity that is suffering the most right now is wheat. Global wheat production forecasts have declined in recent weeks, but demand has dropped even further. One good point of this is that wheat is now at a considerable discount to corn in the global market. As a result, wheat has started to be substituted into traditional corn uses. One of these is feeding in the Black Sea market. While this seems positive, it is doubtful enough demand will shift to greatly affect balance sheets for either wheat or corn.

We continue to hear almost daily reports on trade talks between the US and China. These range from having a new trade deal nearly completed to thoughts the whole deal may be scrapped. The real question is what trade talks have already done to the markets. Many commodity importers have already shifted their buying interest away from the US in recent weeks. This is from the impact that even the few purchases China has made has had on basis values. Many buyers can now source needs from South America cheaper than from the US. As a result, there is a chance that even if China does resume its buying, total sales could drop.

Another factor that involves China is the African Swine Fever outbreak. A large volume of hogs have been culled because of this, which will undoubtedly impact China’s feed grain demand. Hog values in China have rallied 14% in recent weeks from this, which means feeders will not sit idle very long. The concern is that the disease is not under control, and more losses will take place.

The global economy is starting to have more of an influence on the commodity market. There are signs of a slowing economy in many regions, with the most attention on China. A slowing Chinese economy tends to bring about less commodity demand. This is obviously more of a concern for soybeans, as China is the world’s largest importer of that commodity.

This commentary is the sole opinion of Karl Setzer. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to contact Karl Setzer at 800.858.3738, extension 411, or at ksetzer@citizenselevator.com . You can also follow Karl on twitter; @ksetzergrains

Market Update; Friday, March 15th, 2019

Trade started the last day of the week on the positive side with soybeans leading the charge. Simple end of the week short covering is the primary source of this strength, but we are also seeing some concern over the availability of soybeans in the global market. While the actual soybean volume is more than adequate, we are seeing very few soybeans move into the supply line. This from global transit issues more than anything, but a hesitation to make sales at today’s values is also a factor. Advances are being capped by the breakdown in talks between the US and China that will be delayed until late April according to government sources.

Corn values are firm today which is good news given the lack of fresh news the complex has to work with. The US is missing out on corn sales given the current spread between our offerings and those from our competitors in the global market. Corn is being further pressured by news some buyers in the global market are tendering for feed wheat over corn at the present time. The growing possibility for at least some acres to shift from corn to alternative crops this spring is also supporting the complex this morning.

Soybeans are the well-defined leader so far today, but are having a hard time holding early advances. Early strength came from short covering, but a lack of follow through buying has tempered advances. The lack of trade issues being resolved between the US and China is also limiting soybean strength. There is also talk in the market that spring wheat acres may shift to soybeans this year, further pressuring the complex.

The wheat market is showing some strength from the same short covering the other commodities are benefitting from, but also from elevated demand. We continue to see tenders flow through which is showing us a solid build in demand. Global feeders have tendered for wheat over corn given the current price spread, which is giving the complex support. Advances are being held in check by the ample global wheat supply though, as Germany now claims wheat production this year will be up 19.4% from last year.

This commentary is the sole opinion of Karl Setzer. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to contact Karl Setzer at 800.858.3738, extension 411, or at ksetzer@citizenselevator.com . You can also follow Karl on twitter; @ksetzergrains

Weekly Review; Friday, March 8th, 2019

March WASDE Report Holds Few Surprises

Very few changes were made to balance sheets in the March supply and demand report. The USDA now pegs US carryout at 1.84 billion bu for corn, 900 million bu on soybeans, and 1.055 billion bu on wheat. None of these were out of line with trade expectations. Global ending stocks were estimated at 309 million metric tons on corn, 106 mmt on soybeans, and 271 mmt on wheat. The global wheat number was the only one outside of trade estimates as it was 1 mmt higher than expected.

Commodity values have struggled recently with a lack of fresh news. What news there has been really has not offered much in the way of support, either. This has allowed commodity values to drift sideways, which is not uncommon at this stage of the marketing year. Hence the term, “Winter Doldrums.”

As it has been for several weeks, trade relations between the United States and China continues to dominate trade. Recently we have heard the announcement that China and the United States were nearing a finalization of the details that would again allow free trade between the two countries. China has even stepped in and booked soybeans from the US. At first this alleviated market pressure and allowed market values to rally, mainly soybeans.

Cooler heads have now prevailed with this trade dispute, and buying interest has faded. While China did book 10 million metric tons of soybeans initially, since then sales have been non-existent. Trade is now becoming worried that the immediate sales were little more than a good faith measure, and additional demand will be sparse. This is not hard to believe, and in fact, is quite likely. This is especially the case with China being offered cheaper soybeans out of South America.

One source of support for US soybean sales is the strained relations between China and Canada. Chinese officials reportedly found “hazardous pests” in canola vessels from Canada which caused them to be rejected. China has since suspended Canola imports from Canada. The real reason for this action by China is more likely in retaliation for the political issues that have arisen between the US and China in regards to trade disputes.

While it seems like a stretch, the suspension of canola imports could lead to a quicker resolution to the Chinese/US dispute.

Soybeans have taken some support from transit issues in Brazil. The much talked about BR-163 highway in Brazil has flooded, causing muddy conditions that are preventing truck movement. In recent years much of this road has been paved, with very little left that is dirt. The initial reaction to this story was that it would bring buyers to the US, but it now appears as though any disruption to Brazilian exports will be minimal.

Another story in the market recently has been US acreage intentions. The USDA is expecting US farmers to seed roughly 92 million corn and 85 million soybean acres this year. These numbers are being heavily contested, especially given recent weather conditions.

Heavy rains and flooding have taken place in the US Delta and Deep South recently. Corn planting has all but concluded in Texas, but there are now concerns that fields will need to be replanted. Rains have also prevented fields from being seeded in other regions.

A greater concern is the weather in the Corn Belt. Heavy snowpack and cold temperatures have combined to prevent any early fieldwork from taking place. This is on top of the limited fieldwork that was done last fall. Given these conditions it is not only likely we will see delayed plantings this spring, but it is also possible we will not see higher corn plantings take place. Add to this a new crop price ratio of roughly 2.4:1, which means it takes 2.4 bushels of corn to equal the value of 1 bushel of soybeans, and higher corn plantings become less of a reality.

The ongoing winter conditions have been beneficial to the interior cash market however. Producers across the Midwest currently could not move very much inventory even if they wanted to. Add in less than stellar prices and the incentive to make sales is even lower. As a result, many processors have been forced to pay significant premiums for deliveries. In some instances, this has the interior cash market at levels that are higher than the rail and export market.

This commentary is the sole opinion of Karl Setzer. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to contact Karl Setzer at 800.858.3738, extension 411, or at ksetzer@citizenselevator.com

Closing Comments; Wednesday, March 6th, 2019

Grain markets drifted lower throughout today’s session, as the search for fresh news and market developments has remained thin. Markets seem to lack vigor as the cat and mouse game of conflicting reports on trade deal progress continues to provide a directionless environment. Market participants are hoping that Friday’s report will give a better idea of supply and demand fundamentals.

For the week ending March 1st, total ethanol production totaled 1.024 million bushels which came right within the range of estimates compared to last week’s 1.028 million barrels. The Midwest production rate saw a decrease of 12 thousand barrels to 952 thousand barrels. Total ethanol stocks saw a large increase of 552 thousand barrels to 24.26 million barrels that was outside the range of estimates. This was compared to last week’s total ethanol stocks of 23.70 million barrels. Notable strength in corn basis has not helped the ethanol margin structure, as plants continue to grind with hopes of a turnaround. The past week’s board action has halted a good portion of farmer selling.

May corn closed 3 cents lower $3.72 . May soybeans finished 11 cents lower at $9.02. May Chicago wheat closed 13 cents lower at $4.49 .

For more information, you may contact Brock Beadle at 515-341-7040, or e-mail at bbeadle@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Brock Beadle. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.

Morning Comments; Wednesday, March 3rd, 2019

The seven-day forecast for the southeast and delta region is expected to see a decent amount of measurable precipitation moving forward. According to the National weather service, the lower Mississippi river is already seeing significant flooding, and will see extended levels of high water as we move towards warmer temperatures in the Midwest. The extended forecast shows a slight warm-up, but less than optimal temperatures conducive to fieldwork beginning down south.

There are thoughts that we could see a large increase in soybean acres as wet spring is being predicted. A large increase in bean acres does seem attainable considering the amount of field work last fall that did not happen due to an early freeze. Acres that did not get fall fertilizer applied, will be forced to make tough economic decisions based on rotation and nitrogen costs with respect to the forward prices of each crop.

Market Movers: Money Flow, Technical indicators

For more information, you may contact Brock Beadle at 515-341-7040, or e-mail at bbeadle@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Brock Beadle. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.

Morning Comments; Monday, March 4th, 2019

Grains are trading mixed on the overnight session.

Contract lows had grains on edge on Friday, but both corn and soybeans bounced back at the end of the session. Speculative buying spurred the comeback following friendly numbers from the National Ag Statistics Service on January soybean crush at 182.9 million bushels. This put crush 6.5 million higher than a year ago and now 47 million bushels ahead of the USDA forecast. Bulging soybean stocks at wide basis levels are promoting higher crush rates despite lower crush margins than last year. Soybean meal exports continue to remain strong and soybean oil usage has increased from stronger U.S. biodiesel consumption.

U.S./China trade negotiations rumored to be making some headway. The U.S. has delayed the increase from 10% to 25% tariff rates on Friday, as it was considered no longer necessary as talks are progressing. President Trump has asked China to remove all tariffs on U.S. agricultural products. The U.S. has also asked China to remove tariffs on U.S. ethanol to help spur imports into China.

U.S. Secretary of Agriculture Perdue announced Friday that the EPA has confirmed they can implement the new E15 policy by June 1st, in time for summer gasoline blends to included E15. Secretary Perdue has asked the EPA to push the marketplace to be ready by June 1st for E15 blends.

Market Movers: Chinese trade negotiations, acreage debate and export business.

For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at asuntken@maxyieldcooperative.com. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

Closing Comments: Friday, March1, 2019

Corn and soybeans drifted lower early today, but bounced back by the close. Cheaper South American corn along with beneficial weather for soybeans and the second corn crop in Brazil have kept the pressure on.

The US and China trade talks have turned to poultry. The US would like to ship chicken wings, legs, thighs, and paws to China, and China would like to sell chicken breasts to the US. But, China must first remove restrictions from 2015 when the US had an Avian Flu outbreak.

Corn commitments for export are .7% larger than this time last year. As of February 21, they were 64% of the USDA’s export projection, with the 5 year average at 71% for that date. Soybean commitments for export are now 14.5% below a year ago, catching up with larger sales. The USDA is projecting a 12% drop for the full year, with the commitments 76% of that estimate vs. the 89% average.

May corn closed 2 cents higher at $3.73, May soybeans closed 1 cents higher at $9.11 , and March wheat closed 1 cents higher at $4.54.

Weekly Review; Friday, March 1st, 2019

Competition Seen in Export Markets

Corn balance sheets look to tighten using trend line yield and demand assumptions released by the USDA at the Ag Outlook Conference. Some of the lack of enthusiasm is that the USDA fell short of final yield by over 4 bushels per acre each of the past five years. Since 2004, the USDA forecasted yield has fallen short of the final number 60% of the time. Weather always remains the wild card for yield and that can vary greatly over the next 11 months until the final production number is released in January.

Ethanol manufacturing data released this week showed a large increase in production from last week. Production for the week, ending February 22nd, showed an increase of 33,000 barrels per day from the previous week of 1.028 million barrels per day. Even with the increase in production, stocks dropped by 204,000 barrels and now stands at 23.71 million barrels. Margins have increased in recent weeks putting most plant margins back in positive territory.

Export sales week ending February 21st, were at or above the high end of trades expected range for corn, soybeans and wheat. Corn sales tallied 48.8 million bushels, slightly above the high end of the expected range. Soybean sales totaled 80.7 million bushels, over twice the volume expected, with 66 million bushels being sold to China. Wheat sales totaled 17.5 million bushels.

Questions are starting to arise about corn demand as exports had been robust earlier in the marketing year but are now starting to fade. Last week’s catch-up sales report showed 238 million bushels sold during the government shutdown. The total was in line with expectations but was well below last year’s total for the same timeframe of 411 million bushels. Corn exports are now a meager 30 million bushels ahead of a year ago.

The U.S soybean export program is a bit muddled as one looks at the numbers after the USDA played catch up with weekly sales reports following the government shutdown. Some of the recent Chinese purchases were reported as less than previously announced. At a minimum, exports are lagging close to 300 million bushels. If the latest Chinese sale announcement of 10 MMT US soybeans occurs, it could help get the balance sheet closer to being accurate. Nevertheless, the fact still remains that the US has the largest soybean carryout in history at over 900 million bushels.

This week’s export sales showed large Chinese soybean purchases hitting the books. Uncertainty remains with these sales as offerings from Brazil are well below those of the US. China has purchased US soybeans in good faith from on-going trade discussions. Reports that discussions are positive continue. However, lack of a confirmed deal makes the sales very vulnerable. China has been notorious for cancelling sales. In this instance, it makes more economic sense for them to source soybeans from South America.

U.S. trade negotiators have asked China to reduce tariffs on U.S. ethanol as part of the latest round of trade talks. According to Reuters, Ag Secretary Purdue, mentioned he would like to see tariff levels below 15 percent, but he did not mention what exact level trade officials were looking for. China’s current tariff on U.S. ethanol tallies up to 70 percent, which has effectively stopped any ethanol exports into China.

U.S. Trade Representative Robert Lighthizer, discussed how the trade talks with China were going with the House Ways and Means committee this week. He stated President Trump is committed to protecting the American workers, farmers, ranchers, and economic system from the unfair trade practices of China. While he also stated that progress has been made with China, but it is too early to predict the outcome of the negotiations. One of the biggest areas being addressed during negotiations has been the non-tariff trade barriers. Lighthizer is hopeful they made some headway. President Trump is insistent on an agreement that is enforceable and would also like to see changes in the pattern of practice in several areas. Optimism still surrounds the idea that an agreement will be reached, but it will take time and will consist of multiple agreements as they work through pressing issues.

A recent poll of analysts shows that expectations for Brazil’s Safrinha corn crop will see a large increase of 21% over last year’s crop at 65.3 MMT. Acreage is said to be at 12 million hectares, which is 4% higher than last year. The soybean survey for Brazil showed a drop in production from last year’s record crop of 119.3 MMT. The average results were for 114.6 MMT, which is also below the previous estimates and the USDA’s latest 117 MMT forecast.

African swine fever continues to spread throughout China and was confirmed in Vietnam earlier this month. The highly contagious disease was confirmed in two more provinces near the border shared with China. In Vietnam, pork accounts for three quarters of the total meat consumed in the country, leading officials to try to find ways to keep the disease from spreading.

Corn, soybean and wheat futures saw significant pressure the month of February. The spot March corn contract fell 16 cents, while the new crop December contract lost 10 cents. March soybeans finished the month with a loss of 20 cents and November soybeans lost 13 cents. Wheat values fared the worst losing 71 cents on the March contract. Winter weather pushed nearby basis values in, but not enough to compensate for the losses.

For more information, you may contact Mick Hoover at (515)-200-5115, or e-mail at mhoover@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Mick Hoover. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

Morning Comments; Friday, March 1st, 2019

Corn and soybeans are trading higher this morning.

A recent poll of analysts shows that expectations for Brazil’s Safrinha corn crop are to see a large increase of 21% over last year’s crop at 65.3 MMT. Acreage is said to be at 12 million hectares, which is 4% higher than last year. The soybean survey for Brazil showed a drop in production from last year’s record crop of 119.3 MMT. The average results were for 114.6 MMT, which is also below the previous estimates and the USDA’s latest 117 MMT forecast.

Acreage debates continue, the USDA added more fuel when they released their figures at the Ag Outlook Forum last week. For corn, they estimate that producers will plant 92 million acres to corn, up 2.5 million from last year. Soybean acres were listed at 85 million, down over 3 million from last year. Wheat acres were nearly unchanged at 47 million. Many believe the corn and soybean acre switch seems lofty given current market economics, given these forecasts are not survey based leaves some to question their accuracy.

Yesterday’s export sales showed large Chinese soybean purchases hit the books. Uncertainty remains with these sales as offerings from Brazil are well below those of the US. China has purchased US soybeans in good faith from on-going trade discussions. Reports that discussions are positive continue, but the lack of a confirmed deal makes these sales very vulnerable. China has been notorious for cancelling sales, and in this instance it makes more economic sense for them to source soybeans from South America.

Market Movers; Technical indicators, trade developments and fund positioning.

Closing Comments; Thursday, February 28th, 2019

There was a lot of red was seen across the ag sector in today’s session despite favorable export sales figures. Soybeans and wheat lead the decline but corn followed. Ample and timely rains seen benefitting Brazil’s Safrinha crop, coupled with a technical breakdown pressured corn. Soybeans followed the path of least resistance as no new trade developments have been reported.

Export sales released this morning for the week ending February 21st were at or above the high end of trades expected range for corn, soybeans and wheat. Corn sales tallied 48.8 million bushels, slightly above the high end of the expected range. Soybean sales totaled 80.7 million bushels, over twice the volume expected, with 66 million bushels being sold to China. Wheat sales totaled 17.5 million bushels.

Corn, soybean and wheat futures saw significant pressure the month of February. The spot March corn contract fell 16 cents, while the new crop December contract lost 10 cents. March soybeans finished the month with a loss of 20 cents and November soybeans lost 13 cents. Wheat values fared the worst losing 71 cents on the March contract.

March corn closed 1 cents lower today at $3.62, March soybeans fell 6 cents to close at $8.97 , March Chicago wheat dropped 8 cents at $4.52 .

Morning Comments; Thursday, February 28th, 2019

Corn and soybeans are mixed on the overnight session.

Traders are beginning to question corn demand as exports had been robust earlier in the marketing year, but are now starting to fade. Last week’s catch-up sales report showed 238 million bushels sold during the government shutdown. The total was in line with expectations, but well below last year’s total for the same timeframe of 411 million bushels. Corn exports are now a meager 30 million bushels ahead of a year ago. Cumulative shipments have remained 300 million ahead of pace since mid-December.

US Secretary of Agriculture, Sonny Perdue confirmed the 10 MMT sale announcement from China last week is to be old-crop soybeans. If all deliveries go as promised, this is said to bring the export total 1.96 billion bushels, up from 1.875 billion from USDA’s latest estimate. If realized, this will bring domestic carryout down to 850 million bushels. Using the 2019/2020 data from the Ag Outlook conference, even with this decrease in carryout, ending stocks next year are expected to climb above 1 billion bushels.

Ethanol manufacturing data released yesterday showed an increase in production from recent weeks. Production for the week ending February 22nd showed an increase of 33,000 barrels per day from the previous week to 1.028 million barrels per day. Even with the increase in production, stocks dropped by 204,000 barrels and now stand at 23.71 million barrels. Margins have increased in recent weeks putting most plant margins back in positive territory.

Market Movers; Export sales data, month end positioning and trade news.

Closing Comments; Wednesday, February 27th, 2019

Electronic trading halted late Tuesday night due to a technical error at CME Group Inc, the world’s largest exchange operator. Trade halted around 6:40 pm Central Time and lasted for about three hours, preventing any trading of contracts involving U.S. Treasuries, stock-futures and commodities. Millions of contracts that track the S&P 500, Dow Jones Industrial Average and Nasdaq 100, that trade almost continuously throughout the day, were halted due to the error.

U.S Trade Representative Robert Lighthizer discussed how the trade talks with China were going with the House Ways and Means committee this morning. He stated President Trump is committed to protecting the American workers, farmers and ranchers, and economic system from the unfair trade practices of China. While also stating that progress has been made with China but it is too early to predict the outcome of the negotiations. One of the biggest areas being addressed during negotiations are the non-tariff trade barriers, Lighthizer is hopeful they made some headway. President Trump is insistent on an agreement that is enforceable, while also seeing changes in the pattern of practice in several areas. Optimism still surrounds the idea that an agreement will be reached but it will take time and consist of multiple agreements as they work through pressing issues.

March Corn closed down 2 cents at $3.63 . March Soybeans closed down cent at $9.03 . March Chicago Wheat was up cent at $4.61.

For more information, you may contact Kristi Guse at (712)-260-6486, or e-mail at kguse@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Kristi Guse. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

Morning Comments; Wednesday. February 27th, 2019

Corn and soybeans are steady on the overnight trade.

African swine fever continues to spread throughout China and was confirmed in Vietnam earlier this month. The highly contagious disease was confirmed in two more provinces near the border shared with China. The virus is spreading to locations around the capital city, which will host the second summit between President Trump and North Korean leader Kim Jong Un later this week. In Vietnam, pork accounts for three quarters of the total meat consumed in the country, leading officials to try to find ways to keep the disease from spreading.

The weather forecasts in Brazil has been good for crops and improved chances of rain in parts of Argentina are possible. The USDA’s projections for Brazil’s soybean crop are at 115.5 MMT, compared to 120.3 MMT last year. This is due to the hot, dry weather that occurred during the key growing season timeframes. Analysts are starting to watch the weather forecasts in South America concerning the corn crop, due to the possible record production and increased potential for export competition.

Market Movers: Trade negotiations with China, exports and technical selling

For more information, you may contact Kristi Guse at (712)-260-6486, or e-mail at kguse@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Kristi Guse. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

Closing Comments; Tuesday, February 26th, 2019

Today’s grain trade was solidly in the red as the feel good headlines have taken the back seat to fundamental realities in front of us. It seems as if this market needs its daily stimulus of market headlines where a deal is within reach or a certain amount of progress is being made. The overused term, “trade uncertainty”, is still a marketable risk for much of the unpriced farm stored commodities. Producers should be working with their trusted advisors while looking at these potential risks as cash flow needs are quickly approaching.

US trade negotiators have asked China to reduce tariffs on U.S. ethanol as part of the latest round of trade talks. According to Reuters, Ag Secretary Purdue mentioned to that tariff levels below 15 percent, but did not mention what exact level trade officials were looking for. China’s current tariff on U.S. ethanol tallies up to 70 percent, which has effectively stopped any ethanol exports into China for the time being.

March corn finished 4 cents lower at $3.66 . March soybeans closed 8 cents lower at $9.03 . March Chicago wheat closed 6 cents lower at $4.60 .

For more information, you may contact Brock Beadle at 515-341-7040, or e-mail at bbeadle@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Brock Beadle. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.

Morning Comments; Tuesday, February 26th, 2019

Grains are trading lower on the overnight session.

The buzz of the fresh Chinese soybean purchase wore off quickly Monday, as grains could not hold on to overnight gains. Corn struggles to find fresh news as it has been range bound for weeks. Corn consumption for ethanol declined in January by 16 million bushels versus the same time a year ago. For the marketing year, ethanol grind is down about 3%. This could reduce corn for ethanol usage by 125 million. If corn exports continue to weaken as they have in recent weeks during the 3rd quarter of the marketing year, ethanol and exports could potentially add to what was a tightening carryout that supported higher corn values.

Soybeans were not able to sustain the rally from Friday’s announcement of China’s commitment to buy another 10 million metric tons of soybeans. China has purchased 75% of the initial 10 million metric tons they have agreed to purchase since trade negotiations started. However, only 2 million metric tons have shipped. As the calendar gets closer to March, cheaper South American soybean stocks will grow in ports becoming available to Chinese importers. Friday’s announcement of more purchases may not ship until new crop having very little effect on old crop carryout.

Market Movers: Chinese trade negotiations, acreage debate and export business.

For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at asuntken@maxyieldcooperative.com. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

Closing Comments; Monday, February 25th, 2019

Today’s grain trade was on both sides as the weekend’s feel good story from the Oval Office supported soybean futures throughout the night trade, and into the morning. Last Friday after market close, Secretary of Agriculture tweeted that China was making another good faith deposit with a purchase of another 10 million metric tons of soybeans. China’s stock market believes there to be significant progress as their stock market was up 5.6%. This would mark the largest daily increase going back to July of 2015.

This weekend’s blizzard conditions has put everything to a grinding halt. County departments have been quoted saying this is the worst storm they have ever seen in some instances. Snowfall amounts ranging 12-18 inches were not uncommon as most major highways and interstates were closed down. Emergency crews have been working since the early morning to get roads cleared while tow trucks have been busy pulling stranded vehicles.

March Corn closed 4 cents lower at $3.70 . March soybeans finished cents lower at $9.10 . March Chicago wheat closed 20 cents lower at $4.66 .

For more information, you may contact Brock Beadle at 515-341-7040, or e-mail at bbeadle@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Brock Beadle. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.

Morning Comments; Monday, February 25th, 2019

Grains are trading mixed on the overnight session.

The markets reacted Friday in their normal fashion lately to the USDA’s outlook forum balance sheet projections for 2019. Corn balance sheets look to tighten using trend line yield and demand assumptions. Some of the lack of enthusiasm is that the USDA has fell short of final yield by over 4 bushels per acre each of the past five years. Since 2004, the USDA forecasted yield has fell short of the final number 60% of the time. Weather always remains the wild card for yield and that can vary greatly over the next 11 months until the final production number released in January. Traders are questioning corn demand as exports have been robust earlier in the marketing year, but now have begun to fade. Corn exports are now a meager 30 million bushels ahead of the year to date figure from a year ago.

After the close Friday, U.S. Secretary of Agriculture Purdue announced that China had committed to purchasing another 360 million bushels of U.S. soybeans. This came after a meeting with a Chinese delegation with officials in Washington, D.C. Another good faith effort by the Chinese, but no word on any further advancement in negotiating trade sticking points, such as intellectual property rights. News sources have yet to provide unanimous results that would indicate a trade deal is close to being completed. A tweet from President Trump Sunday evening indicated significant progress and that the U.S. would delay the increase in tariffs proposed on March 1 assuming progress continues with negotiations.

The U.S soybean export program is a bit muddled as one looks at the numbers after the USDA has played catch up with weekly sales reports following the government shutdown. Some of the recent Chinese purchases were reported as less than previously announced. At a minimum, exports are lagging close to 300 million bushels. If Friday’s sale announcement of more U.S. soybeans occurs, it could help get the balance sheet closer to being accurate. Nevertheless, the fact remains the U.S. still has the largest soybean carryout seen at over 900 million bushels.

Market Movers: Chinese trade negotiations, acreage debate and export business.

For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at asuntken@maxyieldcooperative.com. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

Closing Comments; Friday, February 22nd, 2019

Export sales for weeks ending January 10th and February 14th were within the expected ranges for corn with both wheat and soybeans exceeding its expected ranges. Corn saw 238.4 million bushels in sales with soybeans seeing 240 million. Wheat came in at roughly 131 million bushels. China was again the largest buyer of soybeans. China has cut the amount of US soybeans purchases since last July and typically is the largest buyer of beans throughout our fall and winter.

The Ag Outlook’s balance sheets puts corn in a friendlier position with stocks to use predicted at 11 percent using a 92 million acre count and 176 yield estimate. On the demand side, feed is expected to increase roughly 125 million bushels. The quiet leader of the pack has been exports. Any hiccup along the road, could put corn in a rationing mode.

The soybean balance sheet shows a large 4 million acre decrease to 85 million acres. Couple this acreage decrease with a 49.5 bushel yield, and we cut the carryout down to 845 million bushel carryout, not much lower than our current estimate of 910 million bushels. Market analysts are hesitant to dip their toe in friendly waters until we get a definitive trade agreement. It is safe to say the acreage debate will be highly contested leading up to the March reports.

March Corn closed cent lower at $3.75 . March Soybeans finished 1 cent lower at $9.10 . March Chicago wheat closed 1 cents lower at $4.85.

For more information, you may contact Brock Beadle at 515-341-7040, or e-mail at bbeadle@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Brock Beadle. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.

Weekly Review; Friday, February 22nd, 2019

Weekly Market Review

Vegetative imagery maps released recently showed large yield potential of Argentina’s crops. Experts are drawing comparisons between this year and 2007. That year, corn production was 17% above trend and soybeans exceeded trend by 12%. If realized this year, both would exceed last year’s crop by over 30%. The same imagery maps show that Brazil’s outcome seems less clear. In comparable years Brazil’s corn has seen anywhere from 9% below trend, to 14% above trend. Soybeans on comparison have tallied anywhere from 10% below to 17% above trend yields. Sources say that the most comparable years are 2012 and 2014, where corn ranged 8-10% above trend and soybeans fell 6-10% below.

Soybean production in Brazil is nearing the point where weather is starting to become less of a factor. Many believe we have seen the lowest production forecasts of the year. Conversely, Argentine weather will have trades attention. Current forecasts are calling for increased temperatures and only light rain for the next two weeks in that country. Trade is hypersensitive to this news as last February, hot and dry weather began to diminish soybean production. From February to May, Argentine soybean production fell 15 MMT.

Argentina’s Rosario Exchange recently revised their production forecasts for corn and soybeans. Their estimates for corn production stand at 46.5 MMT, up 2.5 MMT from their latest estimate. Their soybean forecast is at 52 MMT, which is 2 MMT above their last estimate.

For the week ending February 15th, weekly ethanol production saw a decrease of 33 thousand barrels to 996 thousand barrels produced. Total ethanol stocks saw a build of 447 thousand barrels to 23.91 million barrels. Retailer interest in E15 across in the United States has been increasing as President Trump has been touting the new law implementing E15 year around. Even though these laws are not in place, retailers seem confident that the President will follow through with his promise.

Since 2010, domestic corn demand has grown by an average of nearly 250 million bushels each year. This past year’s growth is estimated at 66 million bushels, whereas the prior year saw an estimated growth of 150 million bushels. This growth is needed as trend yields continue to climb as technology and farming practices keep improving.

As the trade war lingers on, China continues to shop from other sources to cover needs. It was reported that for the first time in history, China is working to gain approval to import corn and barley from Uruguay. Soybean purchases last week from Brazil and Argentina also show that China is still purchasing on their own terms.

Export inspections for the week ending February 14th fell within expectations for corn and soybeans. Corn loadings totaled 37.1 million bushels putting the current pace 6% ahead of the pace needed to reach the USDA’s forecast. Soybean loadings came in at 37.9 million bushels, which is above the 10-week average but still lagging the pace needed by 26%. The wheat figure fell below trades expectation and the needed weekly amount at 13.1 million bushels.

Soybean exports continue to lag with the ongoing Chinese trade negotiation gridlock. Export inspections for soybeans were as expected for the week and China accounted for almost 15 million bushels. However, the 435 million bushel shortfall from the USDA’s projection will not be erased by good will purchases during the negotiation process.

Reports circulated during trade negotiations recently that China offered to increase purchases of US agriculture products by $30 billion over 2017. Rumors have been circulating that China is looking to approve US ethanol and DDG’s for import. President Trump also mentioned the possibility of large purchases of US corn by China. There has been no action taken nor has there been any further mention of tariff increase deadline of March 1st.

The USDA Ag Outlook Forum took place Washington this week bringing a plethora of information from inside the great minds of USDA. The USDA projects 2019 US corn acreage at 92 million acres versus the 89.2 million in 2018. Soybeans are projected at 85 million acres compared to last year’s 89.2 million acres. Wheat plantings are expected to drop to 47 million acres compared 47.8 million acres in 2018. The tug of war between rotations will continue as the market stands anxiously waiting for a trade deal to be completed. All this considered fieldwork is just around the corner.

Corn prices have been sluggish despite stocks to use ratio of 11.7%. Since Jan 1, the corn/soybean price ratio has been at 2.37. Historically a ratio below 2.3 indicates a shift to corn acres. Looking back to 2006, when the price ratio is above 2.4% corn acres decline. With the strength in the soybean complex, the uncertainty of big acres switching to corn remains.

The Canadian Pork Producers Council announced that a rumor that African Swine Fever was found in Canada was false. The news on social media sent hogs limit down and added pressure to grains. There has been some concern about the disease reaching North America through shipments of feed ingredients from China. The disease continues to spread in China as it was found for the first time in the eastern province of Shandong. That region is a major livestock production area and further spread could reduce feed demand even more.

For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at asuntken@maxyieldcooperative.com. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

Morning Comments; Friday, February 22nd, 2019

Corn and soybeans are slightly higher in the overnight session.

Soybean production in Brazil is nearing the point where weather is starting to become less of a factor. Many believe we have seen the lowest production forecasts of the year. Conversely, Argentine weather will have trades attention. Current forecasts are calling for increased temperatures and only light rain for the next two weeks in that country. Trade is hyper-sensitive to this news as last February, hot and dry weather began to diminish soybean production. From February to May, Argentine soybean production fell 15 MMT.

Argentina’s Rosario Exchange recently revised their production forecasts for corn and soybeans. Their estimates for corn production stand at 46.5 MMT, up 2.5 MMT from their latest estimate. Their soybean forecast is at 52 MMT, which is 2 MMT above their last estimate.

Reports circulated yesterday that China offered to increase purchases of US agriculture products by $30 billion over 2017. Rumors have been circulating that China is looking to approve US ethanol and DDG’s for import. President Trump also mentioned the possibility of large purchases of US corn by China. No confirmation of action has been made nor has any further mention of tariff increase deadline of March 1st.

Market Movers; Export sales data, Ag Outlook Forum data and trade news.

Closing Comment; Thursday, February 21st, 2019

Today’s Ag Outlook forum brought a plethora of information from inside the great minds of USDA. The USDA projects 2019 US corn acreage at 92 million acres versus the 89.2 million in 2018. Soybeans are projected at 85 million acres compared to last year’s 89.2 million acres. Wheat plantings are expected to drop to 47 million acres compared 47.8 million acres in 2018. The tug of war between rotations will continue as the market stands anxiously waiting for a trade deal to be completed. All this considered, fieldwork is just around the corner.

For the week ending February 15th, weekly ethanol production saw a decrease of 33 thousand barrels to 996 thousand barrels produced. Total ethanol stocks saw a build of 447 thousand barrels to 23.91 million barrels. Retailor interest in E15 across in the United States has been increasing as President Trump has been touting the new law. Even though these laws have not been put in place, retailers seem confident that the President will follow through with his promise.

March corn finished 4 cents higher at $ 3.75 . March Soybeans closed 8 cents higher at $9.11. March Chicago wheat finished 6 cents higher at $4.87

For more information, you may contact Brock Beadle at 515-341-7040, or e-mail at bbeadle@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Brock Beadle. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.

Morning Comments; Thursday, February 21st, 2019

Corn and soybean values are trading higher this morning.

Vegetative imagery maps released recently showed large yield potential of Argentina’s crops. Experts are drawing comparisons between this year and 2007. That year, corn production was 17% above trend and soybeans exceeded trend by 12%. If realized this year, both would exceed last year’s crop by over 30%.

The same imagery maps show that Brazil’s outcome seems less clear. In comparable years Brazil’s corn has seen anywhere from 9% below trend, to 14% above trend. Soybeans on comparison have tallied anywhere from 10% below to 17% above trend yields. Sources say that the most comparable years are 2012 and 2014, where corn ranged 8-10% above trend and soybeans fell 6-10% below.

Since 2010, domestic corn demand has grown by an average of nearly 250 million bushels each year. This past year’s growth is estimated at 66 million bushels, whereas the prior year saw an estimated growth of 150 million bushels. This growth is needed as trend yields continue to climb as technology and farming practices keep improving.

Market Movers; Ethanol Manufacturing data and trade negotiations.

Closing Comments; Friday, February 15th, 2019

The January NOPA report came in just above trade estimates and was supportive for much of today’s action in the soybean complex. Today’s report show a crush of 171.6 million bushel with the trade average at 169.9 million bushels. Meal exports came in at 906 thousand tons. This equates to an increase of roughly 80 thousand tons over December’s print of 826 thousand tons.

The forecast for the remainder of February and March seems to be a continuation of what first the half of February has been. In the short term, temperatures are expected to remain extremely cold with a decent amount of precipitation expected. Keep in mind, in roughly 60-70 days, a large swath of fieldwork will be progressing throughout major corn growing areas. The wheat crop sitting dormant on the plains is seeing decent conditions. These areas are expected to see favorable conditions with no extreme cold in the short-term forecast.

March corn finished cents lower at $3.74 . March Soybeans closed 4 cents higher at $9.07 . March Chicago wheat finished 3 cents lower at $5.03 .

For more information, you may contact Brock Beadle at 515-341-7040, or e-mail at bbeadle@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Brock Beadle. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.

Weekly Review; Friday, February 15th, 2019

Weekly Review

With last week’s release of multiple reports, trade has had plenty of time to analyze and develop an opinion on the data available. One of the most notable changes was the final corn yield adjustment, the largest corn yield decrease from the November to January report since 1990. Many analysts were shocked last year as USDA yield forecasts continued to climb throughout the summer. The USDA reduced the final corn yield 2.5 bushels from the November report, with 19 of the 25 major corn producing states showing a reduction in yield in Friday’s report. An extremely large increase in on farm stocks of soybeans were reported in certain states, including Illinois with an increase of 161 million bushels.

The lack of acres switching to corn from soybeans, adds further to the bearish argument. The USDA will begin to put together acreage estimates in a few weeks for the March 31st acreage report. Initial private estimates are not indicating a large acre switch, but Mother Nature could always throw a wrench into producers’ intentions. A cold, wet, late spring like in 2018 can push acres from corn into soybeans by force, not economics. The elephant in the room for soybeans remains the export program, which the USDA has not adjusted lower. The day of reckoning will happen eventually and further add to carryout.

Large soybean stocks continue to be a discussion in the markets. FC Stone analysts stated that even if Brazil’s soybean crop is reduced to 115 MMT, the western hemisphere would still have 5 MMT higher soybean stocks than March 1st of last year. The crop would have to drop to 110 MMT to be equal to last year’s figure, while the current USDA figure is 117 MMT.

Export Inspections for the week ending February 7th, were reported lower for both corn and soybeans compared to the prior week. Corn inspected for export came in around 29.2 million bushels, with Japan being the top destination. Although corn inspections have slowed down due to more competition, export inspections for corn are still ahead of the pace compared to last year. Soybean inspections were at 39 million bushels, with shipments heading to China and shipments leaving ports in the Gulf and Pacific Northwest. Wheat came in at 20.6 million bushels, with Japan, Mexico and Egypt being the leading destinations.

The catch-up export sales report for the week ending January 3rd fell below the expected range and the volume needed to reach the USDA’s estimate for corn, soybeans and wheat. Corn sales totaled 18.1 million bushels. Soybeans showed a negative 22.5 million bushels as China and unknown destinations cancelled sales. Wheat sales totaled 4.8 million bushels.

The trade war with China continues to plague the grain markets with a lack of enthusiasm. Bloomberg, released news yesterday indicating the U.S. and China have made little progress reaching a deal on structural reforms to China’s economy. The U.S. is standing firm that China needs to cut back subsidies on state owned enterprises and that it has been a major hold up with Chinese negotiations. Both sides are working to avoid slatted increases in tariffs from 10% to 25% on March 1. Sources indicate the White House may agree to push back the tariff increases for another 60 days to help further negotiations. The lack of progress could be signaling a needed meeting between the two presidents to push negotiators to resolve the issues.

For more information, you may contact Kristi Guse at (712)-260-6486, or e-mail at kguse@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Kristi Guse. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

Morning Comments; Friday, February 15th, 2019

Grains are trading mixed on the overnight session.

China trade war struggles continue to plague the grain markets with a lack of enthusiasm. Bloomberg released news yesterday indicating the U.S. and China have made little progress reaching a deal on structural reforms to China’s economy. The U.S. is standing firm that China cuts back subsidies on state owned enterprises and has been a major hold up with Chinese negotiations. Both sides are working to avoid increases in tariffs slatted increase from 10% to 25% on March 1. Sources indicate the White House may agree to push back the tariff increases for 60 days to help further negotiations. The lack of progress could be signaling a meeting between the two presidents is needed to push negotiators to resolve the issues.

The National Oilseed Processors Association (NOPA) will issue their January soybean crush report today at 11 a.m. Crush is expected to be down just over 2 million bushels from December at 169.58 million. Soybean oil stocks are estimated to be 1.566 billion pounds. This would be up 4.5% from December, but down 10% from a year ago.

Market Movers: Chinese trade negotiations, acreage debate and export business.

For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at asuntken@maxyieldcooperative.com. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

Morning Comments; Wednesday, February 13, 2019

Corn and soybeans are trading steady to higher this morning.

The firm CONAB released their updated production forecasts for Brazil yesterday. The firm lowered their soybean production estimate to 115.3 MMT, which is down 3% and in the mid-range of expectations. Their corn production estimate increased 460 KMT from January and is now pegged at 91.65 MMT. Drought conditions reduced the size of the 1st crop corn but the return of showers of late triggered them to increase the size of the safrinha crop.

Last week’s USDA report showed the largest corn yield decrease from the November to January report in recent history. Many analysts were shocked last summer as USDA yield forecasts continued to climb throughout the summer. At their highest forecast, corn yield was estimated 4.9 bushels per acre higher than last week’s release. Of the 25 major corn producing states, 19 showed reduced yields in Friday’s report.

The USDA reduced China’s soybean import forecast in their latest release. The forecast now stands at 88 MMT, which is a 6 MMT drop from last year and the only decline reported since 2003/2004 marketing year when a late season drought and the first infestation of aphids cut the soybean crop. The following year, exports to China increased nearly 9 MMT. Exports since then, had seen steady growth, until this year.

Market Movers; Chinese trade discussions and ethanol data.