February 4th Grain Marketing Update

Good Morning!

I hope you’re having a great start to your week. This past week was a busy one for me. With several meetings during the week, it was all I could do to get to Nashville for the AgMarket conference. We appreciate all of you who attended. We talked about the markets of course, but with fertilizer, estate planning, weather and outside markets, we had plenty to digest. I realize we’re in some challenging times, so I think the best thing we can do is make sure we know at what levels we can be profitable and make good plans for how we’re going about our year. This week we’ll be home until Friday, when Tif and I will be heading to a warmer destination for a few days. It’s going to be the first time we’ve taken a few days in the last several years. With basketball season coming to a close, our free time will be improved, but with speaking season far from over, we’ll still be on the move. If we are heading to a meeting near you, you’ll probably get to meet some of my family as they generally travel with me this time of year. Keep in touch. For more information on AgMarket, click here. 

The markets started the week on the defensive but moved higher on Tuesday, wiping out Monday’s losses for the most part. Weather in South America has been hot and dry in Argentina, while Brazil is in good shape. Most forecasts have rain coming into the driest areas of Argentina, so that will be closely monitored. Outside markets should have provided a mixed bias:

• The US Dollar settled down .191 at 97.301.
• March crude oil settled up 1.07 at 63.21.
• The DOW settled down 173 points at 49,350.

Corn – The corn market started out the week losing a couple cents on Monday while getting it back on Tuesday. March corn closed 2 ¾ higher at $4.28 ½. This was ¾ off the high and 3off the low. Corn export inspections were solid but off of last week at 1.136 mmt. This is below a week ago by 300k and slightly under expectations. Export pace for both sales and shipments continues to run well ahead of the pace needed to meet the lofty 3.2 bbu USDA goal. The weather in Argentina looks more favorable for corn than we saw a week ago as forecasts are bringing solid rain chances in. Safrinha planting is just getting started and looks to run a bit behind. IF they’d stay wet down there, we could see some excitement due to how much corn we see exported out of South America. We’ve seen some hedging on new-crop, particularly for bushels going in the bin next fall. I know these prices aren’t the greatest, but taking advantage of carry in the market as well as basis appreciation could make those sales look pretty solid in my opinion. Speaking of fall, Dec26 corn settled 2 higher at $4.56 ¾.

Soybeans – Soybeans saw both sides of unchanged before moving higher. March beans were up 5 ½ at$10.65 ¾. This was 5 ¼ off the high and 5 ¾ off the low. March soybean meal was down 2.6 at 291.9, while soy oil was up 1.29 at 54.49.The weekly inspections showed bean shipments at 1.310 mmt, which was above expectations and a shade above a week ago. While Argentina’s bean crop looks to get some rain here soon, the bean market seems supported from falling out of bed, even with a big Brazilian crop getting harvested. The 45Z announcement on Tuesday was supportive for biofuel expansion but didn’t really offer any new information that we didn’t already expect. Selling beans either for cash or new-crop isn’t all that profitable if at all-but as with corn, if we’re ok storing a few, a hedge could make some sense. With bean carry at 60 and above at times last fall, a person rolling a Nov hedge in the $10.80 area could possibly roll it to July for a net price of $11.30-$11.40 with the only thing left to set being basis. Let us know if you’d like more info on a strategy like this. On Tuesday, Nov26 beans closed 4 higher at $10.79 ¼.

mbennett@agmarket.net

Matt Bennett

815-665-0462 – Work

@chief321 - Twitter