Sluggish Markets & Cold Holiday Forecast - Thursday, 21 December 2017

Corn is trading near contract lows ahead of the Christmas and New Year’s holidays.  The improved weather in South America, concerns that the USDA may raise their final corn yield in the yearend report, 2.5 billion in ending corn stocks and talk that U.S. farmers may be planning to plant more corn acres in 2018 are bearish stories weighing on prices.  On the other side of the fence the bulls report that China appears to be taking further aggressive steps to trim down their substantial corn stockpile.  They also expect that the downside pressure we’ve been seeing, especially in the past couple of days, could bring a strong day to the upside which would likely prompt some of the heavily short-sided funds to cover some of their positions as we approach the long holiday season ahead.

 

Soybeans have not been able to catch a break either the past several days. Reports that U.S. producers are planning to plant record acres of soybeans in 2018 and strong exports out of Brazil are pressuring the market. There are concerns that Brazil’s crop may be much bigger than what the USDA is currently estimating due to more acres planted than earlier expected and better weather in regions that saw poor yields last season.  Bulls contend that while this may be true, the situation in Argentina may offset any increased yields out of Brazil. Oil World noted that dry conditions in several of the key growing regions of eastern Argentina were eased with rainfall over last weekend. Concerns still remain as many regions will see significantly lower than normal rainfall for the third straight month.  La Niña is expected to continue this dry pattern for January and February as well for this region

 

Politico is reporting that Senator Grassley from Iowa is concerned about a possible U.S. pullout from NAFTA and is investigating the prospects for “post NAFTA funds” to bail out farmers. During a morning call held with reporters Grassley said he was planning to ask U.S. Trade Representative Robert Lighthizer about “rumors” of a fund that is being set aside to assist farmers in case negotiations fail.  Grassley said, “I’ve heard rumors that people in the bureaucracy are trying to anticipate- if that’s a possibility- what we are going to do to protect small farmers from drops in prices. There’s some talk about putting together a pot of money so you could support prices that fall apart if we pull out of NAFTA.”

Corn & Soybean Advisor reports that the soybean crop in Brazil is basically planted.  Mato Grosso reports that most soybeans in that state are flowering while in some parts of Brazil the earlier planted soybeans are beginning to fill pods. Reuter’s reports that Brazilian farmers are expected to produce 114.57 MMT of soybeans during this crop season which is slightly lower than earlier estimates but would still set an all-time record for the country. While the outlook for the Safrinha corn crop is still unknown, CONAB estimates that the corn acres will be down 9.6% from last year and the yield is expected to fall by 9% making this year’s corn production 17.8% lower than a year ago. 

WeatherTrends 360 expects an Arctic blast will soon be arriving via Polar Express for the Christmas weekend and into the New Year. The Upper Midwest and Plains can expect the brutally cold air to arrive by tomorrow dropping temps well below zero across the northern U.S. 

 

WeatherTrends 360 is also looking at the possibility of a major ice storm and snow storm to impact dozens of states in the Eastern ½ of the U.S. from December 28th through December 31st. With the extremely cold temperatures and the liquid snow ratios being very high the potential is great that this will develop.

 

 





The staff at Ag Performance would like to wish all of you and your loved ones a

Very Merry Christmas!

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