Grain News – Quiet Markets in Holiday Mode
The grain markets are quiet this week with traders already in holiday mode. Last week’s WASDE report did not give anything new for the market to trade from. Ethanol demand was reduced by 50 million bushels; otherwise not many changes. The ethanol margins continue to be weak with more reports of plants slowing down grind or shutting down completely.
There has been some Chinese buying of soybeans, but not to the extent that will cause the burdensome supply to go away. Despite rumors that China would also buy some U.S. corn, there have been no confirmations yet.
This morning’s export sales report showed soybean exports larger than expected at 104.2 million bushels. This was the highest total for this marketing year. Even with these purchases by China, U.S. soybean sales remain 33% below last year. The USDA is forecasting just a 11% drop in soybean exports.
Corn exports were reported at 77.7 million bushels vs 35.6 million last week and wheat was lower than expected at 11.5 million bushels vs. 25.7 million last week. Corn exports continue to be decent for the year showing good demand. This will be needed going forward to help support some weakness in ethanol demand.
The average estimate for today’s Cattle on Feed Report has the number of cattle placed in November at 94% of a year ago. The number of cattle on feed is pegged at 102%. The Hogs and Pigs reports come out today as well with all hogs inventory being estimated at 102.7% of a year ago.
There is more chatter about dryness in Brazil’s center south region. Reports of some localized damage due to dry conditions are being reported. Brazil state statistics agency lowered its soy production forecast for the state of Parana to 19.1 MMTs, down from 19.6 MMTs. There is rain forecast in many of these regions in the next two weeks however this is worth keeping an eye on.
Will the second round of Market Facilitation Payments cause more selling of soybeans? Or will it allow more time so that sales can be put on hold for a bit? With the $1.65 added to the average sales price received this fall many producers have a price average well over $10.00 for their 2018 soybean production.
With lower volumes being traded over the holiday season the markets can move around a bit and a short-lived price jump could occur. Now is the time to sit down and look at how 2018 marketing plans worked or didn’t work and use that information to put together plans for old crop and the 2019 crop. Having working offers at your pricing targets is a great way to get some sales on and get started with a marketing plan. We can help put together a profitable plan for your operation. Call us and set up an appointment with one of our marketing specialists today.