1/11/18: Mark's "Market Talk" Blog

The grain markets carried their lackluster enthusiasm into the New Year. March corn closed the week out a half cent higher. The contract traded in a narrow range of less than 5 cents all week.

This week brings one of the most important reports of the year as the USDA releases the January reports. This includes the final yield estimates for the 2017 crop, plus it is a quarterly report. The talk is they will probably raise the corn yield just a bit but this should be offset by an increase in feed and ethanol use.

Exports have been dragging so far this year so they may back that number off some which would result in a larger carryout. Even if our stocks grow some it is thought that the world stocks will continue to shrink. At any rate there probably won’t be much movement until after the report is released Friday.

The funds are still big time short so just a glimmer of bullish news could set up a decent rally but today that doesn’t look likely. The bean market performed a little better last week as March futures closed 9 cents higher. This market has some of the same issues as the corn market. Stocks are higher than they need to be and recent exports have been poor. Normally this is the time of year that the US becomes the primary source of beans to the world. This year it appears the farmers in Argentina held some of their crop and they are still shipping beans.

There is some uncertainty concerning the news release from China that they are going to be more restrictive on the quality of beans entering their country. Originally some thought they wouldn’t take beans with more than 1% of FM. Now it seems those loads will be subject to more inspection and longer unload times.

In the end I look for them to take all of these beans but they will find a way to pay less for them. I have to think it is hard to keep beans this clean after they have been handled numerous times on their journey to China. This appears to be another ploy they can get away with when supplies are large and there are multiple sellers. It might be different once supplies tighten up.

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Mark White
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