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With only two days remaining in the month of February, grain and soy markets are looking uninspired and mixed. Fresh outside news appears to be nonexistent and I suspect that much of the trade amounts to little more than month end position squaring. As it stands while I am writing the comments we have corn, wheat and bean oil and beans in the negative column with meal trying to maintain minor strength. Macros should actually be just a touch supportive as we have energies and metals higher while equities and the dollar are soft.
While there was nothing released at the USDA conference last week that would fall under the category of shocking or even something worthy of a raised eyebrow but I do believe that it is worth noting that the economists for the agency appear to be on the same page as so many others in belief that commodities have reached a point of balance and the outlook for the 2017/18 crop year is neutral to positive. The average price targets that they published project that the average price for corn will be $.10 (2.9%) higher than the current crop year, beans $.10 (1.1%) higher and wheat the biggest potential winner with a gain of $.45 (11.7%). While certainly not the kind of gains that would be considered awe inspiring, after four years in a row of losses for corn/wheat and three out of four in beans, it is just the kind of stabilization that we need to see. As the old Chinese proverb says, a journey of a thousand miles begins with one step. Let’s keep in perspective as well that this number reflects an average year ahead and would assume no real weather issues.