Jul 28, 2014
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February 2014 Archive for Current Marketing Thoughts

RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

USDA to Raise Corn Exports?

Feb 25, 2014
Corn continues to take a couple of steps back from Friday's high. There is talk circulating that Ukraine corn is getting more competitive to US exports and that Argentina is also gaining some additional market share. This is causing several inside the trade to think US exports might soon start to run into a little competition. I would simply call it a blip on the radar screen and nothing to get overly fearful about.  In fact my hunch is the USDA ultimately ends up having to raise the US export estimate beyond the current 1.6 billion bushels. The problem is we are still more than likely looking at a 2 billion bushel plus carryout, assuming US producers harvest an average yield north of 163 bushels per acre. Until this number is more heavily questioned (which wont be for some time) it just doesn't feel like we have what is needed to post any real significant gains. Producer who need to make catchup sales in new-crop should do so. Producers who are comfortable with current hedges and sales should remain patient.  Those holding old-crop bushels need to be paying attention to the basis. I am concerned that once the winter weather breaks and transportation frees back up offers might start to ease.  CLICK HERE for my daily report....  

 

Will High Bean Prices Force USDA's Hand?

Feb 24, 2014

Soybean producers following our lead should now be "100% SOLD" in old-crop. Our cash-sales target of $13.72, that had been in place for several months, was finally triggered. With more Chinese purchases either "rolling" to new-crop, "switching" to Brazilian origins or simply being "canceled," I have decided the stakes are just too high to continue holding old-crop bushels. I am also starting to hear more talk of Argentine framers releasing a bit more inventory. From my perspective, this should be played like the final round of "Double Jeopardy". Meaning this is an extremely tough question to answer and can make or break your earnings. With the Chinese crush margins falling apart and the Brazilian harvest moving right along, I am just not willing to bet much on this final question. With this in mind our objectives and focus now immediately switches to monitoring and looking for ways to reduce more risk and exposure in both the 2014 and 2015 crop years. I am not suggesting to race out and sell all of your anticipated new-crop production just yet, as there is still a strong bull story in play, especially when you consider US export commitments are already some 2 million metric tons more than the current USDA export estimate and we still have 7-months left in the marketing year.  Point is the USDA has to either tighten the balance sheet even further or US soybean prices have to move even higher to encourage Chinese cancelations since we just don't have the bushels. The question remains, have we moved high enough to force their hand???   Click Here for my daily report....

When Does The Half-Time Show End For Old-Crop Soybeans? There is no question soymeal is the "Drum Major" (leader of the soybean marching band). I suspect not until the crowd clearly sees the band heading off the field and into the locker room will bullish traders stop cheering.  Keep in mind meal has been the leader and continues to be the leader of this rally. Not until the trade is convinced Argentina can handle a larger portion of the demand requirements or that US crushers have enough supply to carry us through, will prices fall under much extreme pressure.  I just don't want to be around when .......  Click here for my daily report....   

Can Corn Bulls Win a Few More Battles?

Feb 22, 2014

Corn continues to hold its recent gains as the bulls seem satisfied with the corn acres at 92 million.  Not that its a huge victory, because we would ultimately like to see the planted acreage number fall below 90-million, but it was nice to see the USDA trim another 1.5 million off their previous baseline estimate.  Unfortunately, from my perspective these are still just shots in the dark. Not until we get closer to planting will we truly get a gauge of how many producers are going to switch more acres to beans or perhaps back to cotton or wheat.  If corn prices continue to creep higher, planting conditions are favorable and farmers try to chase yields in order to pay the high priced rents, it wouldn't surprise me to see close 95 million acres go in the ground. Obviously, this would NOT be bullish.  On the flip side, if prices start to drift back to the lower end of the range and weather conditions delay planting, perhaps more producers than originally thought go with fewer soybean acres.  There is not a lot of "gas" on the fields right now and producers can easily elect to go a different direction. Meaning 90-91 million might not be out of the question if all conditions play out. I hate to sound wishy-washy, but I simply think the US corn acreage number is completely up in the air right now and is going to be heavily debated the next several weeks. Personally, I hope the bulls can continue to win a few more battles so I can reduce a little more risk on the rallies.  Click Here to get my daily report...

Here Is Your Road Map - Look for the following....

 

  1. March 31st Quarterly Stocks Report - This report could be a bit of a game changer, especially if the USDA finds more bushels than previously thought. This will be something the trade will start more heavily debating as we move forward.    
  2. Pre-Planted Acreage Debate The trade will heavily debate planted acreage as we move closer to plantings. There is already talk that the USDA could readjust acres significantly higher in the March 31st Planting Intentions Report!  
  3. Planting Pace Debate - Next debate comes in regard to US planting pace. The key number is how much will we have in the ground by mid-May.  Less than 80% and the trade will start to get nervous and prices will rally. More than 80%planted by mid-May and .....Click here for my daily report.... 
  4. June Precipitation - Next the trade will start to debate June Percipitation.  Obviously any lack of precipitation in your 8-Key states (IA, IL, IN, MO, MN, NE, OH, SD) will make the trade nervous and prices will work higher on lower corn yields. Better than average precipitation and yield estimates work higher.     
  5. July Temps - The final growing season debate will come in the form of July temps.  If we see extremely high temps on top of limited rainfall in June prices could push much higher as yield estimates fall. Cooler than normal temps and prices fall.       Click here for my daily report....

Where the Bean Market Volatility is Taking Prices...

Feb 20, 2014

Soybeans remain extremely volatile as the market tries to determine the extent of damage in Brazil along with China's next move.  Production in parts of southern Brazil remain in question as many areas experience one of their worst droughts in years. Keep in mind February is the main pod-filling month for the crop. I return there are some whispers that Oilworld and a few other note bale sources might  lower their estimates for the Brazilian soybean crop down to 85 million metric tons, much lower than what most had been anticipating just a couple of weeks back. Keep in mind however, even though this is drastically lower than the 90 million metric tons plus that was being forecast it is still stronger than the massive 81 million metric tons Brazil produced last year.  The kicker to all of this is that China continues to import soybeans at a record pace. Most sources thinking they purchase more than 69 million tons in 2013-2014, up dramatically from the 59.9 million tons just a year earlier. The problem is I doubt they make this type of jump next year. You can certainly argue they push imports to 71-73 MMT's, but I doubt we see a 15% or 16% jump in imports like we did this past year, that would put them up close to 79-80 MMTs (I just don't see it). With this in mind, producers who have very little if any new-crop priced may want to think about pulling the trigger with prices north of $11.40 vs. the NOV14contract.  I hate to sound like a broken record, but it still looks as if there could be $1.50 or more of downside risk, especially if producers here at home end up planting as many acres as I think we will (80 million plus planted). There are just too many producers switching to soybeans for us not to see a NEW record in planted acres.                                   CLICK HERE for my daily comments....

Time to Reward the Corn Market?

Feb 19, 2014

Corn bulls continue to talk about strong US export demand on the heels of better than expected weekly export inspections. The question being asked by the bears is just how far "strong exports" can carry the trade? The technicians are starting to pay more attention as well, considering the MAR14 contract just posted its highest close since last-October. The bulls are thinking a close in the MAR14 contract above $4.50 could allow for a "short-covering" squeeze and a potential run to the upper-end of the range which I believe is around $4.65 to $4.75. New-crop DEC14 corn has enjoyed a nice run higher as well (About $0.25 cents off the lows set back in early-Jan), now teetering back and forth across it's 100-day Moving Average, and now closing in on our next cash-sale target of $4.65. Producers who have less than 30% sold or hedged in new-crop may want to seriously considering booking some bushels. This price level is profitable for most of the producers we are working with (depending on the basis in your area).                                       Click here for my daily comments....

USDA Ag Outlook Forecast This Week...

Feb 18, 2014

USDA’s Annual Ag Outlook meeting kick's off later this week (Thurs/Fri) and all eyes will be on planted acreage and early yield estimates for 2014. There is no question the trade is concerned about "Total Production" estimates and just how high 2014/15 ending stocks could push. Below are few thoughts on what the trade is anticipating and the recent buzz: Click here for my daily report....

 

  • Planted Corn Acres: Most sources seem to be looking for number between 92 and 94 million acres. The thing to remember is even though last year we planted 95.4 million acres, a large chunk of ground in northern Iowa and southern Minnesota, that is certainly always considered corn acres, went "unplanted."  Those acres will be back in play this season along with the other ground that made up over 9 million acres of "Preventive Plant" last year.  Lets also not forget the......  Click here for my daily report....
  • Corn Yield: Depending on who and what you want to follow, most sources are projecting the USDA starts off with a yield between 165-166 bushels per acre. The kicker here is the fact the best average yield ever recorded in US history came back in 2009 at 165.2 bushels per acre.  Since then the US average corn yield has struggled to post anything higher: 2010=152.8 bpa; 2011=147.2 bpa; 2012=123.4 boa; 2013=158.8 bpa.  
  • Total Corn Production: Will total US corn production end up higher than the 14.26 billion bushel estimate thrown out in the baseline projections?  Will 2014/15 ending stocks end up at the 2.6 billion bushel estimate?
  • Planted Soybean Acres: Most are thinking the soybean acres come in much higher than the recent USDA 10-year baseline numbers, somewhere between 80-81 million acres planted vs. the 76.5 million planted last year.                           Click here for my daily report..... 
  • Soybean Yield: Most sources thinking the USDA will start off around 44.5 bushels per acre vs. the 43.3 bushel average harvested last year. 
  • Total Soybean Production: Will total soybean production end up higher than 3.5 billion bushels projected in the baseline report? How about ending stocks, will they push higher than the 202 million bushel baseline estimate? You would certainly have to think so especially after USDAs top Ag economist Joseph Glauber said late last week that.... Click here for my daily report....

Weather Bulls May Have Something to Cheer About...

Feb 14, 2014

Weather bulls might soon find something to cheer about... Forecaster are now thinking parts of Brazil could see anywhere from 6-12 inches of rainfall in the next 7-10 days, especially select areas of Mato Grosso and Goias (a couple of major production areas).  The concern is that the extremely wet conditions will heavily weigh on the pace of the soybean harvest and could aggressively slow filed work and planting of second-crop corn. Remember, if the second-crop corn in Brazil gets in too late it runs a very good chance of missing all of the late rains, hence causing significant yield stress.  the past couple of years they have been able to get the second-crop in the ground in a very timely fashion and they have had excellent late rains.   This time around the crop isn't going in bear as quickly and there is some talk they may be getting all of their rainfall earlier rather than later.  In fact some sources are already thinking the abnormally heavy rains could push out well beyond the 10-day forecast.  I am not one to generally give the longer-term forecast much weight but this is certainly worth monitoring. Especially when you consider hot and dry conditions in select areas in Southern Brazil may have already taken a toll on yields.  I should also point out that Chicago Ohare airport recently record its 22nd second day of below ZERO temps for this winter, making it the third most below zero days since the records began being kept back in 1872... My question is how can anyone argue we are not stuck in the middle of a very very volatile and extreme weather cycle? As we approach Spring planting I am thinking weather bulls will find a lot more to cheer about, certainly more than the apparent "green house bubble" many of the bears often believe the crop is planted, grown and harvested in.  One thing I have learned through the years, you can be a sharp as a tack in regard to the Supply and Demand numbers and wiz with the balance sheets, but nobody... I repeat nobody, has been able to consistently out guess Mother Nature! Moral of the story, the running of the "weather bulls" might soon be around the next corner.  How long they stay in the streets and how many bears they gore remains the question??? As I have been saying for weeks, be careful shorting the front-end of the soybean market its extremely enticing but remains extremely dangerous.  CLICK HERE for my daily report....

Corn Bulls: A Must Read for Higher Corn Prices!

Feb 13, 2014

Let The Crop Killing Commence: Each year as of late, we start the new year with the Bears up to bat. My question is will the Bears bat around the order or will the Bulls somehow find another way to roll up a double play and get out of the jam?  I'm thinking a hard hit combo of bad Spring weather and increasing demand could certainly set the stage. Under the current Supply & Demand scenario it doesn't take a whole lot get a little excitement. At least not nearly as much as when the market believed ending stocks would be north of 2.0 billion bushels. Lets just assume for a moment the USDA lowers the current "feed/residual" numbers to some degree and ending stocks push to around 1.6 billion bushels. Lets also assume, for argument sake, we harvest about 84.5 million acres on 92-93 million planted. In 12/13 we planted 97.2 million acres and harvested 87.4 million. In 11/12 we planted 91.9 million acres and harvested 84.0 million. Point is you can easily argue 84 to 85 million in harvested acres, especially if we run into a few weather hiccups in the Spring or more acres get switched away from corn than we are suspecting. In any regard, if at some point during the growing season the trade starts to believe a 145-150 yield could be in the mix a little more bullish excitement will definitely start to surface. Think about it this way, a 147 type yields gets you a 5-6% stocks-to-use ratio and prices are racing higher.  Even a 152 type number would put us around 9-10%. Bottom-line, a simple 5-10% reduction in yields from the 165 trend-line estimate and we are moving new-crop prices to higher ground. Moral of the story, I am always amazed at how a simple 6-7% reduction in yield could mean a 40% plus swing to the upside in price... I know its optimistic, but rather than chocking on $3.90 corn perhaps we can enjoy chewing on $5.50 corn???               Click here for my daily report....Thank You 

Reasons Corn Prices Stay Supported

Feb 13, 2014

Corn bulls can find some relief in the fact the recent slump in ethanol production was broken as output was up last week. The fact that stocks rose slightly is easy to explain away on bad weather and lack of movement, margins are still extremely profitable.  Ethanol exports also continue to help drive demand with Canada, Brazil, India and the Philippines taking US supplies. While China, Mexico and South Korea continue to scoop up US made DDGs. Another bright spot that seems somewhat buried in the news is that the UK has substantially increased corn imports as a substitute for feed wheat. December imports were up 74% year on year, the highest amount on records that date back some 20-years. Corn is also gaining fans among the UK’s bioethanol plants who are beginning to discover its value as a by-product, such as DDGs. Lets also keep in mind political unrest in both Argentina and Ukraine, along with Brazil shifting more focus to soybeans, makes the US the worlds primary supplier of corn at this juncture. However, the one kicker that continues to keep the trade concerned is obviously the Chinese rejection of US corn.  Remember there was optimism and hope early on that this was the year China moved towards a more "quantity" buyer of corn.  Sorry, that simply doesn't look to be the case this year.  With the Chinese hype looking as if its off the board, its going to take bullish US weather headlines to give us a boost.  Click here to get my daily grain comments...

Chinese Demand??? There has been some question as of late in regard to Chinese demand, especially when reports indicate industrial use of corn in China fell last year by almost 2% to 191 million metric tons. Most in the trade attribute the setback to poultry running into major headwinds associated with the bird-flu.  Several sources reporting broiler feed demand was off by over 7%.  There are also some questions being raised as of late in regard to profit margins on the pork side of the equation.  With hog prices taking a tumble margins are in the red. In other words its tough to expand your herd when you are loosing a fortune on each pig...Click for my daily report...

Can the Tight Bean Supply Trump China Cancellations?

Feb 12, 2014

Soybeans continue to dance to the same song... Will bearish headlines of Chinese "cancelations" come to fruition or will the bullish headlines of extremely tight US supplies continue to play to the crowd? As we move forward lets just keep in mind we still have nearly 5 million metric tons of US soybeans left to load and ship to China. If they back out now the trade will become extremely spooked, believing prices are simply too high to justify the lack of continued US export demand. If the Chinese don't back out, the trade will start to become more and more concerned about how and where we are going to find the bushels needed to supply the ongoing Chinese demand. One thing we have to keep in mind is the fact beans are now freely flowing out of Brazil.  Most reports indicate close to 1 million metric tons have already been loaded and set sail for China during the month of February.  Its believed there are another 3 million tons projected to load and ship before month end.  Bottom-line, China has definitely made the move to Brazilian beans, but we still haven't heard confirmation of "cancelations," at least not yet???  There is also some concern form inside China that the Brazilian beans may show up much quicker and in a bigger dose than the Chinese importers had anticipated. With crush margins in China backpedaling a bit as poultry and pork demand seems somewhat suspect, a glut of soy supply showing up on their doorstep from both the US and Brazil might be enough to tip the scale in a more bearish direction. In fact there are rumors of Chinese crushers trying to cancel more than 500,000 tons of US beans to avoid the glut.  The verdict on this rumor is obviously still out.  Maybe tomorrows weekly USDA sales data will confirm or prolong the whispers.  The bulls in the trade continue to keep a close eye on South American production, though record large, conditions are starting to be questioned more than ever. Logistical concerns are also starting to arise in some capacities.  The latest estimates, depending on the port of choice, show anywhere from 2-weeks to 30-day wait times already occurring to unload beans.  Producers who still have old-crop bushels to price might want to pull-the trigger sooner rather than later or find a way to limit your downside exposure by building some type of floor or hedge above $13.00. We are keeping our old-crop cash sale signals in place just up above $13.50 but I am making certain we have 100% downside protection just in case this market runs out of steam before my price points are hit.  Click here for my daily report..

Where are Corn Prices Headed this Week?

Feb 10, 2014

Corn traders will be focused on the following this week: 

  • US Ending Stocks - Will the USDA tighten current supplies?  Most sources believe yes, but perhaps not enough to discourage the longer-term bears and fuel a continuation of the recent rally. 
  • Exports - Considering the current pace of US exports it seem obvious that the USDA will need to raise exports.  The question is by how much???  Several good sources thinking between 50 and 100 million bushel increase to exports. 
  • Ethanol - Several sources including myself believe the corn used for ethanol needs to be moved higher, perhaps closer to 5.1 billion bushels vs. the current 5.0 billion estimate. I suspect, considering the recent wintery weather and slight setbacks in production at the plants the USDA can afford to wait to hike their estimate. Just not looking for much of a change here. 
  • Feed/Residual - Though most sources doubting any change will be made to the feed/residual numbers in this report, many traders are still thinking the USDA has grossly overestimated this number and a bearish adjustment could be dealt during one of the next couple of quarterly stock reports. Click here for my daily report.....
  • South American Production - Will the USDA lower their Argentine corn estimate like many sources in the trade are anticipating. Will they push their Brazilian corn production estimate higher like some sources have proposed? My bet is ....Get all my comments here...    
  • Chinese Demand - We continue to hear talk of the Chinese refusing US corn shipments.  USDA, in the last report lowered Chinese corn imports down from 7 MMTs down to 5 MMTs.  Several analyst wondering if that is still too optimistic, especially considering reports of a record Chinese crop and lower industrial use.  
  • US Acreage Battle - With the USDA "Ag Outlook" scheduled for Feb 21st, the trade remains nervous that US planted corn acres could remain above 90 million acres.  In fact several very reputable sources are ...Click Here for my daily report....  

USDA Report to bring Sales Opportunity?

Feb 07, 2014

Corn traders are tiring of the same old song and dance..."cold weather and lack of farmer selling." In response all eye's will be keenly focused on Monday's USDA report and thoughts of exports pushing higher and ending stocks tightening just a touch. Before you get all bulled up keep in mind we have confirmation that China has canceled four cargoes of US corn so far this week, bringing the grand total to more than 600,000 metric tons since November. Also keep in mind there is still around 1.8 million metric tons "unshipped." The question is will US exporters even bother sending these "unshipped" bushels, especially considering they may not want to take the chance on a rejection and possibly having to resell them at a discount to another buyer. I am not even sure this whole Chinese vs. US GMO issue is anywhere close to being resolved. Just yesterday there were reports circulating that Syngenta has already SOLD OUT of their "Duracade" corn seed here in the US.  the problem is this is yet another seed similar to Viptera, that has still NOT been approved by China importers. Lets also keep in mind while the USDA may actually lower ending stocks, more than likely we still end up double that of last year. Yes, US corn exports are strong and running well ahead of expectations, but I remain suspect in regard to if we will have enough bullish horsepower from the funds to push old-crop corn prices back above $4.65. Simply stated, a $0.20 to $0.30 cent rally from here seems like a GIANT hurdle.  Those  producers sitting on old-crop bushels need to start paying very close attention as we might be reaching the upper-end of our nearby limits.  Bottom-line, if we get a rally on Monday from the USDA adjustments don't be afraid to pull the trigger on a few more sales.  Spec's might want to consider throwing on a bearish position of some sort taking a shot on a nearby high being established.  Click here for my daily report...

What About The Feed/Residual Number? Unfortunately, the trade will need to continue digesting what appears to be an extremely large estimate of 5.3 billion metric tons by the USDA in the last Quarterly Stocks Report.  Keep in mind this estimate was thrown on the market despite the cattle herd being at it lowest levels in over 60 years and the PED virus trimming at least 1% off the hog herd. Net-net many source think the USDA will eventually need to adjust stocks higher by 300 to 400 million bushels to offset the mistakenly large number thrown out in the previous report.    

Soybean Bulls Take Center Stage

Feb 06, 2014

Soybean bulls continue to cheer for old-crop prices, especially with reports of continued Chinese buying.  The market has now been able to keep its head above the $13.00 mark for two consecutive days...today could make it three?  Chinese demand and Weather threats in South America remain on center stage. The trade counties to digest bullish headlines regarding Argentine floods and excessively dry conditions taking hold in parts of Brazil. Lets not forget there are deepening political concerns in Argentina that traders are monitoring as well.  Bottom-line, the market is worried that if China doesn't make "cancelations" or decides to come back to the US for supplies, because of problems in South America, there simply might not be enough soy to satisfy demand. With no real substitute for high protein, supplies will obviously go to the highest bidders. The question will end up being, how high will end-users go to guarantee supplies? We continue to hold on to the final 10% of last years production, still targeting cash prices just north of $13.50. New-crop NOV14 prices remain a completely different story, where as I have lowered our next cash sales target to the $11.40 area.  Like everyone, as each day passes I am increasingly more nervous about the risk-to-reward in new-crop beans.  Soybean sales reported at 577,000 MT for 2013-14 and 219,500 MT for 2014-15.  The trade was looking for a combined number 550,000 and 850,000.  Last week sales were reported at a combined 865,800.  Click Here for my daily report.... 

Markets Look to Play Weather Card for Price Direction....

Feb 05, 2014

Weather, especially of the wintery mix, will continue to dominate the nations headlines  this week. A sprawling storm system that started yesterday has dropped snow, sleet, and freezing rain in a huge swath from the Rockies and central and southern Plains into the Ohio Valley and Northeast. Although the storm bypassed the northern Plains and upper Midwest, those regions will have to contend with bitterly cold conditions and dangerously low wind chill temperatures. Farther south, a few strong thunderstorms may occur from the lower Mississippi Valley to the southern Atlantic Coast. Late in the week, precipitation will linger across the South and overspread the West. By the weekend, yet another winter storm will take aim on the eastern half of the US. For the rest of this week, bitter temperatures are the story for much of the nation, with sub-zero temperatures expected at times as far south as the central Plains and the Ohio Valley. The outlook till at least February 11th calls for a continuation of near-to below-normal temps nationwide, except for warmer-than-normal weather in southern California and the Desert Southwest. It’s possible we’ll see a break in the cold during the third week of the month, but that seems a bit far off to accurately predict. Click here for my daily report....

Keep Your Eye On South American Weather: We now have talk and concern about flooding in Argentina and more drought like conditions in parts of Brazil. Trusted South American crop analysts, Michael Cordonnier, recently warned that up to 5 million metric ton of Brazilian soybean output is at risk from the heatwave and drought like conditions which has already sent coffee prices soaring. He points to the fact that January was one of the hottest months ever in Brazil and that February shows little sign of improvement. Cordonnier also brought attention to the safrinha or second crop of soybeans which could also be hampered if heat prevents farmers from getting it planted. Net-net, Cordonnier believes that 3-5 million metric tons of Brazilian beans are at risk, but that an 85 million metric ton harvest would be a worst case scenario (keep in mind last years production was huge at 81 million metric tons). On a separate note, the Brazilian consultancy AgRural cautioned it might downgrade its forecast for the Brazilian soybean harvest because of the hot weather that is affecting production in Rio Grande do Sul and parts of Parana and the North East.  There is some talk that low reservoir levels in Southern Brazil might start impacting electricity production at hydroelectric dams. If the levels don’t manage a comeback, this could cause some problems at ports along the southeastern coast.  There is some rain in the forecast for many areas of Brazil, rest assured the market will be paying very close attention!  Click here for my report...

Corn: Pull the Trigger Now or Roll the Dice?

Feb 04, 2014

Corn continues to find minor strength on lack of farmer movement and rising demand. On the bullsih side of things, we are hearing the EPA is delaying any revisions to the RFS ethanol mandate until summer, which delays a possible decrease in demand for a few more months. We are also chewing on back-to-back winter storms which continue to snarl grain transport across the country, and are keeping the nearby cash prices supported.  From what I am hearing end-users are having a seriously rough time securing supplies, and with the next round of snow and ice moving in today, cash prices should continue to stay elevated.  Old-crop MAR14 contract has now traded out to it's highest level since early-December. Tech traders are thinking the market has potential to push just north of $4.50 and maybe as high as $4.60 before running out of steam and being pressured more heavily by farmer selling. The new-crop DEC14contract is now once again back above $4.50, meaning for many it is back above break-even levels.  Right now our benchmarking break-even for most of our producers on their upcoming 2014 corn crop is somewhere between $4.15 and $4.75 just depending on cash-rents and what the producers have allocated for their own labor expenses.  Bottom-line, producers who have made ZERO sales in 2014 are now faced with a tough decision, pull the trigger now on a portion of your estimated production and lock in either a small profit or a small loss...or go for one of the larger carnival prizes???                                     Click Here for my daily report....

Brazil's Second-Crop Corn Acres May Be Higher Than Most Estimating: We continue to hear talk form inside Brazil that the USDA and a large portion of the trade is underestimating the number of second-crop corn acres that are going to be planted in Brazil. This something we are going to be monitoring heavily in the days ahead. The drier weather pattern right now will only help Brazilian farmers get whatever they do plan on planting in the ground before the window closes around February 20th. After that, bulls will need to cross their fingers hoping that  the rainy season ends earlier than normal to upset the grain fill process.                         Click here for my daily report...

Corn: Will Winter Weather Push Feed Use Higher?

Feb 03, 2014

Corn exports continue to impress and several sources are now thinking the USDA will be forced to bump their demand estimates higher in next Monday's Feb USDA report.  Some bulls thinking US exports could eventually surge from the current 1.45 billion bushel estimate to over 1.7 billion (not in the upcoming report but further down the road).  There is also more talk that corn used for ethanol could eventually be bumped from the current 5.0 billion bushel estimate to 5.1 billion bushels.  The bears on the other hand continue to scream about the USDA's most recent  5.3 billion bushel "feed and residual" estimate and believe the number could ultimately be readjusted lower by 300 to 400 million bushels and completely offset the gains seen in both exports and ethanol.  Bulls will argue increasing corn into feed rations and colder winter weather staying in place longer-term may keep the feed and residual numbers stronger than most are anticipating.  Time will certainly tell and until then the trade seems to remain somewhat confused and trapped in a zone.  I suspect another $0.10 to $0.20 cent rally to the upside will be met with heavy farmer and speculative selling. The extreme winter weather should keep the basis in most areas well supported.  For now, a 40% setback in US corn prices seems to be adequate until more is known. Just keep in mind there is still more than 1.5 million metric tons of US corn on the books marked as "sold" to China, but it still hasn't shipped, as nobody knows for sure how the Chinese are going to handle US imports???   Click here for my daily report....    

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