Daily Market Commentary

November 17, 2017

Good Morning,

The corn market is trading slightly higher this morning on short covering heading into the weekend. This week the market made several new contract lows as we search for bullish news in the market. Funds are short 240k contracts after yesterday’s trade which is the largest level in the past 10 years.
Next week is a shortened trading week due to Thanksgiving so I would anticipate this choppy trading action to continue.
Brazilian crops are enjoying regular rains; while forecast models for Argentina continue to show limited chances for precipitation over the next 2 weeks as a high pressure ridge settles in. Concerns over Argentine dryness continue to grow as it will begin effecting yields there in mid-December.

Yesterday private analyst Informa, estimated the 2018 corn plantings at 91.415 million acres, up from their previous estimate of 90.460. Soybean acres are estimated at 89.627 million acres, down from 90.347. I have been talking about this with producers for the last two months and think this is another reason that they should be proactive in making sales of the 2018 crop.

With a carryout of 2.4 billion bushels on the table, producers should take this as a sign to be proactive in marketing their 2018 crop. Cash prices for fall of 2018 are in the $3.50-3.60 range currently. Compared to cash prices in the $2.90’s this is a great starting point. If not making cash sales, producers should at least be locking in basis levels. Producers that were proactive and locked in this falls basis levels before harvest added 10% to their bottom line by locking in basis levels that were 45% better than they are now.

Have a Great Weekend!

Garry Gard