Merry Christmas and Happy New Year from all of us at your CHS grain team.  We look forward to working with you in the coming year.  As a reminder, our offices will be closed on Monday, December 26 and Monday, January 2nd.

Holiday shortened trade today featured much of the same softer tone seen all week.  Beans took the brunt of the damage this week, down nearly $0.50 nearby and nearly $0.40 in the new crop 2017 slot.  Corn tried to hold its ground against collapsing beans, but still ended lower on the week, closing down five of the last seven sessions.  Soybeans have been trading lower on improving weather conditions in South America.  Parts of Argentina had been in a mild drought situation but recent rains have corrected the situation, and more rain continues to show up in the forecasts.  These rains should help the beans that are already planted, which will likely start to show up in global crop ideas in coming reports.  Ideas of big crops in South America on top of the big US crop will likely pressure beans in the near term.  Our next look at USDA numbers comes on January 12.  This should be the final yield and production number for the 2016 US crop.

Local basis levels have been quietly improving throughout much of the month.  Corn basis showed the first signs of life at some ethanol plants when the bitter cold snap dramatically slowed producer direct shipments.  Soybeans basis was slower to react, but did have a slightly better tone this week.

Next week will be another shortened week with thin, volatile trade likely to be a feature.  Be alert for pricing opportunities as any rally could be very short lived.

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CHS – Rochester Grain Team
Kasson: 507-634-7545 ext 7
Ostrander: 507-657-2234

This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS bases its recommendations solely on the judgment of CHS personnel.

Now that the US harvest is all but complete, the bins are stuffed to the eaves and market attention is shifting to South America prospects.  In broad terms, the US producer, seeing much better than expected yields sold beans off the combine as prices slowly climbed higher.  Corn on the other hand was generally put in storage in hopes of better prices to accommodate the higher yields.  The dismal cash movement is beginning to improve local basis values.

From a global perspective, US export sales have been disappointing with South America being more competitive in earlier-than-normal time slots.  Also, now that our friends to south are in their planting season focus has shifted to total production and world stocks of grain. Early indications are for record production out of South America which will only add to the record US crop to create a burdensome supply of grain in the world.

All that being said, where do we go from here?  World demand for US grain is waning, leaving our fortunes in the hands of the domestic processors.  It is quite possible we will see a “second harvest” in the US once the minimum storage time is used and the spring input costs start to pile up.   We could see some short term basis improvement, the huge crop we have stored in the bin coupled with steady demand, it is hard to justify prices being at the current values.  Beans are shakier ground than corn at this point.  Be prepared with target prices in mind and working.  At the same time, look ahead to next fall.  In some cases, fall 2017 soybean prices are at or above cost of production.  Generally speaking, there isn’t anything wrong with locking in a profit.

Read Full Market Update

CHS – Rochester Grain Team
Kasson: 507-634-7545 ext 7
Ostrander: 507-657-2234

This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS bases its recommendations solely on the judgment of CHS personnel.