Good Morning,

Overnight markets had corn unchanged and soybeans up 10.

Weekly corn export sales totaled 75.6 mb, the second largest week of sales for that date on record and sharply higher than the level needed weekly to hit the USDA forecast. Total commitments of 1.634 bb now account for 61.6% of the USDA’s estimate, the second highest ratio on record going back to 1990. The only area of the export sales report to raise an eyebrow at is the weekly shipments needed to hit the USDA mark which now stands at 60.4 mb. This would be a new record shipment pace from now through August with the second largest average program being 57.3 mb shipped per week in 2017/18. While Mexico was the largest buyer at 28.2 mb, China did show for 6.3 mb.

The well-followed firm Informa released their estimates for the January report and expect the USDA to cut their national average corn yield to 174.1 bushels per acre (bpa) vs. the USDA at 175.8 bpa in December. If demand estimates were left unchanged from the December WASDE, carryout would drop to 1.558 bb and a stocks/use ratio of 10.5%. This would be the tightest stocks/use ratio since 2013/14’s 9.2% but would still not support prices above $4.50 on the CBOT based on historical stocks/use ratios. The January USDA reports could prove to be some of the more important in recent history, especially depending on how South American weather fares the next 30-days.

With shortened trading hours and days in the coming weeks and traders on holiday and year end vacations, I would expect markets to trade sideways in the coming weeks. The interest and market movers continue to be South American weather and the January crop report.

Have a Safe Day!

Garry Gard