Good Morning,

Unchanged markets on the open this morning as we continue our winter doldrums. The fact that we have the 50, 100 and 200 day moving averages are all within 10 cents of each of other in the CH19 is another reminder of how uneventful this market has been.

Ethanol production for the week averaged 1.031 million barrels which is down 1.9% from last week and down 2.92% from a year ago.

Private analysts Informa released their estimates for the 2019 growing season yesterday and numbers were in line with what most were expecting. They project 91.5 million acres of corn which is 2.4 million above last year. They projected soybean acres at 86.2 million acres which is 2.9 million below last year.
I would not be surprised to see this acreage shift in 2019, and if we do it could make the current prices we are paying for fall and next summer look very good. At 91.5 million acres and a national yield of 178(2018 average) we could end up with a carryout of 2.8 billion bushel! If we dropped yield to 175 we would still have a carryout of 2.5 billion bu. In my opinion we would need to drop yield to 160 (a number we haven’t seen since 2013) which would result in a carryout of 1.3 billion to get the markets excited.
This is the time of year when many producers get caught focusing on the marketing of their old crop and don’t give enough attention to new crop prices. Don’t miss these new crop opportunities!
October and November cash prices are in the $3.60-$3.70 range while spring and summer of 2020 prices are in the $3.85-$3.95 range.

Have a Safe Day and Stay warm!

Garry Gard