Corn is up 1-2 this morning as traders continue to look for direction from the other markets as trade awaits any positive news from the demand side. The USDA’s chief economist said they will decide tomorrow if they will delay the crop reports scheduled for January 11th due to the partial government shutdown. There has been no deal or indication that a deal would happen to end the shutdown. President Trump and key Democrats are meeting tomorrow as Democrats take over the House today.
Soybeans are up 5-6 this morning after yesterday’s strong performance on rumors China was looking to buy 1-2 mmt of US soybeans. US and Chinese officials are set to meet face to face starting January 7th.
I would advise producers to get firm offers in with your local grain buyers for the 2018 and 2019 crops. I don’t expect any adjustments in the USDA’s Supply and Demand charts to be big enough to move the grain markets significantly higher. With more corn acres next year and South American soybean starting to hit the market place in the next couple weeks, I expect more sideways movement in the markets with few opportunities to capture higher prices. The best chance to catch higher prices on any bounce are with firm offers. Producers should target $3.50-$3.75 for their next old crop sales and 3.70-3.75 for their next new crop sales. We are currently in the 70th percentile for the last five years with prices in the $3.70-3.75 range for fall 2019 delivery. Any sale that can be made at or above this percentile is strongly recommended. If we increase corn acreage in 2019 by 4-5 million acres next year and drop yield back to 175 bpa we could very easily push next year’s carryout over 2.0 billion bushels. This is why I would advise producers to have a minimum of 20% of your fall corn sold at this level.
Have a Safe Day!