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CBOT weekly outlook: December corn seen as bellwether

Soybean rally seen unlikely anytime soon

CNS Canada — As traders wait for the U.S. Department of Agriculture to put out fresh acreage estimates for corn and soybeans this week some eyes have already shifted to the behaviour of certain deferred contracts in the market.

“If the December (corn) contract broke above US$4 (a bushel) it would be a catalyst,” said Scott Capinegro of HighGround Trading Group in Chicago.

That’s the point at which many producers expect to Read more

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Will USDA Ag Outlook solve the corn acre debate?

The market is looking ahead to see how many fewer corn acres will be planted this spring.

Corn bulls are eager to see this weeks USDA Ag Outlook Forum data. The big question is how many acres of corn will be coming out of production? The over/under for U.S. planted corn acres seems to be right around 90 million.

The bulls are saying we will plant fewer than 90 million acres of corn, while the bears are suggesting perhaps a slightly higher number. I’m personally siding with the bulls, thinking many U.S. producers are looking for ways to further reduce cash-flow requirements. Which ultimately means Read more

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Maps show average corn and soybean yields

Corn and soybean producers faced dry weather in some areas last summer and yields varied across the province, but where faced low yields, Production Insurance helped out. A couple of areas were affected more severely by the dry weather and experienced yields lower than the historical average. Other parts of the province saw the highest […]

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Huge U.S. corn exports face hurdles from South American rivals

The United States appears well on its way to exporting the largest volume of corn in nine years, but there will be some hurdles to overcome in order to meet the full expectation for the season.

The United States is the world’s No. 1 source for corn and while not the primary form of domestic use, exports are crucial in keeping the supply from piling up, something that was a bit of an issue early on last season.

The U.S. Department of Agriculture has 2.225 billion bushels (56.5 million tonnes) of corn slated to ship by Aug. 31. If realized, the 2016/17 season would rank as the fifth-largest U.S. corn export campaign of all time, behind 2007/08, 1979/80, 1980/81, and 1989/90. Read more

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DTN Retail Fertilizer Trends

UAN Fertilizers Higher Once Again

OMAHA (DTN) — A majority of retail fertilizer prices continue to push higher, according to fertilizer prices tracked by DTN for the last week of January 2017. This marks the second consecutive week prices have been significantly higher, although prices have been trending higher much longer.

All but one of the eight major fertilizers were higher although only two were higher by any considerable amount. UAN28 was 8% higher compared to a month earlier while UAN32 was 6% more expensive. UAN28 had an average price of $236/ton while UAN32 was at $270/ton.

The remaining five fertilizers were slightly higher but not by a significant amount. MAP had an average price of $448/ton, potash $329/ton, urea $353/ton, 10-34-0 $439/ton and anhydrous $482/ton.

One lone fertilizer is slightly lower, but this move to the low side was not that notable. DAP had an average price of $430/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.39/lb.N, anhydrous $0.29/lb.N, UAN28 $0.42/lb.N and UAN32 $0.42/lb.N.

While retail fertilizer prices may not be as low as they were a few weeks ago, they are still relatively low in the big picture view and university crop budgets continue to reflect this fact.

In a post from the Agricultural Economic Insights’ Blog titled “Why Soybean Acres Aren’t a Clear Winner in 2017” from Feb. 6 and written by David Widmar and Brent Gloy, the ag economists take a look at the different crop budgets from across the Corn Belt. They used crop budgets for the 2017 growing season for corn and soybeans from Iowa State University, the University of Illinois and Purdue University.

The changes in the cost of seed, fertilizer and crop protection from 2016 compared to 2013 are broken down in the post. Scroll down to find the link to this post.

Not surprisingly, fertilizer has seen large declines during this time. Iowa State estimates fertilizer will be down $59/acre in corn and $25/acre in beans while Illinois figured $57/acre less in corn and $42/acre less in beans and Purdue was at $73/acre lower in corn and $44/acre lower in beans.

“While fertilizer expenses have changed in all budgets — as one would expect given declining fertilizer prices — changes in seed and crop protection have also been impactful,” the report said.

While some may believe soybeans would hold a clear economic advantage in the 2017 growing season over corn production, the university crop budgets were not consistent with the assessments of which crop would fare better economically. The Purdue and Illinois crop budgets favored soybeans in 2017, while the Iowa State crop budget favored corn.

Differences in the crop budgets are not uncommon, the report said. It happened in 2014 when the Purdue budgets favored soybeans while Iowa State and Illinois both stated corn would be more profitable.

“When evaluating seed, fertilizer and crop protection expenses across the three university budgets, the adjustments were not consistent,” the report stated. “Inconsistencies in production costs adjustments are also likely common across farms too.”

To read the post and review the results, click on this link: http://bit.ly/…

Retail fertilizers are lower compared to a year earlier. All fertilizers but one are now double-digits lower.

The one fertilizer no longer down double-digits is urea, which is now down 5%. UAN28 is now 10% less expensive while MAP is 11% lower. Both DAP and UAN32 are 12% lower, anhydrous is 13% less expensive, potash is 14% less expensive and 10-34-0 is 20% lower compared to a year prior.

DTN collects roughly 1,700 retail fertilizer bids from 310 retailer locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.


Source: DTN, by Russ Quin, DTN Staff Reporter

CBOT

CBOT weekly outlook: South American weather still key for soy, corn

CNS Canada — South American weather uncertainty is lending underlying support to soybean and corn futures at the Chicago Board of Trade, with speculators likely to remain on the long side until production issues are more clearly sorted out, according to an analyst.

“The funds don’t want to give up the ship, and there’s enough of a weather concern in there for them to stay long and bid up,” said Sean Lusk of Walsh Trading in Chicago on the buying interest in soybeans and corn. Read more

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Record harvests of corn and soybeans that fortified bearish arguments in 2016

The big crops keep coming

With 2016 nearly in the history books, it seems fair to say that the year will be remembered for its record corn and soybean harvests. Never before has any country ever produced 15.23 billion bushels of corn or 4.36 bb of soybeans, let alone both in the same season.

Not only was 2016 a year of good harvest, it was the fourth consecutive year of good harvests and, because of that, ending surpluses grew larger. According to USDA, U.S. ending corn stocks will total 2.4 billion bushels in 2016-17 or 16.4% of annual use. That is the highest stocks-to-use ratio in 11 years, an impressive accomplishment that took DTN’s national index of cash corn prices below $3.00 a bushel in the fall to its lowest level in eight years. Read more

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Soybean futures – will they outperform in 2017 too?

Soybean futures outperformed in 2016, rising for the first time in four years, by 14.4%, compared with a 1.9% decline in Chicago corn futures, and a 13.2% drop in wheat.

While the US harvested a record crop, demand has been strong too – supported by Chinese imports which also set a record high, with demand supported by a recovery in the fortunes of the country’s important hog producers.

Meanwhile, values of soybean oil have been supported by disappointing global output of rival palm oil, with the latest El Niño casting a long shadow over South East Asian production.

But will such factors continue to support soybean futures in 2017? Or will the US produce another record harvest to dampen price prospects?

Read more

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Loonie the No. 1 Trend to Watch in Agriculture: FCC

The Canadian dollar will have the biggest – and a mostly positive – impact on Canadian agriculture in 2017, according to Farm Credit Canada (FCC).

In its annual list of main industry drivers farmers should keep an eye on in the New Year, FCC said the loonie will impact every business across the entire agri-food supply chain in 2017. “Varying against the relative value of the American dollar, it can uniquely drive profits either higher or lower and is therefore our No. 1 trend to watch.”

To that end, FCC forecast the loonie in 2017 will pick up right where it left off in 2016: It will be a generally positive trend for Canadian agriculture, remaining below its 5-year average of 88 cents US, and hovering around 75 cents throughout the year.

“Watch the loonie in 2017. It could easily have the largest impact of all possible trends and drivers on the profitability of Canadian agriculture and agribusiness throughout the year,” FCC said. “It’ll certainly show up in the prices Canadian ag producers will get and ultimately, their farm cash receipts. A low loonie makes Canadian manufactured food products more competitive in foreign markets, and domestically, it’ll help shield Canadian firms from foreign competition.”

Meanwhile, FCC also compiled a list of four other drivers it believes will also impact Canadian agriculture throughout 2017.

  1. Energy prices

The West Texas Intermediate oil price benchmark is expected to remain around the US$50 per barrel threshold. Commitments to cut oil production by major oil producing countries strengthened the outlook for oil recently. But there are serious questions about the likely supply and strength of demand throughout the year.

  1. Commodity prices

With production growth and high ending stocks the big story for 2017, commodity prices aren’t likely to get much better for Canadian producers. Will lower commodity prices keep consumption and export demand strong enough?

  1. Investment landscape

The U.S. Federal Reserve chose to hike its key interest rate in December. Interest rates should rise both in the U.S. and Canada, but it’s the spread between the different rates that matters. With an outlook for this spread to grow slightly in 2017, how much investment potential will the Canadian economy hold?

  1. Global economy

The global economy will be a bit of a wild card in 2017. It’s going to impact demand for ag commodities. But as China-U.S. trade flows evolve, the question of their capacity to influence commodity prices and the long-term health of Canadian ag exports remains.


Source: DePutter Publishing Ltd.

Information contained herein is believed to be accurate but is not guaranteed by the parties providing it. Thompsons, DePutter Publishing Ltd. and their information sources assume no responsibility or liability for any action taken as a result of any information or advice contained in these reports, and any action taken is solely at the liability and responsibility of the user.