Grain marketing commentary

David Reinbott
Agriculture Business Specialist
University of Missouri Extension

October 6, 2017

USDA Reports and Supply & Demand Tables

University of Missouri Extension Meetings in Southeast Missouri
Corn Meeting - December 13, 2017 at the Miner Convention Center, Miner, MO
Soybean Meeting - January 17, 2018 at the Miner Convention Center, Miner, MO

PLC and ARC-Co Payments for 2016

FSA released the county yields and payments for ARC-CO this week.  On my web site, you can find the payments for SEMO counties.

SEMO ARC-Co Payments for 2016
PLC for 2016

Corn prices continue to be pressured on the outlook of a big crop and ending stocks above 2 billion bushels.  The September 30th Quarterly stocks came in 60 million bushels smaller than anticipated, but still in the trade estimate range.  Next supply and demand report will be October 12.  The yield and acres will be the key numbers to watch.    We may get a small reduction in acres, but I am not sure if the yield will be reduced much if any.  Cash prices have been pressure on low river levels. I am hearing it is still dry in most of Brazil, which could delay the second crop corn plantings.  It is still early but needs to be watched.

Technically, December futures is in a trading range between $3.45 and $3.62.  The 50-day moving average is at $3.61.  A couple of closes above the 50-day moving average may open the door to a run up to $3.75.  However, it will take a positive fundamental report.  At this time, I am just not sure if we are going to get it, but we will have to see.  With the weak basis, it puts a premium on storage and taking advantage of the market carry.        

Large stocks and good yields are pressuring soybean prices.  Exports have been strong and that has help support futures.  Quarterly stocks came in 37 million bushels less estimated.  However, new crop ending stocks are still projected to be over 400 million bushels.    It has been dry in some regions of Brazil, which has delayed plantings.  If this continues for several more weeks, it could adversely impact production. 

Technically, November futures has nearby support at $9.50 then at $9.30 and $9.20.  Resistance is at $9.85.  The 200-day moving average at $9.75.  The $9.75 to $9.80 price range is key resistance.  The 200-day moving average turned back the last rally.  Just as in corn, the weak basis and positive carry puts storage at a premium. 

There are no strong positive fundamentals in the U.S. to turn prices higher in the short run.  It is dry in Australia and the Soviet Union wheat region.  This could have a big impact on prices if the dryness continues especially in the Soviet Union.  Just look how prices rallied this summer on our own dry conditions in the spring wheat region. 

Technically, July 2018 wheat futures has nearby support at $4.80 and then at $4.74.  Nearby resistance is at the 50-day moving average at $4.99.  Two of the major moving averages I watch are converging at $5.10.  When the major moving averages start to converge, it sets up the possibility of a good rally when we get a positive fundamental catalyst.  Could the dry weather in the Soviet Union be that Catalyst?  Something to watch and maybe buy a call option. 

Big cotton ending stocks will continue to pressure prices. 

It is important for a cotton producer to remain in close contact with his cotton buyer to get the most current price quotes.

Technically, December futures has found some miner support at 67.5 cents.  Next support level is at 66.5 cents.  First resistance is at 69.5 cents.  The 200-day moving average is at 71.5 cents. 


U.S. rice ending stocks continue to be tight.     

For cash rice quotes, contact your rice buyer to get the most current price quotes and cash price outlook.  

Technically, November futures have broken hard and is trying to find support at $11.60.  First resistance is at $12.20 and the 50-day moving average is at $12.50. The market looks weak and could easily take out $11.60.  Next support is at $11.10.