MarketEdge

Select Pricing Program Bi-Weekly Updates!
John Stewart & Associates, September 8, 2017 Comments: (posted 9/11/17)

Bi-Weekly Update - September 8, 2017 - JSA Select Pricing Chart

As we approach harvest the key unknown on everyone’s mind is yield. This year’s weather across the Midwest has provided more variability than in years past and that typically translates into more price volatility.  To date that price volatility really has not presented itself, but the next 60 days will be key. Our view is that the lows are in for fall corn and soybeans, but that should not translate into us being overly bullish either.  IF the US corn yield truly is 169 or higher and the bean yield truly is 49 or higher there is not a lot of upside in either of these markets in the short term. 
 
US export demand for corn and soybeans is picking up nicely and we foresee that to continue into the early winter. China is on pace to eclipse last year’s record bean import number by more than 10% and given that we have less feed wheat to compete with on the corn export side we feel world import numbers could increase 2-3% from the year we just ended. That is not to say the US export number for corn will be higher, in fact, it will be lower due to significant record crops in South America.  But it is at least encouraging to see good global demand
 
As far as our JSA Select Pricing program our fall corn and soybean prices have concluded with fall corn futures vs the CZ7 at $4.02 and fall beans vs the SX7 at $9.74. We have not made any additional sales since the last update for the winter and summer periods but we are close to selling another round of winter beans vs the SH8 as it approaches $10.00. Given what we think we know about the crop and subsequent price action we are hopeful we can secure a $4 in front of winter and summer corn and a $10 in front of winter and summer period beans.
 
One final thought on where some of the recent support in the market has come from is the weak US Dollar. A weak dollar devalues crops sold in other currencies especially our chief competitors in South America.  With the dollar on multi year lows the value to producers in Brazil and Argentina have eroded and they remain tight holders. This is allowed us to get more competitive for exports in the near term, but there large crops are still there and will move eventually.
 
Thank you,
Brian Burke
John Stewart & Associates


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