The cash markets were up this week, posting modest gains.
On average, corn gained 2 3/4 cents per bushel, securing the fourth week of gains. Ethanol plants saw positive movement as well up 5 1/2 cents. Ethanol production was off slightly by about 2,000 barrels at 1.01 MBPD. Stocks were lower as well, 504,000 barrels less than last week. Corn along the river gained 1 cent moving only slightly higher.
Soybeans gained an average of 2 cents per bushel. Crush facilities fell slightly by 1/2 cent this week. Palm oil hit a 4-year high on Thursday and continues to provide some support for soybeans. Soybeans along the river regained last week’s losses gaining 8 3/4 cents.
Grain futures closed November by moving lower. Corn was off 16 3/4 cents, soybeans off 4 1/2, and wheat down 28 1/4 cents.
On Monday, USDA’s crop condition for the US wheat crop held steady at 58 percent, unchanged from last week, but slightly better than last year’s reading of 55 percent. However, Plains states of OK/KS/TX saw declines in key HRW wheat conditions.
On Tuesday, USDA released their long-term forecasts for agriculture. Looking at their 2017 acreage numbers, expectations are for a big drop of 4.5 million acres in corn, while soybean acres are up only 1.8 million.
The forecast for the next week in South America will feature drier conditions in most crop areas as a strong high pressure system drives the weather pattern for at least five days. This high-pressure system will bring a brief pulse of moderately warm temperatures through Argentina and Brazil, but the strongest influence will be the suppressed rainfall as Argentina, Southern Brazil, and the eastern half of Center-West Brazil receive 0.4-1.2 inches below normal precipitation through the next 10 days.
Russia is expected to have another big grain crop in 2017, adding to a record crop this year and increasing pressure on prices, SovEcon told a conference on Wednesday. SovEcon also reported the first major industry estimate saying Russia could harvest 112.5 million tonnes next year compared with a record crop of 119.5 million tonnes expected this year.
On Wednesday, a state planner official reported China’s grain production will fall by 2.5%, or about 15 million tonnes, in the years leading to 2020 as the government withdraws severely polluted or degraded farmland for rehabilitation. Under the proposal, around 5 million hectares of land – about 4% of the country’s total arable land – will be taken out of production and either rehabilitated or turned over to forest or grasslands.
Palm oil was up overnight hitting a 4-year high on Thursday, while China soybeans posted modest gains but continues to be the highest it’s been in a year. China is reported to be doing most of its buying out of Brazil and only doing modest shopping with the US.
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