The cash markets saw relatively small gains this week with basis along the river beginning to taper off.
On average corn gained 1 1/2 cents per bushel, slowly grinding higher for the third week in a row. Ethanol plants saw gains as well up 2 1/4 cents. Ethanol production was off slightly, down 3,000 BPD. Even so, stocks remained high gaining 343,000 barrels. Corn along the river remained unchanged from last week.
Soybeans held onto last week’s numbers remaining unchanged both nationally and at crush facilities. Soy oil continues to get a boost from strength in palm oil market. Wednesday saw the largest movement higher for soy oil futures in the past year. Soybeans along the river saw relatively large losses this week, off 5 1/2 cents per bushel.
Corn and soybeans saw strong movement from last week. Corn gaining 8 3/4 cents and soybeans surging higher with a 44 3/4 cent gain. Wheat was off 1 1/2 cents from last week.
Strong US exports and a robust demand from China sent soybean prices sharply higher on Monday. China’s October crush surged 24% year-on-year as the country continues to have a vigorous appetite for soybeans. China is said to be shopping for US beans to reduce shipping time from the US Gulf.
Looking at export competitiveness, US corn values were higher in against Europe, the Black Sea, and Brazil over the past week. In wheat, the US gained some competitive ground against Argentina and Europe, but fell against the Black Sea. US soybeans managed to improve on the week against Brazil and Argentina.
South African farmers are expected to bolster corn plantings by 35% over last year. South Africa’s Crop Estimates Committee (CEC) is expected to forecast the planted area at 2.62 million hectares, 35% higher than 1.947 million hectares planted last year, according to an average estimate of five trading houses polled by Reuters.
Brazil is expected to see favorable moisture over the next two weeks, while Argentina is expected to net drying in portions of the south and timely rain in the north late this week and into the weekend that will maintain favorable crop development conditions.
On Wednesday, the US Government announced finalized targets for bio-fuel use for next year, requiring that energy companies blend 19.28 billion gallons of renewables into the nation’s fuel supply. The Environmental Protection Agency (EPA) in a statement set the target for conventional bio-fuel, or ethanol, at 15 billion gallons and the advanced bio-fuel target at 4.28 billion gallons for 2017. The agency set the mandate for biomass-based diesel at 2.1 billion gallons for 2018. That compares with the total 18.8 billion gallons the Environmental Protection Agency proposed in May and would be up 6 percent from this year’s 18.11 billion gallons.
The USD got a boost from the US Durable Goods report which showed a pick-up in spending by 4.8% as expectations had been for only a 1.5% boost.
Crude oil got a boost to start the week on discussions by OPEC members with Iran to reach an output cut. Both sides discussed the prospects of upholding a production ceiling proposed in September in Algeria and, if it’s formalized, Iran’s oil minister said crude oil prices could rally up to 25 percent.