Morning Comments January 13, 2020

Agriculture Cereals Corn 1242 Pixels Free To Use

Opening Calls

Corn: Steady to 1 higher

Beans: 5 to 6 lower

At the end of last week we saw the USDA January reports which contained several surprises for the trade. Corn yield was raised from 167 to 168 bu. per acre with the trade looking for a 1 bushel per acre decrease. Harvested acres were reduced slightly to 81.5 million from 81.8 million. Perhaps the biggest surprises were the increase in feed usage, which was up 250 million bushels which was offset in large part due to the increase in last year's (2018) harvested acres with last year's yield being left unchanged. Ethanol demand was left unchanged with exports being decreased and feed and residual being increased. Net/net, ending stocks for 19/20 were down slightly, not the 200 million decrease most expected. 

The initial reaction to Friday’s report was bearish, but was offset by the increase in feed usage. Today, with the report behind us the trade will again turn their focus to export demand, or lack thereof, good weather in South America and the possibility of a large crop being planted in the U.S. this spring.

Changes to soybeans on Friday's report were less notable with soybean stocks down 494 million bu. from last year. Even with this reduction it will still be the second largest December 1st stocks on record. As with corn the trade will now be looking forward at South American weather and export numbers to set the tone. 

Be sure to speak with your local GMA for further information on how this report has affected the markets. We are now offering an average price contract that can help you to begin marketing next year's crop.