March corn futures closed 13 3/4 higher today, finishing at $3.85 3/4, up 3 1/2 for the week. December corn futures were 8 3/4 higher today at $4.02 3/4, unchanged for the week.
March soybean futures gained 5 3/4 today but lost more than 16 cents for the week to close at $9.29 3/4. November futures were also up today, gaining 4 1/4, but losing more than 14 for the week to end at $9.60 1/2.
The major story this week was the signing of the Phase I Agreement with China. Up until the signing, there was a lot of optimism that China would have to start buying a lot more ag products from the U.S. since that’s what had been reported. But, the details say something a little bit different. Many people are focusing on the wording of 2 different phrases included in the agreement that states that purchases will be made “on commercial considerations” and “market conditions”. This is what led to the selloff we saw that knocked corn down about 11 cents Thursday; beans lost 13 on Wednesday and almost a nickel Thursday. All in all, getting this agreement signed is a big step. Ron DeJongh, Chief Commodity Officer Of Landus Cooperative, said this: “We applaud the signing of the first phase of a trade agreement with China this week. This provides a first step toward a more fair and open trade agreement long term with the largest customer in the world. Our farmer-members are more successful when free and honest trade opportunities exist. China is a major demand center for soybeans, corn and livestock producers. We look forward to continuing to advocate for our members by identifying domestic and international demand centers which elevate the value of their high-quality grain.”
Also, this week was news that the Senate had approved USMCA, the U.S./Mexico/Canada agreement. Jim Carlson, President of the Landus Cooperative Board of Directors said:
“Landus Cooperative applauds the U.S. Senate for passing the U.S./Mexico/Canada agreement. We look forward to final approval by our trading partners. As a farmer-owned cooperative, we ship, on average, between 15 and 20 million bushels of grain to Mexico annually. Our local livestock producers will benefit as well as our international customers; we have been exporting value-added dairy feed to Canada and Mexico for more than two decades. Our cooperative has been advocating for this agreement with our industry partners and thank our elected officials. Maintaining long-term, strong trade partnerships is imperative to the success of our more than 7,000 farmer-members across 26 Iowa counties.”
With regard to USMCA, here are some facts important to Landus:
- We Shipped more than 15 million bushels of grain to Mexico last year
- On average, we ship a grain train to Mexico every 7-10 days
- We can ship grain to Mexico from 10 locations
- A 110-car shuttle to Mexico equals 450 semi-trucks of grain
- We have been able to continually serve a customer in Mexico for the last 20 years
- On average, that one customer purchases 40 rail cars of SoyPlus each month
- 10-15% of our total SoyPlus sales go to Mexico; 30-50% of the cooperative’s total bean receipts are processed into SoyPlus.
- SoyPlus, is manufactured in Ralston, Iowa
- SoyChlor, is manufactured in Jefferson Iowa, and 15% of our total SoyChlor production goes to either Canada or Mexico today.
Here are some other things we are watching that impact the corn market:
- Ethanol production jumped to 322 million gallons last week. This exceeded the 312 million produced the previous week and is a 31-week high.
- Ethanol stocks increased again this week, this time by 23 million gallons to 966 million.
- Export Inspections were at the low end of expectations with 18.1 million bushels shipped.
For soybeans, here are items to keep in mind:
- Exports exceeded expectations, with 41.8 million bushels shipped last week, and also exceeded the previous week’s number of 38.2 million.
- U.S. crush remains strong, the December NOPA report showed a record for the month of December, with crush reported at 170.016 million bushels.
- the estimated ending stocks number is 475 million. It feels like that number could increase a bit before the end of this crop year with exports projected to decrease due to South American harvest around the corner.
Here are some events coming up:
- Monday, January 20th is the Martin Luther King, Jr. Holiday, so the CME and CBOT will be closed.
- Our Women in Ag event, Ventures, will be on February 15th in Ankeny. We will have the host of Market to Market, Delaney Howell, as our keynote speaker.
- The sign-up deadline for our 2020 averaging contract is in February. If you haven’t used this program in the past, please be sure to speak with your local GMA for details.
Please be safe this weekend, with heavy snow and high winds, travel could be treacherous.