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Karl Setzer Grain Commentary

Closing Comments; Friday, February 16th, 2018

Trade was on both sides of unchanged today, with little interest being shown in establishing new positions. The most interest in today’s session was getting positions shored up ahead of the long weekend, as markets are closed next Monday for the President’s Day holiday. Technical indicators are giving the market mixed outlooks which further limited trader interest. The market did take light support from outside markets and ongoing weather concerns in South America.

Even though we have seen solid export numbers in recent weeks, export loadings on both corn and soybeans are worrisome. Marketing year to date corn loadings are down 33% from a year ago. This is twice the decline in exports that is being forecast by the USDA. Soybean loadings are down 14% from last year with only a 1% decrease being forecast. There are thoughts these numbers will be corrected though as demand will increase as they year progresses.

There is also some doubt over how long this export demand will last, mainly on soybeans. China has been an active buyer of Brazilian soybeans for March and April delivery this week. One benefit the United States does have is a lack of pressure from Argentina. This could mean any decline in soybean sales is temporary and will resume as the year progresses.

What we are really seeing in the global soybean market is not a shortage of soybeans, but a dislocation of inventory. This is most apparent in South America where the large Brazilian crop is negating losses to the Argentine crop. In fact, total South American soybean production is likely to be larger than a year ago, with more soybeans in Brazil and fewer in Argentina. This development will put more emphasis on logistics when determining a global value of the soybeans.

March corn futures finished today’s session cent lower at $3.67 , March soybeans were 2 cents lower at $10.21 , and March wheat in Chicago was down 4 cents at $4.57 .

For more information, you may contact Karl Setzer at 1-800-383-0003, or e-mail at opinions and views expressed in this commentary are solely those of Karl Setzer. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.

Market Commentary provided by:

Karl Setzer, CTA
Grain Solutions Team Leader
MaxYield Cooperative
West Bend, IA 50597

Phone: 515-887-7211