Farmers Cooperative : Jan 13, 2016 Good morning! Overnight markets were mostly quiet following yesterday’s post-USDA report… more

Good morning!

Overnight markets were mostly quiet following yesterday's post-USDA report rallies. The overnight range in the corn trade was just 2 ½ cents, while soybeans traded a 4 ¾ cent range. Both grains are higher as we enter the office, with corn up a penny at the break and beans 2 ½ cents higher thus far. Outside markets are a bit supportive so far, as oil is up 80 cents, and US equities are starting to climb back higher.

The market-mover from yesterday of course were the USDA production/stocks/S&D reports. Although the updated numbers weren't overly bullish, a round of buying ensued following their release, as the reports were less bearish than expected. US corn production was cut by 53 million bushels, due to a reduction in average yield from 169.3 to 168.4, but reductions in demand more than offset the decrease in estimated production. Reductions were made in both corn exports, as well as corn used for food/seed/industrial (FSI). Overall, the corn ending stocks estimate actually increased by 17 million bushels, now just a shade over 1.8 billion bushels. It is worth noting that despite the reduction in average yield nationally, the Iowa corn yield was actually raised by 3 bushels/acre to 192 bu/ac.

National soybean production was also cut by 51 million bushels, using a 600k acre reduction combined with a 0.3 bu/ac reduction in average yields. Like corn, soybean exports were also lowered due to a slow start to the marketing year, but ending stocks were lowered by 25 million bushels, now estimated to be 440 million bushels.

Overall, enough interest was garnered by the funds to spark a short-covering rally yesterday, and both corn and beans look to open higher again today.

Opening calls

Corn: 1-2 higher

Beans: 2-3 higher

Have a great day!

@fccopgrain