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Karl Setzer Grain Commentary

Morning Comments; Thursday, February 22nd, 2018

Even though harvest is starting to increase in momentum in South America, we continue to hear debate over final crop sizes. This is more a case for soybeans where private analysts believe the Argentine crop will shrink from its current estimate. While this is possible, just as many believe the Brazilian soybean crop will expand and more than make up for those losses. As a result, we are actually seeing total South American soybean production forecasts rise instead of shrink.

The United States continues to see elevated demand for its corn in the global market, but analysts remain puzzled over who is actually buying the grain. Many recent corn sales have been to “unknown” buyers. The immediate reaction to this is that China is the buyer, or that it is Mexico ahead of any possible changes to the NAFTA agreement. Either of these is possible. The concern with either of these buyers is that the demand will not last and we will again fall short of our needed pace to meet yearly expectations.

There is a difference in this year’s market to those in recent history. This is a difference in where grain reserves are located. The global supply of corn, soybeans, and wheat is more than adequate, but stocks are not necessarily where they are needed. This will make freight costs more of a factor in export purchases than in most years.

Market Movers: Fund Activity, Technical Indicators

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