Morning Comments; Tuesday, February 14th, 2018

Even though soybean harvest is getting underway in Brazil, we continue to see a wide range of production estimates being released. These range from 110 million metric tons on the low side to a larger 118 million metric tons on the high side. One reason for this spread is the ways in which data is collected to reach yield projections. This is especially the case on acreage, as we are seeing a spread of nearly 5% from high to low on Brazilian acreage estimates.

Just as much attention is being placed on Brazil’s corn production estimates. Last week the U.S.D.A. pegged Brazil’s corn crop at 95 million metric tons. This is considerably larger than the 88 million metric tons officials in Brazil are using in balance sheets. Yesterday a well followed crop scout pegged Brazil’s corn crop at 86 million tons. As with soybeans, the difference in these estimates is not so much from yields, but rather from expected acreage.

We are already seeing estimates released on what we may see in the Ag Outlook Forum conference at the end of next week, with a heavy focus on corn. Last year a 170.7 bushel per acre corn yield was released by this group, which ended up being nearly 6 bushels under the final number. This has generated ideas the forum could publish an initial corn yield estimate closer to 175 bushels per acre this year. Unless we see a substantial change to demand, this would greatly impact new crop balance sheets.

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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