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Weekly Market Recap

11/10/2017 4:55:20 PM
By Joe Lardy



China is planning to remove a value added tax on DDGs. China was our main export customer for
several years but tariffs have reduced exports to China to basically zero for the past year. This is great
news for the DDG market. US corn inspections were terrible with the 2nd lowest total of the year.
Inspections are well behind the USDA pace and have fallen behind the 5 yr average. Corn export sales
were a different story posting an enormous number. Sales of 2.4 million tons were almost double
expectations. Mexico was a huge buying taking 1.2 million tons this week. The WASDE report was a
surprise for the corn market. The USDA raised yields way above expectations to 175.4 bpa. This is a
new all-time high record yield. Big jumps were seen in every Corn Belt state except Nebraska between
the October and November reports.


Soybean planting in Brazil is now right about average, but behind the pace of last year. Seasonal rains are
forecasted for the main growing areas in the next couple of weeks but a return to a dryer pattern is seen
longer term. The US has finalized duties on imported bio-diesel from Argentina and Indonesia. The duty
on Argentine biodiesel jump up sharply from those originally proposed to roughly 72%. US soybean
inspections were very strong at nearly 2.5 million tons. This is the third straight week of inspections over
2 million tons. Soybean export sales dropped off sharply this week to register the 2nd lowest total of the
year. The WASDE report was very uneventful for soybeans as the government left everything unchanged
except a minor 6 million bushel cut to total production. The market was looking for a slight cut to bean
yields so an unchanged numbers was looked at negatively by traders.


Egypt bought more Russian wheat in their latest tender with the US not even submitting an offer.
However, there have been strong rumors of increased high protein wheat business done elsewhere which
has helped support the Mpls. wheat market. US wheat export sales showed up in force with the highest
sales total of the year at almost 800,000 tons. The WASDE report was uneventful for wheat as the focus
was on the row crops. The USDA did raise exports by 25 million bushels from 975 million to 1 billion


Cash cattle trade was uneventful this week trading around $124 which was just $1 lower than last week.
Boxed values picked up a little this week moving from $209 to $214 for choice beef.

WTI is set to close higher for a fifth straight week. This weeks higher move was highlighted by
Mondays gains after weekend arrests in Saudi Arabia are viewed to consolidate power for Mohamad bin
Salman, who is supportive of an OPEC cut extension. US sanctions were placed on Venezuelan officials
yesterday, but the government has not gone as far as banning imports of Venezuelan crude. According to
AAA, gasoline at the pump averages $2.558 per gallon. A month ago prices averaged $2.494 and $2.201 a
year earlier.

The right decisions for the right reasons.

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