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BRIAN HOOPS

Syngenta may have to pay up

April 6, 2018
Farm News

If approved by a federal judge, Syngenta will pay the largest agricultural litigation settlement in U.S. history.

A total of $1.5 billion will be split between four groups: growers who bought Viptera Duracade corn, those who did not, grain handling facilities and ethanol companies.

China rejected U.S. corn shipments in 2013 due to the presence of the biotech hybrid, sending the market lower. If the settlement is approved, payments could be made in 2019.

Corn analysis

Corn closed the week $.10 3/4 higher. Last week, private exporters did not announce any private sales.

Weekly export sales of corn showed a total of 64.6 mb (1,640,100 mt) with 53.3 mb (1,353,100 mt) for the 2017-2018 marketing year. This put total marketing year sales at 1.829 bb, 2 percent less than the previous marketing year. In the weekly EIA report, Crude oil stocks increased 1.6 million barrels while the trade was expecting a 800,000 barrel increase and ethanol production was 1,039,000 bpd vs 1,049,000 bpd last week.

In the quarterly stocks and acreage report, NASS forecast acreage at 88.0 million, down 1.3 million acres from trade expectations and 2.2 million less than a year ago. Using a trendline yield of 174 bpa, the U.S. would produce a crop of 14.041 bb, 560 mb smaller than a year ago. Useage for 2018 is projected at 14.520 bb, meaning this year we will finally cut into the large carryover stocks numbers with stocks estimated at 1.703 bb.

March 1 corn stocks were bearish at 2 percent larger than trade expectations at 8.888 bb and record large.

Strategy and outlook

As producers get planters out of their sheds and begin seeding the 2018 crop, look to either make sales and reown with call options or buy puts to establish a price floor.

Soybean analysis

Soybeans closed the week $.16 3/4 higher. Last week, private exporters announced sales of 398,500 mts of beans to an unknown destination and 120,000 mts meal to Spain.

Weekly export sales of soybeans showed a total of 14.2 mb (387,200 mt) with 11.7 mb (317,500 mt) for the 2017-2018 marketing year. This put total marketing year sales at 1.850 bb, 8 percent less than the previous marketing year. In the quarterly stocks and acreage report, NASS forecast U.S. soybean acreage at 89.0 million; 1.1 million less than a year ago which shocked the trade as it was expecting an increase in soy planted acres.

Using a trendline yield of 48.5 bpa; the U.S. would produce a crop of 4.287 bb; while usage is projected at 4.415 bb and will lower ending stocks to a projected 452 mb. U.S. soybean stocks were projected at a record large 2.107 bb.

Strategy and outlook

As producers get planters out of their sheds and begin seeding the 2018 crop, look to either make sales and reown with call options or buy puts to establish a price floor.

This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution's Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.

Brian Hoops can be reached at (605) 660-1155.

 
 

 

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