New corn carryout suggests a sizeable move higher in fair value, new level is 520 minimum

Corn – New corn carryout suggests a sizeable move higher in fair value, new level is 520 minimum

↑ Friday’s USDA report cut carryout by 198 mil bu, that new level of 1.540 now raises the fair value

level to a minimum of 520, the last time corn posted a carryout of 1.500 old crop was trading at $6

↑ Friday’s report was most importantly the January crop report which means the numbers seen Friday

are essentially what is now written in stone, only very minor adjustments would be expected

↑ Funds have been buying corn for 6 months and there is little reason for them to slow now

↓ Previous crop reports have seen a pullback right after the release of the numbers from fear trade, we

will see if that happens again to cause a short term setback, might be less likely this time around though

Beans – New carryout of 0.380 suggests a fair value around 1100, ARG sees an improvement in rains

↑ Friday’s USDA report cut carryout by 90 mil bu, that 0.380 suggests a new fair value around $11

↑ Also with beans this report has more of a lasting impression due to the fact these numbers will not be

changed again or if they are it will be small and likely months down the road

↓ ARG and southern BRA see an increase in the 10 day rain forecast, rains move in on day 7

↑ Friday’s report lowered the US crop enough to suggest a carryout that is supportive from current

price levels even if BRA produces a record crop

↔SA beans now into the key reproductive phase, the next 3 weeks will be the most important maps

Wheat – Carryout raised 3 mil bu, last night followed other grains, US dollar to new 2 year highs

↔Carryout was raised 3 mil bu on Friday, keeps fair value around 570 which is still higher than current

↓ Last night the US dollar continued higher making new 2 year highs

↑ Most of last night’s support looked tied to following corn/beans, wheat is still underpriced however

Cattle – Cash traded mostly 203 NE and 200 KS/TX, BB and feeder index both continue higher

↔Friday’s PM BB was choice +2.06 select +5.79 packer BE at 205.42, packer cushion $8.85

↑ The strong cash trades of 203 NE and 200 KS/TX should help keep support in this market to start

↑ Both BB and the feeder index continue higher, neither showing signs of slowing just yet

↑ Packer profits at 8.85 are the highest in months, today’s average cash trade report will lower that

number but it will still be at a level considered strong compared to the last 6 months

↔As of Friday’s latest update, no set date has been released for the Mexico border opening, this along

with BB and the feeder index are all positive factors but need to be watched daily for any changes