Jan 13, 2021

Overnight, corn gapped 5-6 higher on the open and beans set new contract highs on continued support from a bullish WASDE report yesterday.  Yesterday also saw Argentina lift their 60-day corn export ban after only 2 weeks and rumors of China buying US corn.  We were cautiously pessimistic on corn prior to the report but, with a lot of questions now answered, we see a realistic possibility of $6 futures on the July contract month.  We mentioned last week the need to protect basis because higher prices are typically met with slower demand.  After yesterday's limit-up move in corn, basis across the country widened 5-7 cents overnight.  We had another 8am sale announcement this morning of 464,300 tonnes of soybeans split between the current and 21/22 marketing years.  Today's 12 lower close on beans can be credited to profit taking following yesterday's 46 cent higher move.  Continue to use target pricing on new crop and scale up sales.  The national drought monitor, current export demand, and S. America crop conditions have a lot of us bulled up on new crop 2021 prices but we need to remember that almost 7 million acres of prevent plant in 2020 will likely be back in production in 2021 if our dry weather holds.  Also, current trade agreements with China are based on total dollars.  This means China is obligated to an ever-shrinking volume of US commodities as prices rise.

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