Will bullish trend hold up with a big South American harvest?

By Jon Scheve, Superior Feed Ingredients, LLC

Arguably the second or third most important USDA report of the year was released Jan. 10. It was probably the most bullish it could have been for corn and beans.

Corn

Surprisingly, the corn yield decreased 3.8 bushels from November and dropped the carryout to just above 1.5 billion. Considering the yield reports during harvest that I received from throughout the U.S., I was shocked by this yield drop.

Before the report, March corn seemed to be trading a 1.5- to 1.6-billion bushel carryout. The question now is if the market may have overdone it just a little bit with the 15-cent rally.

Corn basis

The basis market throughout the U.S. immediately pulled back as farmer orders were hit and corn sales began piling up. If the U.S. is tight on supply, then basis long term can’t continue to pull back or stay low.… Continue reading