Headline
Grains mixed in the overnight. Trump closer to proposing revisions to RFS. Bullish corn trend still intact.
Summary
Corn prices traded slightly lower in the overnight. The trend for higher corn prices is still intact despite the pullback in Friday’s trade. Multiple support levels are just below current prices. The December contract is currently trading at the 20 day MA and prices are also trading at previous resistance level from April 2nd and 10th. Trendline support is around $4.07 and the 50 day MA sits at $4.09. The July KC Wheat contract slipped another 4 cents in the overnight on improved weather outlook in the Plains. Precipitation on Wednesday and Thursday should bring some moisture into some of the driest areas of the winter wheat crop. Some short covering in soybeans this morning as prices reached the bottom side of the range it has traded in since March 7th.
Trump Close to Proposing Changes on U.S. RFS
The Trump administration says it is in the last stages before proposing changes to the U.S. Renewable Fuel Standard. The changes would include a temporary lift in the ban on sales of higher ethanol blends during summer months. This could make E15 available year round and improve ethanol demand. The plan will propose counting ethanol exports toward the annual biofuels quota and reducing the number of small refinery waivers.
Brazil
The Brazilian oilseed group Abiove increased Brazil’s 2017/18 soybean production forecast to 118.4 MMT. This compares to the latest USDA forecast of 117 MMT. Abiove also increased Brazil’s soybean export forecast to 71.2 MMT. USDA’s May forecast estimated 73.3 MMT of soybeans would be exported from Brazil in the 17/18 crop marketing year.
Argentina
Corn and soybean harvest has been slowed by humidity and precipitation over the last week. Corn harvest has progressed into the center of the Agricultural area. Soybean harvest was 66.7% complete last Thursday, while corn harvest was only 33.3% complete. The Buenos Aires Grain Exchange maintains their soybean production forecast at 38 MMT (May USDA 39 MMT) but believes it is possible that recent weather has made further reductions in the crop.
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