January 2, 2018

There was some definition today in the cash market but no one is serious about making a trade. The bid/offers were about where they were before Christmas & 10-15 ct/bu between bid & offer.

The range of estimates on the amount of winter kill from weekend sub-zero freezing temperatures range from down 20 mbu to down 70 mbu. We’ve not had a year with these low of temperatures & no snow cover over such a large area. There were stations in Kansas that were below minus 10 and a couple minus 12-16 below zero. However, the country folks and warehousemen I’ve spoken with are more concerned about dryness & crop conditions than the possible winter kill. They realize they cannot define damage until this spring or at harvest, while other analyst & hedge fund types are trying to put a number of the possible loss and the impact on the b/s. My guesstimate for loss by state, after cutting 10%-20% by crop reporting districts after looking at temperatures were: KS down 54 mbu, OK down 7.0 mbu, NE down 8.0 mbu, & SD down 3.0 mln (assuming snow cover protected most of NE and SD). This is before the drop in crop conditions, but I’d suggest the market is thinking down 20-30 mbu and could this not be offset with a good rain. My SRW estimated loss would be 10-20 mbu range in IL/IN/OH/KY/MO, if anyone cares.

A few states are releasing their December crop condition ratings and perhaps folks will pay more attention to the drop in ratings from last month, than they did the freeze damage. Good to excellent ratings took a big drop: KS down 14, OK down 15, CO down 18, IL down 6, NC down 14.



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