MORNING COMMENTS

July corn   Down 3    $4.46 ¾

July beans   Down 6 ¼      $9.07 ¼

The DOW is up      $26,524

USD is weaker    $96.62

Crude oil is mixed    $53.96

 

Good morning,

Corn  traders are trying to determine the next step. A few bulls have opted to take profits as the market pushed to a fresh 5-year high. Bears continue to talk about demand destruction and a market that might be out ahead of itself. There’s a lot of talk inside the trade as off late that the Brazilian crop is going to exceed +101 MMTs and exports could push to 38 MMTs vs. exports of just 24.8 MMTs last year. We are also hearing talk that some Brazilian corn cargos might soon be coming to the U.S.

Soybean  traders continue to debate U.S. acres. Bulls are saying we are moving well beyond the traditional planting dates and yield-drag could be much more significant. There’s also talk that re-planted acres are struggling to emerge and may have more complications than originally anticipated. Bears point to the obvious, a massively burdensome balance sheet, a worrisome Chinese trade dispute and a vast amount of uncertainty brewing around African Swine Fever.

Vietnam has culled more than 2.5 million pigs to contain the spread of an African swine fever outbreak that is in danger of infecting every province of the country, an agriculture ministry official said. A second senior official at the department said that it was “only a matter of time” before the disease spreads to all 63 provinces, but did speak anonymously as they are not authorized to speak to the media.

Farmland, until 2007, had been largely held by small family owners and somewhat difficult for the financial industry to access. That changed in the wake of the stock market collapse, when institutional investors, including foreign entities, became much more eager to find new places to park money and gain stronger and safer returns. Interestingly, this happened at the same time owners of farms were aging and many were looking for a way to get cash out of the farming operations they’d built. This has lead to nearly 30% of farmland now being owned by non-operators, including the nearly 30 million acres of U.S. farmland held by foreign investors. Even though that’s only around 3% of the total number of farm acres in play , the percent of foreign farm ownership has doubled in the past two decades and it’s beginning to catch more notice. It’s worth mentioning, that as foreign investors continue to buy U.S. farmland there are no federal restrictions on the amount of land that can be foreign owned, meaning it’s been left up to individual states to decide on any limitations. Our farm real estate contacts have told us, a few years back there were 20 to 25 bidders showing up at the land auctions, now it’s more like 5 to 10 at best, with buyers coming from all over the country as well as corporate agents from across the globe. With individuals and families showing up in smaller numbers at the auctions we leave the door open for foreign buyers. My intention isn’t to be an alarmist, but rather bring to the surface specific issues that could play out should the trend continue. For instance, there exists the possibility that once in the hands of a foreign entity that American owners may not get the chance to ever own the land again. There’s also the fear that once foreign-owned that the acres could be taken out of production. I should mention, if that happens, losses could be felt all the way down the line to rural communities where jobs could be in harm’s way. Another significant issue and one I’ve personally spoken to producers about is the water rights issues. I’ve heard from producers in Arizona who are already seeing questions raised in the cotton, cattle and dairy space where a large number of acres in certain parts of the state are owned by Saudi Arabia. (Source: newfoodeconomy , NPR, will.illinois.edu)

MORNING COMMENTS

Good Morning    

Current Markets as of         8:00     Tuesday, June 18, 2019

 

Month                                            High                                 Low                        Change                               Last

July 19 Corn                               $4.58                             $4.42 ¾                    $ – 7 ¾                                $4.47                                                             

Dec 19 Corn                               $4.71 ½                         $4.56 ¾                     $ – 7 ½                                $4.61                                                                       

July 19 Beans                           $9.21 ½                         $9.02 ¾                     $ – 5                                    $9.07 ¾                          

Nov 19 Beans                           $9.48                             $9.29 ½                      $ – 4 ¾                               $9.34 ¾    

  

Oil    $52.10   Higher      Gold   $1,353   Higher     Dow $26,272   Higher      Wheat $5.28 Lower 

The Des Moines ethanol low rack price is $1.6305. This is $0.1941 lower than the unleaded gas low price of $1.8246. 

Dec Corn Support is $4.54 and resistance is $4.74.  Nov Beans Support is $9.25 and resistance is $9.60. Funds bought 25 Million (5,000 Contracts) of corn and bought 60 Million (12,000) contracts of beans Monday. Close to 300,000 contracts traded last night. 

National corn planting progress came in at 92% complete this week, up from 83% last week but behind 100% both last year and on average; corn emergence rose from 62% to 79% done, versus 97% both LY and on average, while crop ratings were steady this week at 59% good/excellent (down from 78% LY and the 71% 5YA). Soybean planting rose from 60% to 77% this week, below 96% LY and the 93% 5YA, with emergence of that crop up from 34% to 55% this week, below 89% LY and the 84% 5YA. Winter wheat heading and harvesting remained behind pace at 89% and 8%, respectively, with ratings of that crop steady this week at 64% g/ex (up from 38% LY and the 44% 5YA figure). Spring wheat ratings fell 4% this week to 77% g/ex. Yesterday’s May NOPA soybean crush came in at 154.8 million bushels, below the average trade estimate at 162.5 million bushels and more than two million below even the most pessimistic trade guess; that was down from 160.0 mbu in April and 163.6 mbu last May (the all-time high for the month). 

Weather: 24-hour rains were lighter across the Plains and belt with scattered action on the way this week, then better coverage and amounts across this coming weekend into the 6-10 day time frame. 11-15 day forecast maps are still running warmer, with wetter weather north and drier conditions south 

EARLY MARKET FEATURES

 

Weather forecast is warmer and drier past June 26th.

Two-day FOMC meeting begins today.

US seeding pace remains slow, new crop quality issues become a concern.

Have a great Tuesday!   Darren, Brady and David

Gold-Eagle Cooperative Providing Quality Services and Products Innovatively, Profitably, and Professionally. 

Morning Commentary

July corn up 8 ¼ at $4.6125

July beans up 13 ¾ at $9.105

The DOW is up

USD is weaker

Crude oil down $.26 at $52.25

Good morning,

Corn  bulls continue leading the market! New-crop prices closed last week +80 cents higher than compared to last year at this time. On the flip side, bears are poignant to weaker than expected export demand and potential demand destruction in both ethanol and feed if prices continue higher. There’s been a lot fo talk inside the trade about the historical tendency for corn yields on acres planted after May 30th to be down roughly -12% to -15%, and corn planted after June 10th to show a yield drag of roughly -18% to -22%. Obviously, these estimates are big generalities and a shot in the dark, as weather moving forward is still a complete unknown and a huge wild-card. The short term trend for July corn is bullish. The market is poised to trade 465.5 in the near term (the overnight high was 464.25). Closing below 429.25 signals a correction. My (ABN Amro) long term target is 560.5 for spot futures. 5,000 lots less long than indicated by the trade count, the CFTC said the fund was long 67,000 corn as of June 11th. Funds are now thought to be long 163,000 lots. Index funds increased their net long by nearly 20,000 contracts during the last reporting period.

Soybean  bulls remain up to bat as traders keep a close eye on U.S. planting progress. Regardless of what happens moving forward, there was more than 75% of the entire soybean crop “unplanted” as of May 20th. Many states start to see reported yield drag on acres planted after that date. FarmDoc Daily indicated in one of their studies last week, that field trials in Illinois where showing yield losses higher than -10% on acres planted after May 20 with increasing yield losses as planting moved deeper into June. They noted planting after June 10 could led to an almost -20% yield drag. For what it’s worth, the USDA estimated close to 33 million soybean acres were still unplanted as of June 9th. From what I understand, several sources are thinking China has already culled nearly 100 million pigs, which is larger than the entire U.S. hog population. A Rabobank report recently estimated it would take over 5 years for China’s pork production to recover fully from ASF. The short term trend for July beans is bullish. The market achieved our short term target at 910.5 overnight. Stable action above 894.5 implies a run towards 950. Closing under 873.25 signals a correction. 13,000 less short than indicated by the trade count, the CFTC said the fund was short 115,000 beans as of June 11th. Funds are now thought to be short 81,000 lots.

 

Morning Commentary

July corn up 5 ¼ at $4.4725

July beans up 4 at $8.92

The DOW is down

USD is stronger

Crude oil down $.09 at $52.19

Good morning,

Corn  bulls are talking about a possible short squeeze in the frontend of the market, the JUL19 contract, which is challenging a 5-year high. In above average volume, preliminary open interest surged another 36,000 lots!  The best gains came in Sep (37K lots) and Dec (23K lots).  The trade count had the fund buying 38,000 corn.  Funds are now thought to be long 126,000 lots.  If realized, the fund holds the largest long position in a year.  The short term trend for July corn is bullish.  The market is poised to trade 465.5 in the near term.  Closing below 420.5 signals a correction. 

Soybean  bulls are keeping a close eye on further delays in U.S. planting, especially in parts of the eastern belt where more rains are in the forecast. There’s also been more talk of producers having to replant soybean fields. In below average volume, preliminary open interest surged 21,000 lots!  The best gains (14K lots) came in Nov.  The trade count had the fund buying 10,000 beans.  Funds are now thought to be short 103,000 lots. The short term trend for July beans is bullish.  The market is poised to trade 910.5 in the near term.  Closing under 863.5 signals a correction. 

Brazil’s government said it has lifted a suspension of beef exports on China after dealing with an atypical case of mad cow disease, which ultimately sent shares of Marfrig Global Foods, Minerva SA, and other Brazilian meatpackers soaring. Keep in mind, the suspension had been in effect since June 3rd after a case that was reported in a 17-year-old cow in the state of Mato Grosso. From what I understand, cases can arise spontaneously in cattle herds and usually in animals 8 years old or older.

The latest data from the U.S. Grains Council shows just how important ethanol has been to U.S. ag exports over the past 10 years. In 2018, U.S. ethanol exports totaled more than +1.7 billion gallons or the equivalent of +600 million bushels in corn, valued at nearly $3 billion. Using trade data on 47 different agricultural and ag-related product groupings tracked by the USDA FAS via the Global Ag Trade System (GATS), analysis reveals the volume of ethanol exports grew by +18% per year over the past five years and +13% per year over the past 10 years. Growth for each group was calculated on a five and 10-year trend line and then adjusted for volatility. Of the 47 groups evaluated over the past five years, 21 showed negative growth over the period. The rest increased, but at a slower rate than ethanol. This data falls in line with increasing ethanol trade globally and demonstrated why ethanol market development is so important to U.S. farmers and ethanol producers. In another sign of competitive strength, the U.S. share of world ethanol exports reached a record 61% in 2018, which is up from only 9% a decade ago. Over this period, the United States has gone from the world’s largest ethanol importer to the world’s largest exporter! The U.S. Grains Council has been an important driver of foreign market development activities in partnership with USDA’s FAS, Growth Energy, the RFA and state corn organizations. They now have efforts in 40 different markets funded by the ethanol industry, corn growers and exporters programs. What these programs try to do is educate other markets on the value ethanol can add. When they understand that ethanol has fewer emissions, higher octane value and costs less than fossil fuel alternatives, it’s a real win in developing foreign markets around the world. I’m personally curious if we can keep this pace and the title of being the world’s global supplier? I’d love to argue yes, and I believe we will be for many more years. Perhaps the bigger question is when other nations start to build out more of their own corn-based ethanol plants, like we are seeing South America, China, etc… will they purchase their corn needs from the U.S. or look towards lower cost producers in Argentina and Ukraine? There’s also the looming cloud of questions surrounding electric vehicles and how much market share could be taken from ethanol? I know some want to argue we’ve now seen peak ethanol export for the U.S., but I don’t think that’s the case at all. In fact, I see exports being the main driving force for the industry during the next few years. Further out on the horizon, it’s really tough to forecast. (Source: USDA, FAS, USGC)

 

Morning Commentary

July corn up 8 at $4.38

July beans up 5 at $8.83

The DOW is up

USD is weaker

Crude oil up $.1.90 at $53.04

Good morning,

Corn  bulls are hoping to start a stampede! Technical guru’s are saying we need to take out the recent high in the JUL19 contract at $4.38 (and we did it this morning ) and the DEC19 high at $4.54 per bushel to trigger a “running of the bulls”. Ethanol demand on the week was stronger than most in the trade had been expecting. At the same time, U.S. ethanol stocks declined by -800,000 barrels and are now almost -2% below a year earlier. Today, the trade will be watching the weekly export numbers.

Soybean  bulls are trying to push the market beyond last weeks highs. The JUL19 contract is trying to climb above $8.94^4, while the NOV19 contract is trying to break above $9.21^2. Personally, I think we need to get back above $9.10 in the JUL19 contract and back above $9.30 in the NOV19 contract.

The size of the live pig herds in China dropped further in May this year while the herds of fertile sows also shrank. The number of live pigs was down more than 4% compared with April, marking a nearly 23% decline compared with May 2018, according to the latest data published by the Chinese ministry of agriculture and rural affairs. The number of fertile sows in May also fell over 4% month-on-month, nearly 24% lower than the equivalent month last year. Since the start of May this year, China has reported eight more outbreaks of ASF across five provinces in western China, taking the total number of outbreaks to 130 since August last year. (Source: AgriCensus) 

USDA officials adjusted the production forecast for hogs by increasing exports projections for 2019 by 220 million pounds. Removing the Mexican tariffs was mostly responsible for the higher export numbers, but it’s worth mentioning that the USDA trimmed a $1 from its 2019 average cash hog price outlook. With the Mexican tariffs gone for now, the 2020 pork export outlook was also raised by 270 million pounds to 6.945 billion pounds.

 

Morning Commentary

July corn up 1 ¼ at $4.29

July beans up 2 ¼ at $8.615

The DOW is down

USD is stronger

Crude oil down $1.42 at $51.85

Good morning,

Corn  traders are adjusting to the latest balance sheet updates by the USDA. The U.S. planted acreage estimate was lowered by -3 million to 89.8 million. The U.S. average yield estimate was more dramatically reduced, lowered by -10 bushels per acre from 176 down to 166 per acre. Total U.S. production is lowered from 15.030 billion bushels down to 13.680 billion. Let’s keep in mind, “harvested acres” were only dropped from 85.4 million down to 82.4 million. The USDA already elected to lower total demand by -425 million bushels, cutting feed and residual demand by -300 million, and lowering U.S. exports by -125 million. Imports are raised by +15 million bushels. . In total, new-crop ending stocks are slashed by a whopping -810 million bushels to 1.675 billion, which if realized, would be the lowest ending stock number since 2013/14. The short term trend for July corn is bullish.  Stable trade over 426 alerts for a return to trending advances.  Closing below 415.75 signals a correction. 

Soybean  traders could be more confused than ever as the USDA elects to leave total new-crop acres and yield “unchanged”. The USDA did cut -75 million bushels from old-crop soybean demand, which caused ending stocks to jump higher by +75 million bushels from 970 million to 1.045 billion. The 2019/20 soybean global ending stocks are lowered just slightly by -0.4 million tons.  The short term trend for July beans is neutral.  Closing under 846.5 signals a deeper correction.  Stable trade above 876.75 will signal renewed rallies.  

Farmers National Company Seeing Uptick in Farmland Sales: After six years of a downturn in the ag economy and expected overall net farm income for 2019 projected to be down -50% from 2013, Famers National Company is seeing an increase in the number of sales by financially stressed growers.

 

Morning Commentary

July corn down 3 ½ at $4.1225

July beans down ¼ at $8.5825

The DOW is up

USD is stronger

Crude oil up $.64 at $53.90

Good morning,

Corn  traders are eager to see today’s USDA report. Bulls are wanting to start seeing production cuts, while bears are wondering how much demand destruction is going to start creeping into the forecast. The USDA had been projecting a total U.S. corn crop of +15.0 billion bushels vs. the trade now talking a wide range of estimates between 11.5 and 14.5 billion bushels. Most suspect the USDA takes a more conservative and methodical approach to reducing their production estimate. According to the USDA numbers, we currently have +15 million corn acres still unplanted. Keep in mind many of these unplanted acres are in strong producing regions of the country. Illinois still has 27% of their crop unplanted; Indiana and Michigan each 33% unplanted; Missouri 19% unplanted; Ohio 50% unplanted; South Dakota 36% unplanted; Wisconsin 22% unplanted. At the same time, the USDA shows U.S, corn conditions rated 59% “Good-To-Excellent” vs.  77% of the crop rated “Good-to-Excellent” last year. The trade count had the fund buying 3,500 corn. Funds are now thought to be long 35,500 lots. The short term trend for July corn is neutral-positive. Stable trade over 426 alerts for a return to trending advances. Closing below 406 signals a deeper correction.

Soybean  traders seem somewhat confused.  In the May report, the USDA was talking a 49.5 bushel average yield with total production around 4.150 billion bushels. Now the trade is talking a 49.0 bushel yield and total production still right around 4.150 billion bushels. In below average volume, preliminary open interest was unchanged. The trade count had the fund buying 5,500 beans. Funds are now thought to be short 130,500 lots. The short term trend for July beans is neutral. The market is in a correction phase. Closing under 845.75 signals a drop toward 831.5-829.75.  Stable trade above 876.75 will signal renewed rallies.

Cattle, cash fed,  traded over 100,000 head again this past week on yet again lower prices. The show lists for cattle to be sold this week reflected the cash movement as Nebraska numbers we down over 20,000 hd. Some of the friendly points to be made in the current setup is packer profitability keeping feed yards current, carcass weights at a seasonal low and the hope for strengthening beef demand. Conversely, the arguments for additional downside would largely circle the seasonal aspects of summer cattle prices, increased supplies, weaker than expected export demand and a potentially slowing macro economy. Futures markets continue to chop and are no doubt attempting to carve out a bottom, but cash markets continue to slide. It is interesting to note that there are short term discounts and longer-term premiums built into the cattle futures curve, while the feeder curve is essentially flat. Recent advances in corn prices as well as strengthening basis is certainly driving some of these factors but should be monitored as we move forward. Expectations for cash trade this week are likely steady to softer with weaker basis. Futures markets bounced big on small volumes to start this week. It seems this is more of a basis narrowing rally, but it did seem to negate the bear flag setting up on the daily charts. Depending on how sharp your pencil is, the Aug19 LC may have closed just above the midterm downtrend line.

A drop in crude-oil prices means Americans could pay less at the pump this summer, which some experts are saying could fall to sub-$2 a gallon. As most already know, gasoline prices are typically expected to rise this time of year due to higher demand and the requirement that gas stations use a more expensive blend of fuel, which won’t ignite in hot weather. Last year at this time, the average price nationally for regular gas at the pump was $2.92 a gallon, according to AAA. Today, the national average is closer to $2.75 per gallon.  A key reason for the price decline is that the U.S. is over-supplied in both crude oil and processed fuels and now producing a record-high 12.4 million barrels a day of crude oil compared with 8.7 million three years ago, according to weekly Energy Information Administration estimates. Something else to keep in mind, the gap between Houston and San Francisco prices was more than $1.50 a gallon on Sunday, according to AAA data. California prices are normally higher than in Texas, but this year fires and other breakdowns at oil refineries in the Golden State sent prices rocketing higher. 

 

Morning Commentary

July corn down 3 ½ at $4.1225

July beans down 5 ¾ at $8.505

The DOW is up

USD is stronger

Crude oil up $.18 at $54.17

Good morning,

Corn  bulls are happy to see some resolution with Mexico. Global demand has been somewhat suspect, so deeper problems with one of the top buyers of U.S. corn would not be considered a tailwind. Most traders in the market are still talking about U.S. weather and planting delays. This afternoon we will get the first look at overall crop condition estimates form the USDA. The over/under seems to be around 50% of the crop being rated “Good-to-Excellent”. Last year at this time, we had over +90% of the corn crop emerged and 77% rated “Good-to-Excellent”. Perhaps more importantly and telling is the fact, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, and South Dakota were all +95% emerged last year. Illinois was rated 82% GD/EX last year; Indiana 75%; Iowa 81%; 90%; Nebraska 86%; Ohio 87%; Wisconsin 91%.

Soybean  traders are eager to see how much of the U.S. crop is still unplanted? Last week the USDA estimated 39% of the crop was planted. There’s some talk that we could now be +60% planted. This time last year the USDA estimated that 83% of the U.S. soybean crop was emerged and 93% planted. In fact, this time last year, Arkansas, Illinois, Indiana, Iowa, Louisiana, Minnesota, Mississippi, Nebraska, North Dakota and South Dakota were all +95% planted.

China is the biggest producer and consumer of pork in the world. There’s now some questions being asked about future pork demand and if the African Swine Fever virus could have long-term implications altering the worlds dietary demand? Before the recent outbreak, China was home to +400 million pigs and pork, which has always been the most popular meat. It was estimated that the average Chinese adult was consuming +67 funds of pork per year, which is almost three times the amount of poultry being consumed. Since the virus was first identified back in August of 2018, China has culled more than +1 million pigs and dietary habits are quickly changing. Something we need to keep in mind, African Swine Fever is something the world has been dealing with and battling for many years. Historically, outbreaks have been reported in Africa, Asia, parts of Europe, South America, and the Caribbean in both domestic and wild pigs. In fact, some of these countries are still trying to eradicate the disease after many many years of battling the problem. Though scientist and bio experts across the globe are working tirelessly, at the moment, there are no approved vaccinations against ASF, which can be spread by live or dead pigs, domestic or wild, and via pork products. Furthermore, transmission can also occur via contaminated feed and fomites (non-living objects) such as shoes, clothes, vehicles, knives, equipment, etc. due to the high environmental resistance of the ASF virus. I’d suggest with the growing exposure and spread of the virus there has to be a fairly large number of cases still not reported. Interestingly, I believe this is one reason why pork prices in China are staying somewhat suppressed. Keep in mind, over a million pigs being culled and taken out of the supply chain. In other words, I think people in China might be somewhat skeptical of pork, especially if they believe cases are being unreported. This seems to be causing a sizable shift in overall pork demand. Now, consider what happens if the virus widens and strengthens its grip. Moving forward, I’m keeping my eyes on the huge uncontrolled herds of ferrel hogs that are increasingly running free around the borders of China. The virus has already jumped borders into Vietnam, Hong Kong, Mongolia, Cambodia, and North Korea. Experts at the UN’s Food and Agriculture Organization (FAO) worry it could still spread further into Myanmar, the Philippines, and Laos, which will make this one of the worst animal virus outbreaks ever on record. There’s also more eyes on the explosive wild ferrel hog population here in the U.S. and in Canada. What would happen to overall pork demand should a case show up in North America? (Source: Bloomberg, Reuters, The Financial Times, Wall Street Journal) 

 

Morning Commentary

July corn down 2 ¼ at $4.1825

July beans down 4 ¼ at $8.645

The DOW is up

USD is stronger

Crude oil up $.57 at $53.16

Good morning,

Corn  bears are pointing to increased demand destruction as exports continue to fall behind the pace needed to reach the USDA’s current forecast. Bears are also pointing to some upcoming windows of opportunity for producers in certain areas to get more corn planted. The other big question will obviously be yield? From what I’m hearing, it seems like the current yield debate for the bulls is falling somewhere between 160 and 170 bushels per acre. I doubt the USDA comes anywhere close to this type of early reduction in next weeks report. In fact, most are looking for the USDA to cut their current 176 yield estimate down to around 172 or 173, then perhaps make another more sizable reduction in the July report? It’s hard to imagine we are seeing this much discrepancy and variance in total production estimates. The USDA was thinking +15 billion bushels would be produced here in the U.S., now the battle ground is somewhere between 11.5 billion bushels and 14.0 billion bushels. Since late May, July traded 31 cents off the high and open interest declined 33,000 lots.  The trade count had the fund buying 23,500 corn.  Funds are now thought to be long 9,500 lots.  The short term trend for July corn is neutral-positive.  Stable trade over 426 alerts for a return to trending advances.  Closing below 406 signals a deeper correction. 

Soybean  bears are thinking the delays and complications in corn panting will equate to a greater number of soybean acres. Bears are also pointing to perhaps larger than anticipated demand destruction. The combination of more planted soybean acres and less demand is keeping a lid on higher prices. Bulls argue that ultimately there will be fewer soybean acres than originally forecast by the USDA, especially if the weather continues to complicate. Since late May, July traded 35 cents off the high and open interest declined 33,000 lots.  The trade count had the fund selling 2,500 beans.  Funds are now thought to be short 108,000 lots.  The short term trend for July beans is neutral-positive.  Stable trade above 880.25 alerts for a return to trending advances   Closing under 863.75 alerts for deeper corrective action and a test of 845.75. 

Unrelenting rains catapulted May to the second-wettest month on record in U.S. history, leaving vast tracts of farmlands flooded across the nation’s midsection and jeopardizing this year’s corn crop. May’s precipitation total for the Lower 48 states was 4.41 inches, which was 1.5 inches above average, according to the National Oceanic and Atmospheric Administration (NOAA). I’m told the past 12 months have been the wettest such period on record for the lower 48 since records began in 1895, with rains especially concentrated in the Midwest, Plains, and Northeast. It’s worth mentioning that rainfall during this period was 37.68 inches, which was 7.73 inches above average for the period and the previous all-time 12-month record set this April was 36.2 inches.

Hong Kong Pork Prices Explode As Slaughterhouse Reopens:  Reopening after a four-day closure, thousands of pigs are being culled and the facility is being cleaned after the detection of another case of ASF last week. Keep in mind, the Sheung Shui slaughterhouses are expecting the price of pork to double. Not only is the Dragon Boat Festival creating high demand, but I’m told traders say that fewer pigs are being imported to Hong Kong than usual as 2,200 pigs passed through the abattoirs on Thursday – 1,200 from the mainland and 1,000 hogs from local farms. Remember, there would be around 4,000 to 5,000 animals regularly available in Hong Kong each day.

 

Morning Commentary

July corn down 5 ¼ at $4.095

July beans down 9 at $8.6075

The DOW is down

USD is weaker

Crude oil up $.41 at $52.09

Good morning,

Corn  prices have faced some pressure the past few days, down -28 cents from the recent highs.  Over the past 5 years, the month of June has been the high of the year for marketing and we feel the high might have been put in last week.  Now we must wait for more data as the summer plays out or until the combines roll at harvest. The short term trend for July corn is neutral-positive. The market is in a correction phase. Closing below 406 alerts for a change in trend. Stable trade over 428 is needed to resume advances.

Soybean  traders continue to debate a wave of moving parts. Bears argue that soybean acres will be more heavily planted as unplanted corn acres are switched at the last moment. Bears also see an ongoing trade dispute with the worlds #1 buyer of soybeans, and continued complications associated with African Swine Fever across most all of China. Bulls are pointing to historical flooding and rain delays in many important U.S. soybean growing regions. The short term trend for July beans is neutral-positive. Stable action over 893 signals a run to 920.75. Closing under 863.75 alerts for corrective action.

China’s National Grain and Oil Information Centre (CNGOIC) expects soybean vessel arrivals in May to reach 7.2 million mt this year. China’s soybean purchasing for June is now 78% complete and coverage for July is about 51% finished, according to data from Chinese soybean broker Overseas China Investment.

IEG Vantage, formally known as Informa, lowered their projected corn acres estimate to 84.9 million, with a yield of 174.0 bushels per acre and production at 13.6 billion bushels vs. the previous USDA production forecast of +15.0 billion bushels. They are projecting 85 million acres soy soybeans  will be planted which is up about +420,000-acres from the USDA’s March projection. 

 

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