Morning Commentary

July corn down 7 ½ at $3.485

July beans down 22 ¾ at $8.8575

The DOW is weaker

USD is stronger

Crude oil down $99 at $64.86

Good morning,

Corn bears continue to apply pressure as trade tensions escalate. They also continue to point to good rainfall totals in the forecast across a large portion of the U.S. corn belt. The latest USDA crop-condition report continues to confirm one of our best ever starts to a season. . The USDA released their official weekly crop-condition estimates showing a slight overall improvement from 77% to 78% of the crop now rated “Good-to-Excellent” vs. 67% rated “Good-to-Excellent” last year. Corn reported as “emerged” pushed to 98% which is just a hair ahead of our 5-year average of 97% for this time of year.

Soybean traders watch prices in the JUL18 contract tumble to sub-$8.90, a level the market hasn’t seen since March 2016. From a technical perspective, some are saying the low back in November 2015 could be in play just below $8.45 per bushel. New-crop NOV18 prices are down heavily again this morning and now pressuring the $9.00 level. Trade relations with the Chinese and greater uncertainty about NAFTA are clearly creating continued headwinds and extreme pressure. On the flip side, bulls are trying to find anything to stop the bleeding, now pointing to overall U.S. crop-conditons deteriorating a bit. The latest USDA data shows weekly crop-conditions dropping slightly from 74% down to 73% now rated “Good-to-Excellent” compared to 67% rated “Good-to-Excellent” last year at this time. Soybeans reported as “planted” pushed to 97% vs. our 5-year average of 91%. Soybeans reported as “emerged” pushed to 90% which is well ahead of our 5-year average of 81% for this time of year. Bottom-line, the market doesn’t seem all that concerned about deteriorating conditions in the U.S.

High oleic soybean varieties are one of the most recent achievements in U.S. soybean innovation. Projections indicate that high oleic planting in the United States could reach more than 17 million acres in the future, which would make high oleic soybeans the fourth largest row crop in the U.S. Currently, the U.S. doesn’t export high oleic soybeans. High oleic traits have received global regulatory approval, however, nodding at potential demand abroad for this U.S. Soy innovation.

Prior to Bt technologies farmers lost $1 billion annually to corn rootworm—in the form of chemical costs or actual yield loss. With resistance to traits that once killed the pest on the rise, it might just nibble its way back to a billion-dollar price tag. Corn rootworm (CRW) poses a double threat—the adult snips corn silks, and if unchecked could prevent successful pollination and kernel development, and the larvae munch on roots which leads to risk for disease and plant stress. CRW was once controlled by traits but with resistance on the rise is now at risk of running rampant: it’s time to find a solution to slow the spread of resistance.

 

Morning Commentary

July corn down 5 ½ at $3.575

July beans down 19 ¾ at $9.075

The DOW is down

USD is stronger

Crude oil down $.27 at $66.62

Good morning,

Underwhelming compared to the hype…the USTR announced a 25% import tariff on $50B worth of Chinese goods related to IP and technology.  The first wave of tariffs, on $34B in imports, go into effect July 6th.  The second wave, covering $16B, will undergo further review in a public comment process.  Reports have Trump completing a second list of tariffs on an additional $100B in Chinese products.  The additional tariffs would focus on items supplied from China that account for 33% or less of total US imports.  The move is aimed at making it easier for the US to switch to other origins should China retaliate.  From the time the second round of tariffs are announced it will take at least 60 days to be put in to effect.

Corn has taken it on the chin as of late.  The funds have trimmed enough size they may now be flat this market and wanted to see a “correction”.  The first few cards they got to peek at were: Good planting and no early wide-spread weather problems here in the U.S; Increasing trade tensions involving both China and NAFTA; uncertainties in the ethanol space regarding exports and RINS; and a stabilizing second-crop in Brazil. From a technical perspective, the JUL18 contract has gone through the $3.62 low set back on January 12th. The new-crop DEC18 contract has traded through the low of $3.79^2 set back on December 15th.

Soybean prices continue to tumble! They have now fallen by more than -$1.40 since late-May in a combination of funds exiting their long positions and macro traders using the ag space as a cross-hedging opportunity to protect against ancillary risk associated with Chinese trade renegotiations. From what I’m hearing, the funds have gone from holding large net-long positions to flat or perhaps now net-short this market. From a technical perspective, the old-crop JUL18 contract has managed to blow through all support levels and has now closed at it’s lowest level in over a year. The new-crop NOV18 contract, has fallen by more than -$1.00 since late-May, but is still a ways from the $9.27^2 low-close set back on June 23, 2017. It’s crazy to think about, but when you look back on the charts, we’ve basically gone nowhere since last June. The close on June 14th of last year (2017) in the NOV18 contract was $9.50 per bushel. Exactly  one year later, yesterday, June 14th, the NOV18 contract closed at $9.50 per bushel.

For the week ending June 7, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.5 million metric tons, down 2% from the previous week, unchanged from last year and 33% above the 3 year average. Although total grain inspections continued to decrease, wheat and soybean inspections increased 6 and 12 percent, respectively, from the previous week.

The Hawaii Governor signed a bill into law making it the first state in the U.S. to ban pesticides with chlorpyrifos. The bill was unanimously approved by the state legislature. The law also prohibits the spraying of pesticides within 100 feet of schools during normal school hours. Proponents of the bill pointed to studies that have shown a link between prenatal exposure to the chemical and developmental issues in children, like reduce IQ, attention disorders and working memory problems. They also found farm workers who have been exposed to high levels of chlorpyrifos have been found to be at higher risk of lung cancer and immune disorders. (Source: AgPro)

If you remember, Enogen corn is a seed innovation available exclusively from Syngenta and features the first biotech trait designed to enhance ethanol production. The company has now announced they have agreements in place with more than 30 ethanol plants with a combined production capacity of approximately 3 billion gallons. Producers who grow Enogen corn are eligible to earn a premium for their corn. In 2018, Enogen corn is expected to generate an estimated $28.5 million of additional revenue for growers. Definitely an interesting opportunity for producers out there looking to diversify a bit. (Source: Ethanol Producer)

Morning Commentary

July corn down 5 ¼ at $3.7075

July beans down 4 at $9.32

The DOW is up

USD is stronger

Crude oil up $.48 at $67.12

Good morning,

Corn bulls continue to battle headlines surrounding trade negotiations. With what appears to be greater uncertainty surrounding NAFTA and Chinese tariffs, the trade is extremely apprehensive in trading more traditional fundamentals. U.S. demand remains extremely strong, especially ethanol and exports. At the same time global supply has ticked back a bit with the drought in parts of Russia and Ukraine pulling down most production forecasts. We also have the logistical complications still brewing in Brazil and the production losses associated with the most recent Argentine weather complications. Here at home the weather has been widely cooperative to this point and the trade has built in very little if any weather premium.

Van Trump says “Soybean bulls are backpedaling as President Trump says he’ll confront China “very strongly” over trade in the coming weeks. Prices closed yesterday at their lowest level since late-August of last year. President Trump said in an interview that aired yesterday on Fox News, “China could be a little bit upset about trade because we are very strongly clamping down.” From what I can gather, The White House is going to proceed with plans to impose tariffs on $50 billion of Chinese goods. In return, China has vowed retaliatory measures, which makes the trade nervous. The final list of Chinese imports that will be targeted by U.S. tariffs is expected to be released either tomorrow  or early next week, and planned investment restrictions and export controls will follow by month-end.”

Earlier this week a California judge ruled glyphosate does not need a label warning stating it causes cancer. A U.S. District Court judge stated in his preliminary injunction: “It is inherently misleading for a warning to state that a chemical is known to the state of California to cause cancer based on the finding of only one organization (International Agency for Research on Cancer—IARC—which only found that substance is probably carcinogenic), when apparently all other regulatory and governmental bodies have found the opposite, including EPA.” The National Association of Wheat Growers led the charge to defend glyphosate and were joined by a broad group of agricultural organizations and companies. (Source: AgPro)

Bitcoin dropped 5% to its lowest level since February following reports of price manipulation. The digital currency fell below $6,200 Wednesday and has struggled to regain footing after dropping 10% this past weekend. From what I am hearing, the price began falling after a study was released by the University of Texas saying at least half of bitcoin’s rise last year was due to price manipulation on popular exchange Bitfinex. (Source: CNBC)

 

Morning Commentary

July corn down 1 ½ at $3.76

July beans down 9 ¾ at $9.4425

The DOW is up

USD is weaker

Crude oil down $.38 at $65.98

Good morning,

Corn prices are slightly lower to start the morning, but bulls are happy to see the USDA lower U.S. ending stocks for both old and new-crop. The market is trying to claw itself back after tumbling some -30 cents during the past three weeks, but ongoing worries about trade and no major widespread weather worry here in the U.S. keeps the upside somewhat limited nearby.  Below are some of the recent USDA highlights. Looking forward, we are hearing more talk that both domestic and global ethanol demand is pushing higher, which will help keep our strong demand story in play.

U.S. Yield – Unchanged at 174.0 bushels per acre.

U.S. Demand – Old-crop exports raised higher by +75 million bushels. New-crcrop corn used for ethanol raised higher by +50 million bushels offsetting a -50 million-bushel reduction in food, seed, and industrial (FSI) use of sorghum; new-crop corn used for Feed and Residual lowered by -25 million bushels. new-crop exports left “unchanged”.

Ending Stocks – New-Crop lowered by -105 million bushels from 1.682 down to 1.577 billion bushels; Old-Crop lowered by -80 million bushels from 2.182 to 2.102 billion.

Soybean prices continue to struggle to gain much upside momentum, despite both old and new crop U.S. ending stocks being lowered on increases in U.S. domestic crush demand. Somewhat disappointing was the fact Brazil’s record crop continues to grow larger. Just two months ago, the USDA forecast the crop in Brazil at a new all-time record of 115 MMTs. In May that record estimate was bumped even higher to 117 MMTs. Now in June the record extends even further to 119 MMTs. The big numbers out of Brazil are obviously helping to offset losses in Argentina. The USDA is also looking for some fairly large numbers out of the U.S. crop.  Below are some of the highlights and most recent adjustments by the USDA.

U.S. Yield – Unchanged at 48.0 bushels per acre.

U.S. Demand – Old-crop soybeans used for crush is raised +25 million bushels. New-crop soybeans used for crush raised higher by +5 million bushels to 2.0 billion; new-crop soybean exports left “unchanged”.

Ending Stocks – New-Crop lowed by -30 million bushels from 415 to 385 million. Old-Crop lowered by -25 million bushels from 530 down to 505 million bushels.

A week after the White House suspended its bid to reform the nation’s biofuels policy to aid oil refiners, the head of the Environmental Protection Agency on Tuesday dangled a tantalizing prospect to Midwest corn farmers, saying the agency has the power to expand sales of higher ethanol-gasoline blends. EPA spokesman Lincoln Ferguson confirmed Pruitt’s comments: “The Administrator shared that he believes statutory authority to grant the … waiver for E15 exists under the Clean Air Act, and to be effective, would require a subsequent notice and comment rulemaking process.”

Remember that tv show American Chopper? Well, Paul Jr. from the show, has partnered with the Renewable Fuels Association to build a custom motorcycle complete with a patriotic theme that runs on E85. The bike was recently revealed on Discovery Channel’s American Chopper, which is some great publicity for U.S. grown ethanol and the RFA. Paul Jr. made the comment that it was easier than he expected to make the chopper run on E85. All he had to do was up the jets about 30% and advance the timing a bit and the bike runs great. The custom bike is the centerpiece for RFA’s no campaign called “Fuel Your Knowledge” to educate consumers about the proper use of ethanol-blended fuels in boats, motorcycles, lawn and garden equipment and other off-road engines. (Source: RFA)

 

Morning Commentary

July corn up 3 at $3.7025

July beans up 4 ¼ at $9.58

The DOW is down

USD is stronger

Crude oil down $.08 at $66.02

Good morning,

Corn conditions here in the U.S. pulled back slightly but still remain extremely strong. The USDA reported 77% of the corp in “Good-to-Excellent” condition vs. 78% last week vs. 67% last year. The USDA reported corn as “emerged” at 94% which is right in-line with our historical 5-year average.  The trend for July corn is bearish.  An inability to reassert above 379.75 leaves the market vulnerable to 366+/-.  A close over 379.75 is the minimum needed to improve the outlook.  The market is now oversold on the daily chart.  Short July corn, system traders will find trailing buy stops around 371.5.

Soybean crop conditions also take a slight step backwards, but similar to corn still remain extremely strong. The USDA now shows the U.S. crop rated 74% “Good-to-Excellent” vs. 75% last week vs. 66% last year vs. 74% in 2016. The USDA also showed the crop now 93% “planted” vs. the 5-year historical average of 85%. The crop was also reported 83% “emerged” vs. the 5-year historical average of 69% emerged by this date. In other words, the U.S. soybean crop appears healthy and running slightly ahead of schedule. .  The trend for July beans is bearish.  Long term support on the weekly chart lies at 961.75.  Closing under 953.75 should unleash a drop to 935.  A close above 988.5 is the minimum needed to improve the outlook.  Short July beans, system traders will find trailing buy stops above 965.5.  With estimated fund selling at over 55,000 lots since the beginning of the month, I expect a friendly reaction to the report.

The CDC is investigating a multistage outbreak of salmonella infections that are linked to contact with live poultry, including chicks and ducklings from multiple hatcheries, in backyard flocks. As of June 1, 124 people infected with salmonella were reported form 36 states. About 312% of those who have become ill were children younger than 5 years.

If you remember, last week, several major news outlets reported that during recent trade talks in Beijing, China proposed to buy roughly $70 billion worth of U.S. ag and energy products if the U.S. lifts its proposed tariffs. However, U.S. Trade Representative chief ag negotiator Gregg Dough said he doesn’t know where than came from. Dough visited Beijing with the U.S. team earlier in the month to discuss trade issues with China. Doud says there are structural sanitary and phytosanitary policy issues that need to be addressed before the U.S. can export significantly higher amounts of ag products to China. (Source: AgPro)

 

Morning Commentary

July corn down 1 ¼ at $3.765

July beans down 2 at $9.6725

The DOW is down

USD is stronger

Crude oil down $.58 at $65.16

Good morning,

Corn prices have tumbled by more than -30 cents in just the past 12 trading sessions. Bulls are hoping that weather headlines out of the Black Sea region might help stop some of the recent bleeding. Unfortunately, with the current crop-condition rating showing one of the best starts we’ve seen in years, it’s tough to convince the trade that there’s any reason to be concerned. As for tomorrow’s USDA monthly supply and demand report, South American production estimates will be in play, as well as forecasts for U.S. exports, ethanol and feed usage.

The Chinese city of Tianjin will use gasoline with added ethanol in most vehicles by the end of September, according to a document published on the city government’s website on Monday, as Beijing pushes for adoption of the biofuel nationwide.  The central government said last year that it plans to roll out the use of gasoline blended with 10 percent added ethanol nationally by 2020, to cut corn stocks and clean up choking smog.  The move by Tianjin, a port city of around 15 million people in northern China, was the first official plan by a provincial government to implement the national policy since it was announced. (Reuters)

After watching the market drop by more than -50 cents last week, the bulls are definitely dazed and perhaps a bit confused. From data released by the CFTC on Friday , the funds are still thought to be long close to 70,000 contracts. Obviously, lack of a trade deal with the worlds top buyer of soybeans has the market nervous. Especially with such a large amount of U.S. soybeans still sitting on the books as “sold” but not yet”shipped”. Meaning tomorrow’s  USDA report will be viewed as great importance in trying to better determine U.S. export demand and total domestic supply. From a technical perspective, it feel like the JUL18 contract wants to eventually try and test psychological support down near $9.50 or perhaps even the low set back last June near $9.38 per bushel.

China has purchased futures contracts covering more than 361,000 bales of U.S. cotton for 2019-20. That’s enough to make 400 million T-shirts. China has never booked that much cotton that far in advance at this time of year, in data going back to 1998, Julie Wernau reports. China’s return to global cotton markets is likely to mean a period of higher prices for a fiber used in most apparel, textiles and upholstery. It is also a boon to U.S. producers. Chinese strategic cotton reserves are likely to run low by the end of August, according to analysts. China’s Ministry of Agriculture and Rural Affairs said in its monthly report on May 10 that while the government sell down of cotton stocks will continue in 2018-19, the domestic supply of high quality lint is insufficient and cotton imports are expected to increase.

More than 14% of $140 billion in annual U.S. farm exports have been or will likely be hit by tariffs in trade disputes with major buyers such as China and Mexico according to a top U.S. trade negotiator. Mexico is the largest export market for U.S. pork which is the likely target of retaliatory tariffs more than any other commodity. China has also imposed tariffs on U.S. pork and other products and they are the second largest destination for U.S. pork by volume last year. (Source: Reuters)

The Technology Modernization Fund Board gave $10 million to USDA;s website Farmers.gov to make it more accessible for “America’s farmers, ranchers, conservationists, and private foresters with vital USDA resources and programs. This new resources is expected to reduce the time farmers need to take away from their fields today to fill out paperwork. To learn about the Farmers.gov vision, USDA’s farmer-centered design principles, and roadmap for the website, visit the Farmers.gov playbook at www.farmers.gov/playbook. (Source: USDA)

Believe it or not, there are 6.7 million job openings and just 6.4 million available workers to fill them, according to the Bureau of Labor Statistics, which is a phenomena the American economy has never experienced before 2018. Interestingly, while the unemployment rate has dropped to 3.8 percent, tied for the lowest rate since 1969, the level of those falling out of the workforce has surged. The total of those counted as not in the labor force is now at a record 95.9 million, a 21 percent rise over the past decade.(Source: CNBC; Bureau of Labor Statistics)

AgriProtein, the insect farming business, has raised $105 million in equity and debt into its UK holding company from a large, overseas listed corporate financial institution that could not be disclosed. This is the largest capital raise on record for an insect farming company and is the 18th largest farm tech deal on record, according to AgFunder data. AgriProtein feeds black soldier flies with municipal waste and sells them as feed for the livestock industry. It has one insect farm in South Africa, and is embarking on the construction of its next generation of farms. “We continue to view the world differently, recognizing the true value of organic waste as a resource,” said Jason Drew, CEO, in a statement.

Morning Commentary

July corn up ¼ at $3.765

July beans down 3 ¼ at $9.71

The DOW is down

USD is stronger

Crude oil down $.26 at $65.69

Good morning,

Corn prices are down more than -10 cents this week and down over -30 cents during the past two-weeks. The bulls have backpedaled on lack of weather related risk and continued talk of trade uncertainties. The corn market is completing 2nd downside counts with today’s break to $3.74 ¾. This should give us a bounce as well but it looks like the $3.85 area will be a problem on rallies. We should see some stability here as we deal with this oversold trade. December also met 2nd counts at $3.96 ¼ which should slow the slide for the moment. Topside shows back near $4.05. However, new lows would project a further slide to 3rd counts at $3.62 ¼ on July and $3.85 ¼ on December.

Soybean bulls continue to take it on the chin as prices are down another -50 cents this week, breaking through most all nearby technical support on the charts. Yesterday’s collapse has the bean market testing the year’s low at $9.65 ¼. Look for that to handle this extended slide but this now leaves the $10.00 area as resistance on the next rally.

Bayer has successfully completed the $62.8 acquisition of Monsanto, delisting the shares of the U.S. company from the NYSE. The combined unit will be based in Monheim, Germany. Integration should begin in about two months once the sale of Bayer’s agriculture assets to BASF is completed, satisfying regulatory concerns. (Source: SeekingAlpha)

More than 14 percent of $140 billion in annual U.S. farm exports have been or are likely to be hit by retaliatory tariffs in trade disputes with countries such as China and Mexico, a top U.S. trade negotiator said on Thursday.

US net export sales of current crop corn and next crop totaled 1.257 million mt in the week ended May 31, up 10% from 1.142 million mt in the previous week, Department of Agriculture data showed Thursday. Market expectations were for total weekly export sales to be between 800,000 mt and 1.300 million mt, a source said. Weekly corn export sales were ahead of the pace needed to reach USDA’s overall forecast and the new low corn prices were not yet reflected in the export sales, another source added. (Source: Platts)

Morning Commentary

July corn up 2 ¼ at $3.805

July beans up ¼ at $9.945

The DOW is up

USD is weaker

Crude oil up $.57 at $65.30

Good morning,

The bear took charge of the corn market again yesterday, pushing values down another 4-5 cents to new lows for the move. The declines were somewhat impressive, given double-digit gains in some wheat contracts, though some suspect the corn weakness was tied to “get me out” of “long corn, short wheat” seasonal trades. Either way, July Corn is now 34 cents below the high from May 24th. Seems an eternity ago. Managed Money traders were viewed net sellers of 20,000 corn, which would leave them still net long about 110,000 combined futures and options. Cash trade continues to have a firmer tone as farmer selling has dried up.

U.S. agribusinesses are facing lingering inventory snafus and economic pain over farm chemicals and fertilizer, as a cold, wet spring that slowed crop plantings continues to cause ripple effects across the agricultural sector.​ ​Demand for these products was compressed into a tighter timetable after Midwest weather improved dramatically in May, leading to a rush of orders that distributors could not quickly fulfill across the entire Farm Belt, according to farmers and dealers.​

The U.S. trade deficit fell to a seven month low in April as exports rose to a record high, lifted by an increase in shipments of industrial materials and soybeans. The Commerce Department said the trade gap dropped 2.1% to $46.2 billion, the smallest since September. If the trend in the real trade deficit is maintained, trade could contribute to gross domestic product in the second quarter after having a neutral impact in the January-March period. (Source: Reuters)

A recent NASA study has revealed that freshwater supply is changing all over the Earth, including the United States. In a first-of-its-kind study, scientists used various satellite data and information on human activity to understand the reasons why such shifts are happening. The study points to human activity, natural variability, and climate change. According to a NASA press release the study finds, …that Earth’s wet land areas are getting wetter and dry areas are getting drier due to a variety of factors, including human water management, climate change and natural cycles.

USDA attache in Buenos Aires recently released a more detailed report about Argentina importing U.S. soybeans for the first time in over two decades. Argentina is the world’s third largest soybean producer and the number one soybean oil and meal exporter in the word. Below are some additional highlights:

Crush Capacity is estimated at 67 million tons and because of the lack of domestic supply is currently operating at about 70% capacity. Several insider think that number could drop even lower as local soybean supplies become more scarce. Therefore, the local crushing industry needs to import more soybeans to maintain its normal processing levels.

Port of Rosario Controls Capacity: Eighty percent of Argentina’s crushing capacity is concentrated in the port city of Rosario.

Drought Crushes This Years Crush: A severe drought during the peak summer months reduced forecasts for Argentine soybean production by -16 to -20 million tons to between 36 and 40 million tons, down form 54 million metric tons estimated at the beginning of the crop season, due to severe weather problems.

How Many Soybeans Will Argentina Import: Reports circulating show that soybean imports in Marketing Year 2017/18 could range from between 4.0 to 5.5 million metric tons. This would account for 10 to 12% of Argentina’s crush. Over 95% of the beans are almost always exported from Paraguayan origin with the balance from Brazil, rarely do the soybeans get imported form the U.S.

Morning Commentary

July corn up ¼ at $3.84

July beans up ¼ at $10.015

The DOW is up

USD is weaker

Crude oil down $.43 at $65.09

Good morning,

There are headlines circulating that China is offering to buy some +$70 billion more in U.S. ag, energy and manufacturing products if Washington is willing to do away with the tariffs. From a technical perspective, the trade will want to see the old-crop JUL18 contract trade back in the $3.90 to $4.00 range, for at least a brief period, before it feels more confident about resuming it’s bullish tilt. Nearby support in the JUL18 contract looks to remain in the $3.75 to $3.80 range. The new-crop DEC18 contract will need to trade back in the $4.10 to $4.20 range to get the trade feeling more confident about the upside. Nearby support still seems to be in the $3.90 to $4.00 range.

Soybean traders are debating the accuracy of the longer-term U.S. forecast which is arguably hotter and drier during the next couple of months.  From a technical perspective, bulls are hoping the JUL18 contract can hold nearby support in the $9.88 to $9.98 range. If not, the trade might look to retest the mid-January low at $9.65^2. As for the new-crop NOV18 contract, bulls are hoping to see the market hold support between $9.95 and $10.05 per bushel. To the upside, it might be tough to get the NOV18 contract to trade back above the $10.30 to $10.40 range anytime soon without some more positive headlines form Washington or more weather related fears here in the U.S.

CME Group announced they reached average daily volume of 20.1 million contracts during May 2018, up +22% from May 2017. Open interest at the end of May was 126 million contracts, an increase of +2% form the end of May 2017, and up +16% from year-end 2017. May volume was buoyed by an all-time daily volume record of 51.9 million contracts traded on May 29. Agricultural volume averaged 1.4 million contracts per day in May 2018, up +22% from May 2017. Corn futures saw record daily open interest for of 1.97 million contracts on May 30. (Source: CME Group)

Tyson Foods acquired Tecumseh Poultry, owner of the air-chilled Smart Chicken brand, for an undisclosed amount, according to a company release. Tecumseh’s portfolio includes air-chilled fresh and deli-style chicken, as well as chicken sausage. The company will operate separately from Tyson as a wholly owned subsidiary of the poultry giant. Organic fresh chicken sales grew by 12 percent in the 52 weeks ended April 28, compared to growth of 3 percent for conventional chicken, making this a solid purchase for Tyson. (Source: Meatingplace)

While Japan has a declining population, it remains a wealthy country of nearly 127 million people and is ranked as the 11th most populous country in the world. Japan is the world’s third-largest economy, with a per capita gross domestic product of $41,200 in 2017. Demographic trends indicate that by 2021, 98% of the population will reside in urban areas where people are more likely to shop at modern retail stores where imported consumer foods are sold. Japan is the world’s 4th largest importer of agricultural goods and ran a 447 billion trade deficit with the world in 2017, including a $12 billion agricultural trade deficit with the U.S. (Source: USD

USDA has resumed accepting applications for the Conservation Reserve Program, which pays farmers to take environmentally sensitive land out of production. Last fall, the department had paused continuous CRP enrollments to assess available acreage and stay under the 24-million-acre cap set by Congress in the current farm bill. Eligible farmers can sign up until Aug. 14. (Source: USDA)

 

Morning Commentary

July corn up 3 at $3.8375

July beans up 2 at $10.0375

The DOW is down

USD is stronger

Crude oil down $.24 at $64.51

Good morning,

Corn prices have rebounded a bit this morning but are still now down about -30 cents in just the past seven sessions. Traders are not only chewing on U.S. trade uncertainties but also more talk about a U.S. crop that’s supposedly in very-good condition. The USDA’s most recent data showed 97% of the crop “planted” vs. the 5-year average of 95%.  Technically, yesterday’s gap action has the corn market breaking down as we point to the March low at $3.77 ½ before slowing down. A 2nd count comes in at $3.74 ¾. That should give us a bounce but we now face resistance from $3.90 to $3.95 on rallies.  December is also breaking down with counts at $3.96 ¼ and a 3rd at $3.85 ¼. Right now, oversold conditions suggest a rebound. Expect resistance from $4.10 to $4.15.

Soybean prices are now down close to -50 cents in the past seven trading sessions. Similar to corn, bulls have backpedaled on no real progress in regards to a trade deal and the U.S. crop jumping off to one of its best starts in years. The USDA reported 87% of soybean crop is now “planted” vs. 81% last year vs. the 5-year average of 75%. Once again, the bean market is testing the key $10.00 area after closing the early May gap. This should slow the slide. Look for a bounce off this $9.95 to $10.00 area. That leaves this oversold trade open for a rebound to the $10.20 to $10.25 range.

Germany’s Bayer AG said yesterday that it plans to complete its purchase of Monsanto on Thursday, June 7, after receiving all the required approvals from regulators. Bayer said following the $63 billion takeover that “Monsanto will no longer be a company name.” From what I understand, they will retire the U.S. seeds maker’s 117-year-old name, the combined company will be known simply as Bayer, while product names will remain the same.

Two industry officials with direct knowledge of the plan told Reuters on Monday, for the first time providing details of the country’s retaliatory measures to U.S. President Donald Trump’s tariffs on steel and aluminum. Last week, Mexico said the retaliatory tariffs would apply to pork legs and shoulders from U.S. suppliers, which account for about 90 percent of the country’s $1.07 billion annual imports of the cuts. (Source: Reuters; BusinessInsider)

Deere & Company took legal action against Precision Planting and owner AGCO Corporation, claiming the companies infringed on 12 John Deere patents. The patents protects tools that give farmers accurate seed placement, uniform seed spacing and even crop emergence while planting at faster speeds. The complaint was filed with the U.S. District Court in Delaware. Interesting to note that John Deere had previously tried to buy Precision Planting, only to be blocked by the U.S. DoJ. (Source: AgPro)

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