Morning Commentary

Sept corn up 3 ½ at $3.65

Nov beans up 17 at $8.86

The DOW is up

USD is weaker

Crude oil up $.25 at $65.26

Good morning,

Van Trump says “Corn traders continue to juggle debates about strong demand both globally and domestically, against what appears to be mostly cooperating U.S. weather and talk of a record setting yield. Bears continue to point to the old adage that big crops tend to get bigger. Bears are also saying U.S. producers are talking about planting more corn acres in 2019. We’ve had a couple of larger retailers tell us many folks are talking about more corn acres next season. Some early forecasts are talking as much as +95 million planted corn acres in 2019. That would obviously put a damper on the upside. I personally contend it’s way too early to be talking 2019 acres, and I really don’t see the banks expanding lines of credit to allow +95 million U.S. corn acres next year. I know many producer who still have unsold old crop bushels and next to nothing sold for 2018. They are obviously holding out for much higher prices, something I’m afraid we might not see for several more weeks. As I’ve said the past few days, it feels like the trade just wants to slosh around somewhere between $3.50 and $4.00. Bulls are afraid of a global economic slowdown, the U.S. dollar strength is a headwind, crude oil prices have backpedaled significantly, copper is now down almost -25% on the year, gold down -11%, silver down -16%.”

Soybean prices are higher to start the morning. There was some talk overnight that China and the U.S. reached a modest breakthrough in their standoff over trade, saying they will hold lower-level talks later this month on the spiraling dispute. China’s Commerce Ministry said a vice minister will travel to the U.S. at an unspecified date, at the invitation of the Treasury Department, to discuss trade issues. The new round of discussions would be the first since May. Traders yesterday were talking about possible production hiccups in some southern areas of the U.S. and the fact Argentina has decided to suspend their export tax reductions on both meal and oil for six months. With the Argentine peso falling to a new all-time low and their interest rates being bumped to 45%, the government needs the tax income. Demand remains strong, and yesterday’s NOPA crush numbers did nothing but further confirm that fact. The monthly crush report, showed the soybean crush at a new record for July at 167.73 million bushels, which was well above most trade estimates. This was also well above last months 159.228 million bushels crushed. And massively above last year’s July crush at 144.718 million bushels.

Last month, President Trump announced they would try and ease some of farmers’ financial fears through a $12 billion emergency aid package. Of course, we have very few details on how this will work. Univ. of Missouri’s Food and Ag Policy Research Institute is analyzing what little details we have. Pat Westhoff, director of FAPRI is anticipating soybean payment stocks range from 25 cents per bushel to no more than $1 per bushel. OF course, these are just estimates. (Source: FAPRI)

Ethanol production on the week was down to 1.072 million bpd, but weekly production is up +1.2% from last year. Stocks are up 5.4% from last year at 23.0 million barrels. The 5.286 billion bushels of corn used for ethanol is exceeding the pace to reach the USDA’s estimate of 5.625 billion bushels.

According to the latest AEM Flash Report, July resulted in the second month in a row where all equipment categories tracked had positive sale year-to-date. Year-to-date combine sales are up 23.7%, and comparing July 2018 to July 2017 combine sales were up 37.2%. So far in 2018, four-wheel-drive tractor sales are up 12.7% compared with 2017. Since 2017, we have seen a soft-upward movement for larger production ag equipment such as 100+HP 2WD tractors, 4WD tractors and self-propelled combines. Ssource: AEM)

If you remember back to last July, Adidas — parent company to Reebok — announced their commitment to use only recycled plastics in the production of its shoes and sportswear lines by 2024. Now Reebok has announced a new shoe called “Cotton + Corn” which are made up of a 100% cotton upper and a bio-based sole made from a corn-based plastic. The insole is made from castor bean oil, and the packaging is made from recycled materials. They are the first-ever “75% USDA certified bio-based shoe.” (Source: CBS News)

 

Morning Commentary

Sept corn down 2 ¼ at $3.60

Nov beans down 7 ¾ at $8.72

The DOW is down

USD is stronger

Crude oil down $.66 at $66.38

Good morning,

Corn traders are wondering if the market can gather enough momentum to trade back north of $3.88 per bushel, a level that has been very tough as of late for the DEC18 contract to trade beyond. It seems like the bulls can push to $3.80, but then start to lose their footing. Keep in mind, the DEC18 market hasn’t closed above $3.90 since early-June. There’s not a lot fresh or new in the headlines.

Soybean bears are talking about improved U.S. weather, mostly normal temperatures and above normal rainfall now in the forecast across large portions of key U.S. growing regions. This is starting to bring about more talk of increasing yields and the more realistic probability of the U.S. harvesting a +4.5 billion bushel crop and ending stocks staying north of +750 million bushels. The bears clearly believe there is more downside risk in the market and that prices could eventually fall to sub-$8.00. Keep in mind, the USDA recently lowered the U.S. season-average farm price by -35 cents per bushel with the range now being from $7.65 to $10.15.

China’s demand for Brazilian soybeans has been on the rise, and Reuters reports that more Brazilian farmers have opted to plant soybeans instead of sugarcane. Government data shows that Brazilian soybean plantings have expanded 2 million hectares in two years, while the land planted to cane has fallen by nearly one million acres.

U.S. exports of grain in all forms are on track to set a new record in 2017/18 with two months of sales left to report, according to data form the USDA and analysis by the U.S. Grains Council. During the first 10 months of the marketing year (September 2017 to June 2018), the U.S. exported 98.3 million metric tons (38.7 billion bushels) of grain in all forms, up 2% year-over-year from last year’s record setting pace. The feed grains in all forms calculation helps capture how much of U.S. coarse grain production is actually used in the world market by including the corn equivalent of c0-products like ethanol and distiller’s dried grain with solubles as well as beef, pork and poultry meat exports. (Source: USGC)

 

Morning Commentary

Sept corn up 1 ¾ at $3.5825

Nov beans up 8 at $8.7675

The DOW is up

USD is weaker

Crude oil up $.89 at $68.09

Good morning,

Corn bulls are desperately trying to hold support near $3.70 per bushel. They argue the USDA’s recent yield forecast is way too optimistic and ear weights are much too heavy. Believing the U.S. average yield will ultimately be trimmed in the weeks and months ahead and will not end up being record large, in other words, they are thinking the yield will end up being trimmed from the most recent 178.4 estimate to something sub-176.6. The bulls also argue, with “global demand” remaining strong, +37 MMTs higher than last year, and “global corn stocks” -45 MMTs less than we had viable at this time last year, at some point the traditional fundamentals will begin to matter. As of right now, new–crop prices here in the U.S. are at about the same level as last year, but U.S. ending stocks are almost -600 million bushels less.  Something interesting to think about… Last year the market posted its 2017 summer low the last week in August at $3.23 per bushel. The year before that in 2016, the market posted its summer low the last week in August at $3.01 per bushel. The year before that in 2015, the market retested it’s low down at $3.46^4 during the last week in August. The year before that in 2014, the market was a bit slower to respond and didn’t post it’s summer low until the last week in September at $3.18^2. In case you are wondering, in 2012, the all-time high north of +$8.00 was actually posted during the month of August. Moral of the story, the market tends to post many of it’s extremes during August and September. The latest USDA crop-condition report showed another slight step backwards, dropping form 71% down to 70% rated “Good-to-Excellent”. The only state showing any improvement was North Carolina who jumped +1% from 34% to 35% GD/EX. States where conditions were left “unchanged” included: Indiana at 71% GD/EX; Iowa at 75% GD/EX; Minnesota at 77% GD/EX; and Missouri at just 26% GD/EX; Ohio at 76% GD/EX; States where weekly conditions deteriorated included: North Dakota -6% to 79% rated GD/EX; Illinois -5% to 76% GD/EX; Arkansas -3% to 71% GD/EX; Wisconsin -3% to 78%; Tennessee -3% to 68% GD/EX; Kentucky -2% to 70% GD/EX; Nebraska -2% to 83% rated GD/EX; Pennsylvania -2% to 72% GD/EX; Kansas -1% to 47% GD/EX; South Dakota -1% to 69% GD/EX. The crop is reported 73% in the “dough” stage compared to just 58% last year and just 56% using the five-year average. The USDA also reported 26% of the crop is now “dented” vs. just 15% last year vs. the five-year average of just 13%. All more proof to the bulls that the crop is and has been moving extremely quickly through maturation.

Soybean traders are trying to adjust to the USDA’s recent bearish adjustment to U.S. ending stocks. Bulls are saying the picture probably can’t get any worse than the current 785 million bushels, and that U.S. exports will eventually surprise to the upside. Bears are saying the U.S. soybean crop could easily generate a higher yield estimate if weather cooperates during the next few weeks. Bears are also saying nearby trade tensions with the Chinese appear to be getting worse not better. President Trump appears content and willing to raise the stakes. In fact, some top analyst and traders on Wall Street believe the odds are increasing for a full-blown trade war. A battle that might eventually push President Trump to place tariffs on all imported goods from China. If that happens, the biggest concern is relations longer-term. In this case meaning, will the Chinese remain openly receptive to buying large quantities of U.S. soybeans, or will their switching to alternative suppliers in South America become more of a permanent play? Weekly soybean export inspection were a bit of a disappointment and overall are down about -3% compared to last year at this stage. From a technical perspective, bulls are hoping psychological support at around $8.50 can hold until the market shows improved export demand or perhaps some type of setback in yield. Bears are thinking the NOV18 contract could try to retest the previous nearby lows posted on July 16th at $8.26^2 per bushel, or perhaps the much longer-term and more painful $7.77 level. . Perhaps the market will be able to find a bit of support on the most recent crop-condition estimate showing some overall deterioration. The overall crop fell -1% from 67% down to 66% rated “Good-to-Excellent”. The only states showing improvements were: North Carolina +6;, Louisiana +3%; Ohio +2%; Indiana and South Dakota +1%. States showing deterioration were: North Dakota -11%; Michigan, Nebraska and Wisconsin -4%; Kansas -3%; Arkansas, Iowa, Mississippi, Missouri, and Tennessee down -2%; Illinois, Kentucky and Minnesota were all down -1%. The USDA also showed 96% of the crop “blooming”, which is slightly ahead of the 92% five-year average. The percent “setting pods” was reported at 84% vs. the five-year average of 72%.

With the drought cutting EU wheat and coarse grain crop projections, it’s likely they may try and offset the losses with imported soybeans and oilseeds meals. For that reason, 2018/19 soybean and soybean meal import projections are boosted to 15.8 and 18.5 million metric tons respectively. Lower U.S. soybean prices vis-a-vis Brazil, a result of China’s duties imposed on U.S.-origin soybeans, have contributed to a surge in EU imports from the U.S. While China is substituting Brazil beans for U.S., the rest of the world is taking advantage of competitively priced U.S. supplies. (Source: USDA, FAS)

The Argentine peso weakened to a new low after the central bank unexpectedly raised its key interest rate to 45 percent and pledged to keep it there until October. The decision was the fourth surprise hike by the central bank this year as inflation refuses to slow. (Source: Bloomberg)

The Kansas City Fed’s report showed the farm economy is deteriorating as commodity prices move lower. They say credit conditions eroded in the second quarter of the year and bankers reported a modest increase in the number of borrowers unable to repay loans. When it comes to land values, they are slightly lower in the KC Fed’s district as well. However, the St. Louis Fed (which covers the Midwest) showed land values are holding steady as farmland edged up 1% in the second quarter. (Source: KC Fed, St. Louis Fed)

Indian Prime Minister Naredndra Modi celebrated World Biofueld Day 2018 by announcing that India will achieve 10% ethanol blending in petrol by 2022 and double it to 20% by 2030. Modi also said that 12 new biofuel refineries will be established across the country and that 175 bio CNG plants have already been set up in India. India meets more than 80% of its oil needs through imports but is aiming to decrease oil imports to save the country $1.74 billion with the increased use of biofuels. (Source: Biofuels Digest)

 

Morning Commentary

Sept corn down 5 ¼ at $3.525

Nov beans down 9 ¼ at $8.525

The DOW is down

USD is stronger

Crude oil down $.28 at $67.35

Good morning,

Corn traders are adjusting to the USDA’s most recent numbers. The bulls didn’t seem that surprised by the USDA going with such a high population count, but did seem a bit caught off guard by such a high ear weight, third highest in more than a decade. This allowed the USDA to come in with a higher yield than most were anticipating, +4.4 bushels per acre higher than last month and at a fresh new record 178.4 bushels per acre. The report showed that Illinois, Indiana, Nebraska, Ohio, North Dakota, and South Dakota are going to harvest better yields than last year. The yield for Iowa is forecast to be the same as last year.

Soybean bears are back up to bat as the USDA delivers a heavy blow to the bulls. U.S. production is now forecast at a new all-time record of 4.586 billion bushels, up +276 million on a higher yield. The first survey-based soybean yield is forecasting a 51.6 bushels per acre average, which is +3.1 bushels above last month and +2.5 bushels above last year. New-crop ending stocks are now projected at a whopping 785 million bushels, up +205 million bushels from last month. Global stocks are also raised aggressively higher. Bulls are arguing the U.S. ending stocks are currently a bit skewed as the USDA is ultimately underestimating total exports.

A ship carrying 70,000 tonnes of soybeans from the United States docked in the port of Dalian on Saturday, more than a month after it arrived off China’s coast just as hefty tariffs were imposed on U.S. goods, according to Thomson Reuters Eikon shipping data. Peak Pegasus has been sitting off the coast since July 6 when it arrived with about $20 million worth of soybeans according to Rabobank analysts. Reportedly, Louis Dreyfus is paying about $12,500 a day to keep Pegasus afloat in an attempt to wait out the trade war. I’m told grain stockpiler Sinograin made the purchase. (Source: Reuters)

A blockchain-based IBM partnership with global shipping colossus Maersk has now expanded to include 94 partners, Big Blue said Thursday. That includes shippers, customs houses, ports and others that have to wrangle paperwork as containers full of goods move around the world. The result is shipping times that dropped a whopping 40 percent on average, according to Marie Wieck, who leads IBM’s 1,600-employee blockchain work. Ultimately, like we always say, technology is deflationary and will lower prices, as I suspect it will do for anyone purchasing items being shipped from overseas. Get ready as blockchain will be at the farm door sooner than later.

Jurors in California on Friday ruled in favor of the plaintiff against Monsanto in the world’s first ever Round Up cancer case. The company was ordered to pay a total of $289 million in damages. Monsanto will appeal the verdict but still has hundreds of similar cases across the U.S.

 

Morning Commentary

Sept corn up ¾ at $3.72

Nov beans down ¼ at $9.1025

The DOW is up

USD is stronger

Crude oil up $.17 at $67.11

Good morning,

Van Trump says “Corn price have moved little to any as of late. In fact, since the last day of July the market has essentially traded sideways between $3.80 and $3.90 per bushel. The USDA’s August report is scheduled for release tomorrow at 11:00 AM CST. As I’ve been saying, it has the potential to inject a “wild-card” into the game. There’s always uncertainty about yield when switching from trend line analysis to survey based analysis. But we also have a ton of moving parts in regard to export forecasting. Hence some potentially unique variables will be in play, which could make the game of forecasting even harder than it normally is. Most seem to believe a higher yield estimate (perhaps raised +20 to +50 million bushels) will be partially offset by stronger demand. There’s also some talk that new-crop ethanol demand could also be raised +5 to +25 million bushels. Bears believe the U.S. yield is significantly larger than the USDA’s current 174 bushel per acre estimate. They are also quick to point out that the past few years the USDA has grossly underestimated the crop and has been forced to move production estimates higher into year end.”

Soybean bulls are talking about a bit more fear circulating inside China in regard to lack of available supply in the months ahead. There seems to be more talk in the headlines of Chinese imports lagging and Brazil not having near enough supply come late-Sept-Oct-Nov. There’s also talk of Argentine crushers needing to source more supply to help offset their domestic lack of production and heavier than expected Chinese buying. The uncertainty of the USDA report is also looming. Not only how the USDA will move in regard to yield, but also how they are playing demand for U.S. crush, exports and current Chinese trade relations.

Many cattle graziers across eastern Australia are being forced to sell livestock they can no long feed as drought has left pastures bare. Australian farmers slaughtered 659,00 head of cattle in June, the highest monthly figure in three years. The U.S. is absorbing the extra supply for , but American cold storage facilities have already amassed more than 2.5 billion pounds of excess beef, pork and other meats. Australia — the world’s fourth-largest wheat exporter — is also expected to see production of its staple wheat grain fall to a decade low as dry condition stymie yields. (Source: Reuters)

Chinese imports of soybeans fell 8% month-on-month to 8 million mt in July, according to figures from the General Administration of Customs of China, as domestic stocks remain at high levels amid sluggish demand for animal feed. The figures are down on the 8.7 million mt imported in June 2018 and 20% down on the 10.08 million mt brought in through ports in July 2017, and come as both soybean and soymeal stocks at Chinese ports remain near record highs. (Source: Agricensus)

 

Morning Commentary

Sept corn up ¾ at $3.715

Nov beans up 3 ½ at $9.0925

The DOW is down

USD is stronger

Crude oil down $1.00 at $68.17

Good morning,

Corn continues to consolidate, with the DEC18 contract seeming comfortable trading between $3.80 and $3.90 per bushel, at least ahead of Friday’s August USDA report and the uncertainty still surrounding trade negotiations and the U.S. yield. Most inside the market are thinking the USDA will be pushing yield higher from 174 to 176 bushels per acre. Bears believe the yield ultimately ends up closer to the 180 level, while bulls are thinking the crop eventually disappoints once it starts to come out of the field.

Soybean bulls are happy to see prices again slightly higher, stabilizing and finding support at or above $9.00 vs. the NOV18 contract. Nearby technical resistance is seen in the $9.20 to $9.25 range. A close above that area opens the door to $9.50. There seems to be more talk circulating that China will have little choice but to import U.S. soybeans sooner rather than later. There’s also more talk that heavier Chinese buying of meal from Argentina, will eventually force Argentine crushers to source more soybeans from the U.S. In other words the “demand” story is slowly swinging back towards the bulls. U.S. production is still somewhat of a wild-card, but most inside the market are forecasting a jump in yield by the USDA in their Friday report. The USDA currently has the yield forecast at 48.5 bushels per acre. Based on weather and overall growing conditions, most believe that number is going to push higher by perhaps +1.0 bushels per acre. There’s actually some inside the trade who believe the USDA is ultimately moving the yield north of +50 bushels per acre. In the process, U.S. new-crop ending stocks will probably again push higher from the current 580 million to over 630 million, a jump of +50 million bushels on increased production.

Government data released August 3 show that U.S. ethanol exports through June stood at 927.7 million gallons, up 33% from the first half of 2017 and on pace to shatter last year’s record of 1.38 billion gallons. Brazil had been the leading market for U.S. ethanol exports, receiving 345.9 million gallons, about 37% of total shipments. Canada has been the second-leading export market, with 159.5 million gallons of U.S. ethanol flowing north of the border in the first six months of the year. That is up 8% from a year ago. (Source: RFA)

U.S. trade officials have agreed to allow commercial imports of U.S. poultry meat and products into Morocco for the first time. Initial estimates indicate Morocco could be a $10 million market, with additional growth over time. Morocco had prohibited imports of U.S. poultry until now. The U.S. is the world’s second largest poultry exporters, with global sales of poultry meat and products of $4.3 billion last year. (Source: USDA)

A Brazilian judge has suspended the use of products containing the agrochemical glyphosate. The judge ruled the new products containing glyphosate could not be registered in the country and existing registrations would be suspended within the next 30 days, until the government reevaluates their toxicity. The decision also applies to the insecticide abamectin and the fungicide thiram, could be subject to multiple appeals. This ruling very clearly will affect widely planted glyphosate-resistant soybeans from Monsanto. This news brings up tons of questions on what this means to the world’s largest exporter of soybeans. We will keep you posted as this situation unfolds. (Source: Bloomberg)

A ship with U.S. soybeans set sail for China last week, according to data released Monday, showing that the Asian nation is still importing some quantities of the commodity grown in America despite tariffs imposed by the government in July. Bloomberg reports a bulk carrier departed Gavilon Group LLC’s export terminal in Kalama, WA, for Shanghai on July 29, carrying the first cargo of American soybeans destined for China in three weeks, according to a reportpublished by the U.S. Department of Agriculture.

 

Morning Commentary

Sept corn up ½ at $3.715

Nov beans up 9 at $9.025

The DOW is up

USD is weaker

Crude oil up $.68 at $69.69

Good morning,

Corn prices are slightly higher this morning as traders continue to debate U.S. yields. Bears are saying recent rains have helped ease some of the stress in areas that have been battling the elements. Bulls are saying the rains have missed several important areas and the extreme heat is now clearly causing some complication. There’s also talk that crops might underperform a bit as many have been hurried through the finishing cycle, ultimately pushing the crop to early maturity. The USDA decided to pull their weekly ratings back a bit with total conditions falling from 72% rated “Good-to-Excellent” down to 71%. States deteriorating the most were: Pennsylvania -10%; Missouri -7%; North Dakota, South Dakota and Texas -5%; Iowa and Tennessee -3%; Kentucky and Minnesota -2%; Nebraska -1%. Wisconsin was left “unchanged”. Illinois, Kansas and Michigan up +1%; Indiana +2%; Ohio and North Carolina +5%; Colorado +9%. U.S. corn in the “dough” stage is reported at 57% vs. the 5-year average of 37%. Corn in the “dented” stage was reported at 12% vs. the 5-year average of 6%. The short term trend for December corn is positive.  The target is 399.  A close under 373.75 would resume defensive trade.  Short December corn, system traders are likely to find buy stops around 388.5

Soybean bulls are happy to see the USDA finally reducing their crop-condition estimate. Prices were up double-digits in the overnight, but continue to trade around the $9.00 level. Weekly ratings fell from 70% rated “Good-to-Excellent” last week down to 67% this week. States deteriorating the most are: North Dakota -9%; North Carolina -8%; Missouri -6%; Kentucky and Mississippi -5%; South Dakota -4%; Iowa and Tennessee -3%; Minnesota and Nebraska -1%; Illinois, Kansas and Louisiana “unchanged”; Indiana and Wisconsin +1%; Arkansas +2%; Michigan +3%; Ohio +7%. Soybeans “blooming” are reported at 92% vs. the 5-year average of 86%. Soybeans “setting pods” were reported at 75% vs. the 5-year average of 58%. The short term technical trend for November beans is positive.  Consecutive closes above 915.75 would signal a run to 943, perhaps 971.  Closing under 885.5 undermines recent bull action.  Short November beans, system traders will find buy stops above 908. 

A record setting 272.6 million pounds of beef was exported from the U.S. in June. The number fell just short of an all-time high for any month of 272.8 million pounds in May.  Beef exports were up almost 37 million pounds from year-earlier levels. Essentially, the first half of the year was up close to 15% compared to last year. Pork exports totaled 454.3 million pounds in June, which was the second highest on record for the month behind 2008’s 461.3 million pounds and up 6.0 million pounds from last year.

China can cut its soybean imports by 10 million mt in 2018 by expanding the use of low-protein feed, increasing imports of soymeal substitutes and by upping its domestic soybean production, researchers at the Chinese Academy of Sciences said Monday. The research showed that lowering the share of protein in animal feed, providing four specific amino acids were added to the feed, would not have a significant effect on the output or quality of chicken and pork. (Source: Agricensus)

Supply chain provider Savage Companies and grain and milling firm Bartlett and Company have completed the merger of their businesses to form a combined entity, Savage Enterprises. The merger aligns two of the largest privately-held, family-owned companies in North American agricultural and energy supply chain markets, each with decades of experience providing transportation, logistics and materials management services. The combined businesses have nearly 4,800 Team Members with about 280 locations across the United States, Mexico, Canada and Saudi Arabia. (Source: FeedandGrain)

 

Morning Commentary

Sept corn up ½ at $3.7025

Nov beans down 10 ½ at $8.9175

The DOW is up

USD is stronger

Crude oil up $.71 at $69.20

Good morning,

Corn traders are bracing for what could be a volatile week. Not only are political trade headlines swirling, but we also have the August USDA report scheduled for release on Friday. Bulls could have a bit of an edge early in the week as there’s been some good news surrounding NAFTA, with talks that the U.S. and Mexico are hoping to have things hammered out by the end of August. There’s also more talk of dry weather impacting corn and soybean production in parts of China, particularly the southern portions of northeast China and portions of the North China Plain. Traders later in the week will become more anxious and interested in seeing how the USDA adjusts their current 174 yield forecast and total export estimate. A couple of well known industry firms released updated yield estimates late last week, bumping their forecasts higher to between 176 and 178.1 bushels per acre. With crop-condition rating looking as if it’s going to stay above +70% “Good-to-Excellent”, it’s hard to imagine the total yield going anywhere but higher. From a technical perspective, the bulls will be trying to take out last weeks high of $3.88^4. On the downside, bulls are hoping last weeks low was $3.77^4 will hold as support. Longer-term, the $3.90 to $4.10 area still looks like more heavy resistance.

Soybean bulls are hoping to find some renewed momentum to take out last weeks high of $9.22^2. We made the push on what was perceived to be improved trade talks with the Chinese. Those headlines were then “Trumped” by talks out of Washington that we could be raising the stakes by increasing tariffs form 10% to 25% on an additional $200 billion of Chinese imports. The market seems comfortable hovering around the $9.00 level until more is known about Washington and U.S. weather. The USDA report coming out on Friday  could also bring some additional insight and volatility. Bears want to argue that U.S. yields are moving higher, while the bulls argue that a decline in Chinese shipments have been more than offset by an increase in demand from other nations. Regardless, it’s nice to see the market has recovered substantially from the near 10-year low posted back in mid-July at $8.10^4 per bushel.

Reducing market access barriers is a critical element of the councils trip to Vietnam and Indonesia. The Indonesian government has had an ethanol policy in place since 2006, but the mandate has largely gone unmet. Indonesia currently imports half of its gasoline demand, and the government has set a goal for renewables to represent 23 percent of the country’s energy mix by 2025 and to reduce greenhouse gas emissions by 29 percent by 2030. Vietnam started offering E5 on Jan. 1, 2018, with a goal to move to E10 by 2020, as total gasoline consumption rates are expected to grow by nearly 10 percent annually. (Source HighPlainsJournal)

Brazilian ethanol imports recovered in July, surging to 142.45 million liters from 68.77 million liters in June, and were also 93% higher year on year, Secretariat of Foreign Trade data showed Friday. Imports in the first seven months of 2018 totaled 1.36 billion liters, down 0.45% year on year, the data show. (Source SPGlobal)

Soil Health Partnership, a program launched by the National Corn Growers Association in 2014 is catching on as more farmers are getting results. The organization helps farmers do economic assessments to understand where the farmer is making or losing money. Together, they consider today’s technology, weather and markets to decide on methods that will improve the soil, help the environment and also make the farm more profitable.  Read more HERE what producers in the midwest are doing and the results they are seeing.

 

Morning Commentary

Sept corn up 3 ½ at $3.685

Nov beans down 5 at $8.9675

The DOW is down

USD is stronger

Crude oil down $.35 at $67.31

Good morning,

Corn prices are up a bit this morning, with the DEC18 contract back above $3.80. Prices eased a bit yesterday on renewed worries about trade, a slightly improved and more cooperative U.S. weather forecast, and a pullback in the macro space, i.e. oil prices falling under a little nearby pressure. We continue to hear private traders using corn crop product estimates with a yield averaging between 177 and 180 bushels per acre. Bulls continue to talk about strong U.S. demand for corn. U.S. exports remain robust and demand for U.S. ethanol also remains strong. There’s also a massive livestock herd that is providing strong demand for corn. From a technical perspective, the DEC18 contract has run into stiff nearby resistance up around $3.90. From there the trade sees additional hurdles at the $4.00 and $4.20 range.

Corn numbers saw an increase in both corn used to make ethanol as well as ethanol as a percentage of corn use. The USDA reported that corn consumed to make ethanol and other uses totaled 517 million bushels, up 6% year on year, while ethanol used accounted for 91.2% of total corn use.

Soybean bulls are having to backpedal on new talk out of Washington that President Trump is kicking around the idea of raising the stakes in regard to Chinese trade negotiations. On Tuesday, the trade was overly excited on thoughts that we were reigniting trade talks with Chinese officials. Then on Wednesday, the trade flops and turns over on news that President Trump might raise the 10% tariffs to 25%.. From a technical perspective, the NOV18 contract is still looking at stiff resistance around the $9.20 level. We haven’t been able to rally back and close above this number since June 18th. The next round of resistance is thought to be in the $9.45 to $9.55 range. On the downside, I would like to belie we can hold support in the $8.60 to $8.70 range.

USDA released a new record for the month of June at 169.6 million bushels from last year’s consumption of 148.2. The trade expected 168.8 which suggest the USDA might be understating 2017-2018 crop by 10 million bushels or more.

Through a painstaking process, scientists at Texas A&M have successfully introduced a genetic trait that allows cotton to thrive in soil that has been enriched with phosphate, which has one less oxygen atom than the phosphate used in traditional fertilizers. Because the weeds don’t have the same trait, they are essentially starved of nutrients. Unfortunately, producers can no longer count on spraying fields with the same old herbicides as most weed populations have developed three-way resistance, resulting in over $9 billion being spent each year for a magic bullet. Cotton growers may have a glimmer of hope if the field tests at College Station can transfer to full-scale operations. Kater Hake, vice president of agricultural & environmental research for the industry group Cotton Inc., says this is the “Superman” of weed control and couldn’t come at a better time. Cotton growers in Texas, the nations leading producer of the crop, contribute an estimated $24 billion to the economy and only see that growing as a resurgence for the natural fiber continues to increase, especially in light of its sustainability versus petroleum-based polyester. I’m told the ptxD gene that allows absorption of phosphate was first isolated by William Metcalf of the University of Illinois, then following that, a Mexican research team patented the concept of introducing the gene into plants to make them more competitive against weeds in the field. It’s worth noting the process takes a good bit of time as petri dishes full of cells take an average about 10 months to produce a plantlet. From the plantlet, it can take another year to grow a plant with a root system strong enough to survive in the greenhouse and produce seeds. But now that the greenhouse plants are producing seeds for the next steps, we can expect to validate or not the results soon. Interestingly, the test field was chosen because it is naturally low in phosphorous, as a high-phosphorous field would feed the weeds and defeat the purpose. Also, the discovery brings to light the problem of overuse of phosphorus, which should go dimish if trials are successful. Bottom line – hopes are that farmers will be able to spend less on inputs including fertilizers, herbicides and water otherwise getting “stolen” by the weeds; phosphorous in the form of phosphate will be depleted at a slower rateand less of the nutrient will wash off into waterways, where it contributes to algae blooms plaguing the world’s oceans and great lakes. Another great discovery by researchers! (Source: myplainview.com)

 

Morning Commentary

Sept corn down 2 ¼ at $3.70

Nov beans down 15 at $9.04

The DOW is down

USD is stronger

Crude oil down $1.08 at $67.68

Good morning,

Corn prices are weaker to start the morning. Bulls are talking about improved trade talks involving NAFTA and perhaps steps in the right direction between the U.S. and China. Bulls are also building a case for a few production setbacks in areas of the U.S.. Iowa producers are talking about temperatures next week that could exceed 100 degrees along with multiple days of extreme nighttime heat. There’s also talk that the funds might be moving from a net-short to a more flat position ahead of the upcoming August USDA “Supply and Demand” report. The big wild-cards in the report will obviously be the latest USDA export estimate and the USDA first survey based corn yield estimate. With both numbers capable of a large deviation from their current estimates, traders might be a bit hesitant to hold large open positions.

Soybean traders are talking about the market having to perhaps back-and-fill a bit here, following yesterday’s strong gains. Bulls are still talking about rumors that the U.S. and China might be moving a bit closer to restarting trade talks. I’ve personally heard no specifics, other than the fact representatives of Treasury Secretary Steve Mnuchin and Chinese Vice Premier Liu He were working toward a restart of some sort. Demand for U.S. soybeans remain strong and bears continue to backpedal. From a technical perspective, the new-crop NOV18 contract didn’t even seem to flinch at the $9.00 level. It also traded beyond the 38% Fibonacci number and is now eye-balling the $9.40 to $9.50 area to the upside.

Chinese purchases of soybeans have slowed significantly, according to market sources, as a weaker Chinese yuan has driven up the cost of importing soybeans that are traded in dollars and turned crush margins negative. China’s central bank has allowed its currency to drift 8% since mid-February to 6.8 versus the dollar in a bid to help industrial exporters hit by the US-China trade spat. However, it has had the opposite effect on China’s crushing industry. (Source: Agricensus)

Sales of plant-based foods developed to directly replace animal products like dairy, meat and eggs rose by more than 20 percent in one year, topping $3.3 billion in revenue, according to a new report from Nielsen that was commissioned by the Plant Based Foods Association. Milk alternatives, including almond and soy beverages, accounted for more than half of those sales and had a 9 percent growth rate over the year before.

 

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