Morning Commentary

Dec corn up 1 ¼ at $3.47

Nov beans down 1 ½ at $8.285

The DOW is up

USD is weaker

Crude oil up $.15 at $71.27

Good morning,

Corn prices are steady this morning but have tumbled -20 cents since the USDA released their increased record yield estimate mid last week. Prices posted fresh new contract lows on Tuesday and bears are calling the recent uptick nothing more than a simple dead cat bounce, with lower-lows coming in the days ahead. Bulls quickly point to “demand” for U.S. corns remaining robust.  The short term trend for December corn is bearish.  The market is vulnerable to a near term test of 339.5.  There’s a gap on the continuation chart at 332.5.  A close over 358.5 warns of corrective action.  Short Dec corn, system traders will find buy stops around 348. 

Soybean bulls are hoping the bears might be running out of bullets. It sounds like Washington might only have one more major tariff bomb in their arsenal. At the same time a record setting U.S. crop has been well advertised and the trade has perhaps already started swallowing thoughts of the balance sheet getting larger. There’s some bullish weather headlines circulating as well, with weather forecasters calling for perhaps a heavy frost prior to October 1st for parts of the Dakota’s and Minnesota. Bulls are also talking about China buying more supply from Argentina, and in turn Argentine crushers buying more U.S. soybeans in the days and weeks ahead.  The technical trend for Nov beans is bearish.  The market is vulnerable for a near term drop to 810.50.  Long term support is at 780.  A close over 836.25 warns of a minor change in trend.  Short November beans, system traders will find buy stops around 836.25. 

Six countries have banned pork imports form Belgium after the EU nation discovered the highly contagious African swine fever in two dead boars last week. The six nations include China, South Korea and Mexico and represent about 50% of Belgium’s total for exports. (Source: AP)

Brazil’s biggest poultry processor, BRF SA, is struggling to keep stocks of corn based ethanol as competition for supplies from the center of the country is climbing. Some companies are starting to use DDG’s in areas where corn-based ethanol is produced.

The latest quarterly USDA Outlook for Ag Trade provided it first agricultural export forecasts for fiscal 2019 (October 2018 – September 2019). globally, U.S. Ag exports are forecast to total $144.5 billion, a $500 million increase over the fiscal 2018 forecast. At the regional level, however, exports to Asian countries are forecast to decline by $3.2 billion — the result of an expected decrease of $7 billion in Ag exports to China form the 2018 forecast of $19 billion. Chinese demand for U.S. soybeans is expected to be sharply lower because of China’s retaliatory tariffs, which also curb demand for other products, including sorghum, pork and products, and dairy products. (Source: USDA, ERS)


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