Morning Commentary

Dec corn down 2 at $3.585

Nov beans up 3 ½ at $8.445

The DOW is up

USD is weaker

Crude oil up $.36 at $72.44

Good morning,

Corn bulls are talking about continued rumors circulating around E15 and thoughts that President Trump will soon announce he is lifting Summer limits on high-ethanol gasoline. Essentially this would be a policy change allowing year-round sales of gasoline with more ethanol. To this point, current rules restrict the sale of E15 from June 1 to Sept. 15 in areas where smog is a problem. The new policy would allow E15 to be exempt from the previous restrictions. Several insiders are saying it could potentially add +100 to +200 million bushels of demand, which would clearly help the balance sheet become less bearish. Although the timing of the announcement still seems to be up in the air, we are hearing more talk and confirmation that it’s coming down the pike. The USDA showed U.S. corn conditions improving from 68% to 69% rated GD/EX.  Corn inspections for the week ending September 20th were reported well above last year at 1.26 MMT’s vs. just 779,971 MTs. The latest Cattle-on Feed report also showed a record number “on feed”, up almost +6% to 11.125 million head, which I have to believe is a positive for overall feed demand.

Soybean prices continue to consolidate near the bottom of the barrel. Technical bulls are arguing a close above-$8.50 could help to build a longer-term floor. Unfortunately, bears still see rising tensions between U.S. and Chinese officials as reason enough to keep a lid on prices. Bears are also pointing to a massively burdensome U.S. ending stock number and record setting yield and record setting total production. The USDA showed improved conditions, going from 67% to 68% now rated GD/EX. The USDA is also showing the U.S. harvest is off to a very fast start with 14% now complete vs. the 5-year average of 8%. Big production states like Iowa, Illinois, Minnesota and Nebraska are all running well ahead of schedule and still showing some extremely strong “Excellent” ratings.

Around two years ago, the then 10-person team of Bowery, an indoor farming startup, started growing a small array of leafy greens out of what was once a shipbuilding yard in Kearny, New Jersey. By growing produce in trays, stacked high in rooms whose temperature, lighting, and humidity is tightly controlled by a proprietary operating system, Bowery’s farming requires no soil, and instead delivers nutrients to its array of leafy greens via a hydroponic system that uses 95% less water than traditional agriculture. In terms of output, the new farm is about 30 times more productive, and the startup has greatly diversified its crop output, adding bok choy, cilantro, and parsley to its original kale, spinach, and basil.

The U.S. meat market is massive! There seems to be more and more interest surrounding technology and bio companies that might soon disrupt the food space. Did you know, it only takes about 7 to 9 weeks for a chicken to go from new chick to a 4-pound bird. Add another 10 weeks and the birds will weigh closer to 10 pounds. Pigs take about 6 months to grow to 250 pounds, their typical slaughter weight. Cows take even longer, at about 2 years. By comparison, it only takes a laboratory 10-18 days to grow synthetic beef. That’s crazy to think about. Several start-ups are developing lab-grown beef, pork, poultry and seafood—among them Mosa Meat, Memphis Meats, SuperMeat and Finless Foods. And the field is attracting millions in funding. Just last week, Silicon Valley clean meat startup “New Age Meats” made history by letting journalists taste the first cultured pork sausage made in a lab. Despite strong reviews and talk that the lab grown meats taste good, several CEOs of the leading cultured meat companies, say getting to a price consumers would be willing to pay at a restaurant is still several years away. The process is currently a bit expensive. From what I understand, the meat is made by first taking a muscle sample from an animal. Technicians collect stem cells from the tissue, multiply them dramatically and allow them to differentiate into primitive fibers that then bulk up to form muscle tissue. Mosa Meat says that one tissue sample from a cow can yield enough muscle tissue to make 80,000 quarter-pounders. Interestingly, the state of Missouri might have just added a new roadblock. Just last month the state became the first in the U.S. to enact a law stating that the word “meat” cannot be used to sell anything that “is not derived from harvested production livestock or poultry.” Below are some other interesting thoughts and data involving meat…

Who Eats The Most Meat? It is believed that Australians consume the most meat at 205 pounds per person every year! The average American consumes 201 pounds of meat annually.

#1 Chicken Is the Most Eaten Meat: The average American consumed just over 92 pounds of chicken last year, an all-time record dating back to 1960 when the data was first collected. Almost all of that are broilers, the ones that take less time to grow. That means the average American eats a whole chicken about every 2 weeks, and the country as a whole consumes over 8 billion chickens annually. Chicken’s appeal is seemingly timeless with consumption rising every year since the 1960s.

#2 Beef Remains A Distant Second: The typical American consumes about 56.9 pounds of beef. Most reports show “Peak beef” being back in 1976, when per capita consumption peaked at 94.1 pounds per person. Believe it or not, Uruguay consumed the most beef per capita in the world followed by Argentina and Hong Kong. All three countries consumed more than 100 pounds of beef per person..

#3 Pork Popularity Steady: The average American consumes about 50.1 pounds of pork. Consumption here has been very stable over the last 50 years. China actually consumes about 75 pounds of pork per person.


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