Morning Commentary

Dec corn down ¾ at $3.6675

Nov beans up 3 ¼ at $8.6925

The DOW is up

USD is stronger

Crude oil up $.06 at $75.29

Good morning,

Corn bulls are happy to see the market push beyond some of it’s short-term technical moving averages. The heavy rains in the forecast has the market talking about harvest delays and late-inning disease and quality concerns. The question everyone is now asking is how much more “risk-premium” needs to be added, considering we are still more than likely going to harvest a record average yield? . As a producer, you should note, the DEC19 contract has closed back above $4.00 per bushel and is worth watching closely.

Soybean bulls continue to look at more and more rain in the U.S. forecast. The question now is how long will some producers see their harvest delayed? Bulls argue that a few weather guru’s are now forecasting flooding and delays for a few areas that could extend for multiple days and perhaps a couple of weeks, mostly in the upper Midwest, which could ultimately put some fields at risk of a cold snap. Several traders are saying the new deals recently made with Canada and Mexico are perhaps providing a little psychological support. There’s also talk and encouragement coming from proposed trade talks improving with Japan.

Soybean planting in Brazil’s Parana state, the country’s number 2 soy producers, reached 29% of the expected area this week compared to 16% a year ago, the states ag statistics agency Deral said. Planting of first crop corn was at 70% of projected area also well ahead of last year when at this time farmers had planted only 33%. (Source: Reuters)

The FDA has detected minimal amounts of glyphosate residue in corn and soybean samples, and found no trace of the herbicide in more than half the commodities it tested. They analyzed for glyphosate and glufosinate residue levels in 274 grain corn, 267 soybean, 113 milk, and 106 egg samples. No samples contained violative levels of glyphosate or glufosinate; and no residues were found in the milk and egg samples. commissioner Scott Gottlieb said the FDA test result for human and animal foods are good news for the public. (Source: FoodSafetyNews)

Drought conditions on the Canadian prairie have reduced harvest yields and caused more yearling cattle to move into feedlots earlier. The U.S. is well positioned to fill this domestic grain shortfall due to proximity, including northern U.S. ethanol plants that offer U.S. DDGS for local feed rations. Overall, Canada has purchased 1.44 million metric tons (56.7 million bushels) of U.S. corn thus far in the 2017/18 marketing year (Sept. 2018 – July 2018), more than double the previous marketing year, in addition to 605,000 tons of U.S. DDGS. (Source: USGC)

Increasing death rates of sows over the last three years has lead researchers to collaborate to get a fix on the problem. Industry numbers show the rise in the sow death rate has increased to 10.2% from 5.8% three years ago. Mortality rates are becoming a concern for the industry at a time it is experiencing rapid growth. Data shows there were approximately 73 million hogs being raised on U.S. farms in June, which happens to be the highest number recorded since the USDA began keeping records in 1964. Interestingly, most consumers are unaware of the growth as nearly 97% of hogs are raised in closed barns or confined feeding operations. Keep in mind, for years hogs have been dying for a multitude of reasons, ranging from accidents to disease as well as heart problems, but experts believe the recent rise in numbers may be caused by prolapse, or the collapse of the animal’s rectums, vaginas and uteruses. While researchers are seeking data and solutions, there are some who are wondering whether the trend towards engineering farm animals for profit is somewhat to blame, meaning there is an argument that confinement hog operations just aren’t designed to be humane or sustainable over the long haul. While prolapse has many causes, it is believed that the strict confinement within feeding operations are a contributing factor as sows are often stuck in the same position for most of their adult lives. There are also groups who believe the industry has bred sows to have less back fat in response to consumers eating less fat, but at the same time, the animals were pushed to produce more and more babies. Biologically, that creates some concerns as the sows bones are thought to be weaker and they don’t have enough fat to support the reproductive process. In a nutshell, a few groups are arguing that new-age sows may have been bred to their biological limits and they are trying to tell us that. I should note, producers are on board and definitely wanting to find the answer and a solution so death rates can hopefully stop their ascent, especially as U.S. pork exports are forecast to see continued growth. (Source: Civileats, vetmedISU)


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