Morning Commentary

Dec corn unchanged at $3.6925

Nov beans up 4 ¾ at $8.63

The DOW is up

USD is stronger

Crude oil up $.82 at $71.79

Good morning,

Corn bulls are happy to see prices at their highest levels since mid to late-August. Producers should be keeping a close eye on the DEC19 contract as it’s now back above $4.00 per bushel. The USDA delivered a slightly bullish surprise, by lowering their production estimate by -49 million bushels from 14.827 down to 14.778 billion. The USDA reduced their U.S. average yield estimate by -0.6 bushels per acre to 180.7. If you look deeper inside the numbers, you can see the USDA slightly trimmed the number of ears per acre, but they’re still record-large. At the same time, they slightly raised their implied ear weight, which is also record-high. Beginning stocks were raised by +138 million bushels. Feed and Residual was lowered by -25 million bushels. Exports were raised higher by +75 million bushels. Net-net, total ending stocks were bumped higher by +39 million bushels, but less than the trade was anticipating. Global corn stocks were also raised slightly higher from 157.03 to 159.35 MMTs.

Soybean bulls avoid a bearish bullet, as the USDA offsets a higher yield estimate of 53.1 bushels per acre, with a -514,000 reduction in harvested acres. Increases for North Dakota, Nebraska, and Iowa were more than offset by reductions in many other states. Interestingly, the USDA is now showing the number of pods per acre at 1,900, a fresh new record. Beginning stocks were raised higher by +43 million bushels. Demand was left “unchanged”. Global soybean ending stocks were raised higher from 108.26 to 110.04 MMTs. Global soybean output is projected at a record 369.5 million tons, up 0.2 million with higher production for Canada partly offset by lower projections for India, Mexico and the U.S..

Brazilian farmers are expected to harvest up to 238.54 million tonnes of grain in the 2018/19 season, the government said on Thursday, with the South American country potentially breaking its production record thanks to expected corn and soy bumper crops. In the prior season, Brazilian farmers harvested some 227.91 million tonnes of grains like soybeans and corn, said Conab, the government food supply and statistics agency. Much of the gain is expected to be in corn, with output expected to rise as much as 12.75 percent to 91.08 million tonnes, Conab said in its first forecast for the 2018/19 season, which kicked off in September. (Source: Reuters)

U.S. beef producers exported more than $750 million in August, an all-time high, according to USDA data compiled by the U.S. Meat Export Federation. The total is a 11% year-over-year increase from August 2017.


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