Morning Commentary

Dec corn down 2 at $3.6625

Nov beans down 2 ½ at $8.4775

The DOW is up

USD is weaker

Crude oil up $.46 at $67.28

Good morning,

Corn bears are pointing to stiffer export competition from South America and Ukraine. There’s really no weather story to excite the fundamental bulls and the macro funds continue to point towards slowing global growth, a strong U.S. dollar, weaker crude oil prices, and no real sign of a bullish commodity story. We also have the continued talk of increasing corn acres here in the U.S., many sources thinking +3 to +4 million more in 2019. The extremely strong and bullish demand story has been keeping prices from falling under more pressure. .  The short term outlook is neutral-slightly positive but momentum turned lower.  A close outside 362.25-373.5 should provide fresh direction.  System types are short; risking 371.  Friday is LTD for November options.  The implied trading range for Dec the balance of this week is 363-370.

Soybean traders continue to look for longer-term direction or guidance regarding Chinese trade negotiations. Reuters, Karen Braun, pointed out recently that on average 76% of U.S. soybean shipments in October are to China… Not this year! This is also when our U.S. exports typically tend to explode higher. Not this year! Through the first seven weeks of the marketing year, USDA numbers show U.S. export to China down over -95% and all U.S. soybean exports down over -40%. The short term outlook is negative but the market is oversold.  A close under 842.5 would signal a new wave down.  A close over 875.75 is needed to confirm an end to the pullback.  System types are short; risking 867.5.  Friday is LTD for November options.  The implied trading range for Nov the balance of this week is 840-857.

China’s Ag Ministry said they are banning the feeding of kitchen waste to pigs after linking the practice to the majority of the early cases of African swine fever. China has reported more than 40 outbreaks of the highly contagious disease since early August, with farms across 12 provinces and municipalities already infected.

Cargill opened a new $28 million feed mill in Binh southern Vietnam making it the company’s 12th animal nutrition facility in the country. The 48,000-square-meter feed mill produces a wide portfolio of poultry and swine feed and has an annual capacity of 240,000 tons. According to Cargill, animal protein consumption has been increasing in Vietnam and the trend is expected to continue in line with the country’s rapid economic growth and regional trends.

The Environmental Working Group released a second round of research that indicates trace amounts of the herbicide glyphosate in common foods for human consumption. The first report released back in August, sparked media attention as well as criticism over its claims that breakfast foods contain trace amounts of the chemical and should be avoided. The group honed in on oat-based cereals, snack bars and granola made by General Mills and Quaker. The nonprofit found low levels of glyphosate in 28 products tested and deemed nearly all to have unsafe amounts of the herbicide. Understand, the Environmental Working Group scientist use a much lower safety standard than the one the EPA uses. (Source: Bloomberg)


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