Morning Commentary

Dec corn up 2 at $3.63

Nov beans up 3 ¼ at $8.45

The DOW is down

USD is stronger

Crude oil down $.60 at $66.73

Good morning,

Stocks are down aggressively this morning as both Amazon and Google released disappointing earnings after yesterday’s close. The Nasdaq looks as if it will continue to have its worst month since the financial crisis.

Corn bulls backpedal on the second consecutive week of poor export sales data. The USDA showed weekly corn exports at around 13.8 million bushels, which is significantly below the 36 million bushel per week average that most inside the trade believe we need to see to reach the current export forecast. This is also substantially below the 50 million bushels that were exported last year during the same week.

For the week ending October 18, total inspections of grain (corn, wheat, and soybeans) for export from al major U.S. export regions reached 2.55 million metric tons; down 6% from the previous week, down 24% from last year and down 16% from the 3 year average. (Source: USDA, GTR)

Soybean bears are pointing to another round of weak export sales data. For the week, the USDA showed soybean sales at just 7.8 million bushels, which is well below the 30 million bushels per week that’s needed to meet the current USDA forecast. It’s also massively below the 78 million bushels exported last year during the same week. Bottom-line, the Chinese are out of the market and nobody knows exactly how long the current trade conflict is going to last. Bears are also able to point to cooperative weather in South America, keeping the door open for perhaps all-time record production?

Trade tensions have taken another negative turn, with the U.S. demanding that China come up with a specific plan to stop allegedly stealing technology. Until Beijing does so, the U.S. will not resume trade negotiations, according to a report Thursday in The Wall Street Journal. The latest impasse jeopardizes a meeting between President Donald Trump and China’s Xi Jinping scheduled for the end of November at the G-20 meeting. There had been some hope that Trump and the Chinese president could make progress on the myriad trade issues between the two sides, a major focus being forced technology transfers. China has sought to resume talks but the U.S. has refused until Beijing addresses the tech issue.

More than 93 percent of 2019 model year (MY) vehicles are explicitly approved by the manufacturer to use 15 percent ethanol blends (E15), according to the results of an annual analysis of warranty statements and owner’s manuals conducted by the Renewable Fuels Association (RFA). That is up from last year, when approximately 89 percent of MY 2018 vehicles were formally approved by automakers to use E15. (Source: RFA)

John Holz spent 23 years at the University of Nebraska studying algae blooms and set himself apart from other researchers after realizing that simply dialing down phosphorus inputs to lakes, by culling fertilization and infiltrating storm water into soil, was not enough to halt the blooms. According to Holz, the issue was hiding beneath the water itself. From what I understand, lake-bottom sediment can grow saturated with phosphorus over time, from all the excess fertilizer runoff from fields and yards over the years. I’m told, even when new sources of phosphorous are kept out of the water, “legacy phosphorus” already banked in the sediment can rise back into the water under low-oxygen conditions, haunting the lake with algae blooms for years. While at Nebraska, Holz learned about a possible fix in 2010 and left the University to start Hab Aquatics and address the problem. His research led to the finding that Aluminum sulfate or alum has an affinity for phosphorus, meaning it will grab the phosphorous as it makes its way to the bottom. From what I hear, the results for the surface bloom are almost immediate as the chemical transforms the murky green water back into its clear beginnings. More impressively is the alum floc, short for flocculation will rest in the sediment continuing to bind phosphorus for years, even decades. Key to Holz’s success has been his fine tuning of the process in order to deliver a precise amount of alum to the right part of the lake at the optimal time of year. I hear that after 76 treatments, Holz has never had an unhappy customer. It’s worth noting that as with any method of ecosystem restoration, dumping thousands of gallons of alum into a lake is not risk-free. I’m told if pH plummets during an alum treatment, the usually benign chemical can turn toxic for wildlife. After a parks department in Washington state shelled out a typical $100,000 for an alum treatment in 2008, a botched application killed hundreds of fish. Bottom line is that done at the right time of year, in the right amounts, and in the correct locations, infected lakes can be returned to providing the safe recreational opportunities they were intended for. Imperative in the whole process will be finding better ways to keep the phosphorous out in the first place as the alum in the sentiment has no effect on that. (Source: NationalGeo, habaquatics)


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