Morning Commentary

Dec corn up 1 ¼ at $3.725

Jan beans down 4 at $8.8375

The DOW is down

USD is stronger

Crude oil up $.26 at $63.40

Good morning,

Corn continues to trade in what appears to be a comfortable range between $3.50 and $3.90 per bushel. Bulls argue we’ve ratcheted up the lower end to perhaps $3.60 per bushel, now that many suspect we will eventually see some type of reduction in the current U.S. crop estimate. Bears point to the possibility of slowing demand as exporters in Ukraine and South America have become more competitive with U.S. suppliers. Bears also point to the USDA giving an early forecast for +2.9 million more corn acres being planted in 2019-20, jumping from an estimated 89.1 million to 92 million.

Soybean bulls will be paying close attention to headlines about Chinese trade relations. There was some talk circulating over the weekend that perhaps some special concessions were going to be made that would allow China to buy U.S. crude oil in an effort to support Iranian sanctions. The USDA’s early look is for planted soybean acres to fall from 89.1 million down to 82.5 million acres, which was perhaps a bit more of a cut than some were anticipating. At the same time,  Informa lowered their U.S. soybean yields estimate form 53.0 down to 52.6 bushels per acre. Earlier in the week, the trade was digesting headlines that FC Stone was lowering their yield estimate from 54.0 down to 53.2 bushels per acre.

More than 200 organizations are backing a pair of measures introduced by Sen. Cory Booker and Rep. Mark Pocan that would pause mergers within the agriculture industry for 18 months, giving lawmakers time to update antitrust laws to better address industry consolidation. Massive tie-ups have caused declining farm prices and incomes, stagnant wages and increasing food prices according to their letter.

Bunge CEO, Soren Schroder says beans are no longer moving to west coast for export, but that it doesn’t mean there are no bids at this time. He said it just means they are most likely directed toward crushing plants in the domestic market or export channels that take the flows to the Gulf. He went on to comment that “it’s building up a historically high level of soybean stocks that will carry through this year, and into next.” (Source: Agupdate)


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