News

Morning Commentary

Dec corn down ½ at $3.6425

Jan beans down 6 ¾ at $8.855

The DOW is down

USD is weaker

Crude oil down $.78 at $55.68

Good morning,

Corn prices remain in a fairly narrow range. Many traders are moving from the DEC18 to the MAR19 contract, where there’s about a dime carry or premium in the market. The MAR19 contract has essentially been trading between $3.70 and $3.90 per bushel since late-September. The nearby low was posted on September 18th at $3.54^6. The high was posted on May 24th at $4.37 per bushel. The contract hasn’t closed back above $4.00 since June 13th. The short term outlook is neutral.  Consecutive closes outside 356.25-372.75 would provide fresh targets.  Given a sell signal Friday, system types are risking 369. As for today, most are eager to see the latest USDA weekly crop report, where we expect to see close to 90% of the U.S. crop harvested. This should still be slightly behind our traditional pace, but not a big market mover. Keep in mind that Thanksgiving week has a tendency to rally as traders take an extended time off to be with family.

The U.S. Department of Agriculture terminated a $240,000 purchase contract with Chinese-owned Smithfield Foods that had been awarded under the Trump administration’s agricultural trade bailout program, a move taken at the company’s request, a department spokesman told Reuters on Friday. The move comes weeks after Republican Senator Chuck Grassley of Iowa, one of the country’s biggest farm states and the biggest hog-producing state, slammed Smithfield for receiving what he said was aid from the USDA that was meant to help American farmers hurt by China’s trade tariffs.

Soybean bulls continue to debate U.S. yield, weather in South America, and most importantly how things will play out with the Chinese regarding trade. Most are expecting to see the USDA report 92% to 93% of the U.S. crop has now been harvested. State we are keeping the closest eye on are Missouri, Kansas, Ohio, Illinois, Arkansas, Iowa, Indiana and Kentucky. The short term outlook is positive.  Upper level consolidation following the surge November 1st and 2nd should continue.  A close over 906.25 is bullish.  A close under 865.75 is needed to void the outlook.  Long, system types are risking 881.75.

Four new outbreaks of African swine fever have been reported in China’s provinces of Jiangxi, Yunnan and Sichuan as well as the municipality of Shanghai, the agriculture ministry said on Saturday. Ten pigs had died from the disease and 10 others had fallen ill on a farm with 150 hogs in the southeastern province of Jiangxi, the ministry said on its website. Another 348 pigs will be slaughtered in Yunnan province in the southwest. (Source: Reuters)

American pork exports to Mexico dropped 10% in September when compared with September of last year. Exports to China sank even more drastically — by 33% — during that month. Both countries saw similar declines for their quarterly numbers as well. These new numbers indicate that tariffs are starting to take a toll on two of the largest markets for U.S. pork producers. Remember, both countries targeted U.S. pork for retaliatory duties in response to President Trump’s tariffs. (Source: USDA)

Schwan’s Co., a Minnesota food company known for delivering ice cream and other foods, is being sold to South Korea’s largest food company, CJ CheilJedang. They will pay $1.8 billion for an 80% stake in Schwan’s and gain control the business. The Schwan family, descendants of found Marvin Schwan who started the company in Marshall in 1952, will continue to own 20% and run its home delivery service. (Source: StarTribune)

 

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