Morning Commentary

Dec corn up ¼ at $3.5625

Jan beans up 3 ½ at $8.6575

The DOW is down

USD is stronger

Crude oil down $.12 at $51.51

Good morning,

Corn bulls are happy to see crude oil prices stabilize and more talk of U.S. corn being left in the fields. There’s also more talk of cotton being planted in Brazil. We talked about this weeks ago, but we are finally see confirmation. Bulls want to argue that the increase in cotton acres will ultimately mean fewer corn acres. The short term outlook is negative.  Another close below 368.25 would prompt a drop to 361 perhaps 357.5.  Closing over 379 warns of an end to the pullback.  Short, system types are risking 372. 

Soybean bulls continue to backpedal as more threats and fears circulate ahead of the meeting between President Trump and Chinese President Xi. Most all inside the trade are still unclear as to exactly what is going to be negotiated or if anything will be negotiated when the two top world leaders meet this week in Argentina. President Trump has again reiterated, if nothing comes from the meeting, he is prepared to move forward with full tariffs on all Chinese imports.  The short term trend is negative.  Another close below 865.75 would provide a target of 837.75.  Rallies that fade against 872.25 fuels bear trade.  A close over 882 is needed to void the outlook.  Given a sell signal Monday, short system types are risking 872.25. 

House Republicans have proposed a renewal of the expired $1/gallon biodiesel blenders credit but would gradually phase out the subsidy after 2021. The plan would be to lower the tax to 75 cents in 2022, 50 cents in 2023, and 33 cents in 2024. The credit would be eliminated after 2024.

General Motors said Monday it plans to effectively halt production at a number of plants in the U.S. and Canada next year and cut more than 14,000 jobs in a massive restructuring that will cost up to $3.8 billion. In response, the United Auto Workers vowed to use “every legal, contractual and collective bargaining avenue” to fight the changes. U.S. President Donald Trump and Canadian Prime Minister Justin Trudeau also criticized the automaker’s decision. “I am not happy,” Trump told reporters on the White House lawn Monday afternoon, speaking of CEO Mary Barra. “You know, the United States saved General Motors. For her to take that company out of Ohio is not good. I think she is going to put something back in soon.” Trudeau took to Twitter earlier in the day to express support for the workers at the Oshawa Car Assembly Plant, in Ontario. “Yesterday, I spoke with @ GM’s Mary Barra to express my deep disappointment in the closure,” he said. She met with National Economic Director Larry Kudlow at the White House hours after making the announcement.

The number of farm bankruptcies in Minnesota has doubled over the last four years, with commodity prices down and more farmers falling behind on loan payments. Minnesota, Montana, Wisconsin and the Dakotas have seen 84 farms file for bankruptcy over a one-year period ending in June according to analysis from the Minneapolis Fed, more than double the number from the same period in 2013-2014. (Source: Star Tribune)

As we know, agriculture is the top industry in many states across the U.S. And cattle production is one of the main economic drivers in these Ag states, yielding more than $50 billion in cash receipts per year in this decade according to federal data. According to the latest figures available, there are about 913,250 farms with cattle and nearly 90 million head of cattle in the country. Compare that to almost 314 million people, and that’s approximately 1 cow, bull or calf for every 3.5 people. But in some states, the ratios are reversed as cattle outnumber humans by 4-to-1 in one case. Cattle outnumber people in nine states including: Oklahoma, Iowa, Idaho, Kansas, Wyoming, North Dakota, Montana, Nebraska, South Dakota. (Source: US News)


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