Morning Commentary

March corn up 4 ¾ at $3.7125

Jan beans up 16 ¾ at $9.115

The DOW is up

USD is weaker

Crude oil up $2.55 at $53.47

Good morning,

Trump and Xi have agreed to a 90 days truce in order to try and hammer out a deal.  The trade feels all this does is gives the Chinese the beans they need until Brazil’s crop is truly ready to refill the pipeline and then the US is not needed again for 8 months.  Stay tuned…

Corn is being pulled higher by soybeans and talk of vastly improved trade winds for. U.S. agriculture. The details are still extremely fuzzy, so we have to pay very close attention. We are keeping a close eye on the DEC19 contract, we are back above $4.00 per bushel. The highest price print we’ve seen in the past year for the DEC19 contract, goes all the way back to May 29th, when we traded $4.23^6. We haven’t been back above $4.10 per bushel since since early-August. Moral of the story, if you’ve missed the few previous opportunities that have presented themselves to reduce a portion of your estimated 2019 new-crop price risk, here’s another chance. Bears point to the fact weather conditions in Brazil and Argentina seem to be mostly cooperative to this point. Bulls understand and recognize there’s still a ton of “weather risk” in play moving forward. Bears are also pointing to more U.S. corn acres going in the ground in 2019.  The short term trend is neutral.  A close over 381.5 signals a test of 390.5.  A close under 374 voids the outlook.  Long, system types are long risking 377.5. 

Soybean bulls are jumping for joy as China agrees to buy large doses of U.S. agriculture. Though details and specifics are still cloudy, most inside the trade believe U.S. soybeans and pork will be the primary and immediate beneficiary. The funds are thought to be short around 65,000 contracts of soybeans, short about 80,000 bean oil contracts, and short around 8,000 meal contracts. Nobody is certain how much the Chinese government will buy. .  The short term trend is bullish.  Closing over 924.5 would suggest a run to the low to mid-940 area.  Setbacks that hold 906.75 should maintain up trending action.  A close under 882.25 voids the outlook.  Long, system types are risking 895.

After purchasing Monsanto earlier this year for $63 billion, Bayer has seen its stock price tumble. The consequence of which is causing them to shudder 12,000 jobs to handle the losses. (Source: Wall Street Journal)

Cover crops were grown on 4% of U.S. cropland in 2015, double the percentage in 2010 says the “Conservation Trends” report, which also says corn growers are rapidly adopting GPS guidance systems and variable-rate planters. (Source: USA)

Text of the farm bill compromise announced last week is being furiously written and lawmakers are scrambling to find time to schedule a vote in the House and Senate. With time running out on the lame duck, the target is for votes to be held this week. SNAP — which is the most contentious piece of the legislation — has been aligned with the Senate version, meaning the Houses’ bid to impose stricter work requirements on millions of food stamp recipients fell short. (Source: Politico)


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