Morning Commentary

March corn up 1 at $3.85

Jan beans up 4 at $9.1375

The DOW is up

USD is weaker

Crude oil up $.74 at $51.7

Good morning,

Stocks are higher this morning as rumors circulate that U.S. and Chinese officials, in a phone call between Vice Premier Liu He, U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer, have agreed to push forward the timetable and roadmap for the next stage of economic and trade consultation work

Corn continues to trade in a narrow range ahead of headline uncertainty surrounding both the USDA and Chinese trade talks. Bulls are hoping the Chinese rumors are correct and that they are going to soon step in as healthy buyers of U.S. corn and ethanol. Bears are quick to point out if nothing develops or comes from the recent rounds of talks with the Chinese, the USDA may have no choice but to start backpedaling a bit in regard to their export and ethanol demand estimates. We also have to keep in mind, the USDA will probably be lowering their total U.S. production estimate. The short term trend is slightly positive.  Setbacks that hold 378 keeps the market poised to test 390.5.  A close under 374 provides fresh downside targets.  Long, system types are risking 378.

Soybean traders continue to debate Chinese trade headlines. Today’s talk that U.S. and Chinese officials are trying to speed up negotiations is being debated against yesterday’s move by the Chinese courts to block the sale of Apple phones. Regardless of the headlines, I continue to hear rumors that the Chinese are planning to buy +5 MMTs to +8 MMTs of U.S. soybeans to replenish state reserves. There seems to be a lot of uncertainty about when the purchases will be made and if the Chinese are going to take steps towards dropping the current 25% tariff. The short term trend is bullish.  Closing over 924.5 would suggest a run to the low to mid-940 area.  Setbacks that hold 906.25-896.5 should maintain up trending action.  A close under 882.25 voids the outlook.  Long, system types are risking 895.

China to More Than Triple Ethanol Production Capacity: With demand for the commodity expected to surge as the country shifts toward cleaner fuels, China is set to triple output capacity by 2020. The nation is currently building or seeking approval for new ethanol plants with capacity to produce 6.6 million tons of the biofuel a year.

Bob Bergland, who was Agriculture secretary under President Jimmy Carter, died Sunday at age 90. As ag secretary, Bergland had the difficult job of defending to Midwest farmers Carter’s unpopular 1980 decision to embargo grain sales to the Soviet Union after the invasion of Afghanistan in 1979. Bergland, a northern Minnesota farmer, died at a nursing home in his hometown of Roseau, near the U.S. – Canadian border. (Source: AP)

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