News

Morning Commentary

March corn up ½ at $3.8525

Jan beans up 3 3/4 at $9.0425

The DOW is down

USD is weaker

Crude oil up $.16 at $51.36

Good morning,

Corn bulls continue to hold out hope of large Chinese purchases in the days and weeks ahead. There’s talk that the downside could be fairly limited as bears remain apprehensive ahead of the potential Chinese headlines. It’s not that the fundamentals are wildly bullish at the moment, it’s just the fact bears might not want to post new wagers ahed of uncertainty involving the Chinese. Despite more talk and rumors of the Chinese buying Ukraine corn, they still have the firepower and means to buy large doses of U.S. supply. Hence, bears might feel it’s best to pause for a moment. For what it’s worth, the 200-Day Moving Average is just below $4.05 per bushel. In fact, the DEC19 contract is now more than +20 cents higher than the DEC18 contract was trading at this point last year. Those who are looking to reduce a portion of their longer-term risk need to be paying close attention. The highest close we’ve seen as of late in the DEC19 contract occurred back on October 15th at $4.08 per bushel. Prior to that, the highest close occurred on August 6th at $4.11^6. The highest close in the past year occurred on May 25th at $4.22^6 per bushel. The contracts all-time high is just $4.24 per bushel.

Soybean bears argue that weak economic data out of China adds to further uncertainty. The U.S. dollar has recently posted an 18-month high. On the flip side, China’s recently released industrial production numbers are now near a fresh 3-year low, while the Chinese November retail sales data showed a 15 year low. Moral of the story, growth inside China is clearly being questioned. There’s also more talk circulating that the Chinese are simply hedging a portion of their bets on South America supply, by purchasing small quantities of U.S. beans and keeping the U.S. door open… just in case.

U.S. farm, automaker and food and beverage groups pressed the Trump administration on Friday to ensure that any new trade talks with the European Union lead to an increase in their access to EU markets with less red tape. The farm and food groups on Friday also urged U.S. officials to address tariff barriers and other regulatory and labeling issues that hinder U.S. access to the lucrative European market. (Source: Reuters)

China confirmed two new cases of African swine fever, as the disease continues to spread through the world’s largest hog herd, the Ministry of Agriculture and Rural Affairs said late on Sunday in a statement on its website. One outbreak occurred on a farm of 210 pigs in Yanting county in the southwestern province of Sichuan, killing 26. Another case was confirmed in a district of the city of Jixi in the northeastern province of Heilongjiang where 24 pigs died on a farm of 84 pigs. (Source: Reuters)

Ag Secretary Sonny Perdue announced that the USDA is offering up to $600 million in loans and grants to help build broadband infrastructure in rural America. They are calling it the ReConnect Program and they are hoping that it can answer the Adminstration’s call to action for rural prosperity. Funding for the program has been appropriated in the fiscal year 2018 budget for this broadband pilot program. (Source: USDA)

 

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