Morning Commentary

March corn up 2 ¼ at $3.785

March beans up 5 ¼ at $9.12

The DOW is down

USD is weaker

Crude oil down $.67 at $51.92

Good morning,

Corn price are slightly higher this morning, but have pulled back about -10 cents from mid-week highs. Bears argue weakening demand and talk that perhaps the USDA will need to trim export, ethanol and feed usage estimates in the days or weeks ahead. Without Chinese buying headlines the market is left to focus on the facts. Ethanol production has clearly weakened in comparison to what’s needed to to meet the USDA’s estimate. Feed usage and exports are also in question. Obviously if the Chinese were to step in as buyers of corn, ethanol and DDGs the entire dynamics could quickly change. Unfortunately, we still haven’t seen that as of yet and the bulls have started to backpedal a bit, fearing the trade talks may continue to drag out.

Soybean prices are higher this morning, but it feels like bulls have backpedaled lately on lack of Chinese specifics regarding trade and talk of President Trump canceling his trip to Davos, where many thought he would meet with Chinese leaders to discuss a possible trade resolution. There’s also talk that bulls weren’t too excited about the updated CONAB Brazilian production numbers. Lots of bulls were looking for a more aggressive cut to Brazil’s production. Basically they cut from 120.06 down to 118.8 MMTs, while many in the trade have been hearing numbers sub-115.0.

President Trump is schedule to speak, for the second year in a row, to the largest U.S. farm group, the American Farm Bureau Federation, on Monday at its centennial convention in New Orleans.

On the same day that President Trump nominated Andrew Wheeler to be EPA administrator, the agency said it would withdraw a proposal to set a minimum age of 16 for farmworkers to handle, mix, or apply pesticides, down from the age 18 limit specified in a 2015 regulation.

David Montgomery, professor of geology at the University of Washington and author of several books including his most recent, Growing a Revolution, believes soil health is the next agricultural revolution and has traveled the world to prove it. In the research for his book, Montgomery visited farms that are building soil and soil organic matter. The practices these farms had in common were no plowing or no-till, keeping the ground covered year round using cover crops, and growing diverse crop rotations to reduce weeds and insects, or what he calls “conservation agriculture.” Sharing some of his visits he tells of David Brandt, a farmer in Carroll, Ohio has practiced no-till farming for 44 years. His farming costs are $320 per acre while his corn yields 180 bushels per acre. He also uses only 1 quart of Roundup herbicide per acre. By contrast, Brandt’s neighbor plows his fields, pays expenses of $500 per acre, and uses five times as much Roundup. His corn produces yields of only 100 bushels per acre. According to Montgomery, the need to build soil goes beyond the debate over conventional and organic farming methods, “It centers on a different perspective on how soil health works in both systems, and it’s about how to build soil and look at soil as an ecological system.” Bottom line… Montgomery sees soil health with its focus on building soil biology as the new agricultural revolution supplanting the green revolution and its focus on chemicals and biotechnology.


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