Morning Commentary

March corn down 1 ½ at $3.7725

March beans down 5 ¾ at $9.1075

The DOW is up

USD is stronger

Crude oil up $.15 at $54.05

Good morning,

Corn  traders have very little fresh or new to digest. The market remains in a very tight and narrow pattern. Bears are pointing to Ukraine exports being on a strong pace and in a few weeks Argentine supply will start adding more to global competition. As of right now, several sources in Argentina are saying analyst are starting to adjust their production estimates a bit higher. A big chunk of the crop is thought to be doing very well. Keep in mind, still less than 50% of the Argentine crop has pollinated. In Brazil, first-crop corn will be about 20% harvested this week, while second-crop corn should get to about 45% planted. Bulls are pointing to the fact a couple of Chinese groups are penciling in much higher than expected corn, sorghum and DDG imports. Trend funds are thought to be long 7,000 contracts on a futures and options basis.  The short term trend is neutral-slightly negative.  The market is vulnerable to a drop to 368.25.  Closing over 378.75 would undermine the outlook.  Short, system types will find buy stops around 381.75.  Options are implying a 373.75-382 trading range the balance of this week. 

Soybean  traders are waiting patiently on additional details about Chinese trade. It sounds like top-level trade officials for both the U.S. and China are meeting these last two days of the week. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin met last night with China’s top economic czar Liu He and central bank governor Yi Gang as the two sides try to build on the recent progress made in Washington last month. South American weather seems to be somewhat of a non-event right now. The Brazilian harvest should get to about 30% complete by week end. I heard China has been in the South American export market buying both Argentine and Brazil new-crop soybeans. Trend funds are thought to be short 35,500 contracts on a futures and options basis.  The short term trend is neutral.  Consecutive closes outside 906.5-920.5 is needed to provide fresh trending targets.  Short, system types will find buy stops around 920.5.   Options are implying an 903.5-923 trading range the balance of this week. 

USDA has asked the Environmental Protection Agency (EPA) not to enforce the E15 ban this summer against fuel retailers selling E15 gasoline if the rulemaking to allow its year-round use is delayed, says USDA Deputy Secretary Steve Censky. Some are hoping this plan “b” isn’t needed, as the first priority and the preference of everybody, including the EPA, would be to get the rule done. It appears it will be tough to have the rule in place by the summer driving season, considering the lengthy government shutdown.


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