Morning Commentary

May corn up ¼ at $3.71

May beans up 5 ¾ at $9.16

The DOW is up

USD is stronger

Crude oil down $.20 at $57.02

Good morning,

Corn bulls are pointing to stronger than expected export sales and continued buying interest from South Korea and Mexico. Unfortunately, there were still no headlines of Chinese buying, so the market continues to battle depression. Deliveries against the MAR19 contract were a bit stronger than most inside the trade had anticipated, which also could have added a little nearby pressure. Old-crop prices continue to trade at levels not seen since last September. New-crop prices have been pulled down to levels not seen since last November. Funds continue to extend their net-short position, with several sources thinking they have sold more than -75,000 contracts this week alone. . The short term trend is negative.  While the market is vulnerable to a drop to 367.75, be on guard for a short term recover attempt from minor channel support at 370.  A close over 378 is the minimum needed to improve.  There are buy stops around 381 in the day session.

Soybean bulls are trying to battle back this morning. Without a trade deal in place and specific details regarding the worlds #1 buyer of U.S. soybeans (China) the market seems somewhat depressed. We’ve also seen the weather stabilize in South America and Brazil harvesting their crop at a record setting pace. Meaning more stiff competition coming online sooner than some had anticipated. The good news is South American supplies have been dramatically depleted so there’s not much room for logistical errors or geopolitical problems. Unfortunately, with U.S. ending stocks near record levels the bulls seem apprehensive that additional premium needs to be added and the bears seem more than comfortable that global demand will be supplied.  The short term trend is neutral-slightly negative.  While the market is vulnerable to a drop to the recent swing low at 907, be on guard for a short term bounce from trend line support around 910.  Closing over 925 is the minimum needed to improve the outlook.  There are buy stops around 928.75 in the day session. 

The amount of debt held by America’s farmers has risen rapidly to 1980s-levels at $409 billion from $385 billion last year, with loan demand remaining historically high according to U.S. Ag Secretary Perdue. Farm debt has increased by 30% since 2013 — up from $315 billion to $409 billion according to USDA data. And up $385 billion in just the last year to levels seen in the 1980s. While the data is bleak, there is a bright spot in that land values have stayed fairly level and lower interest rates have kept borrowing relatively affordable. (Source: Reuters)


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