Morning Commentary

May corn down 2 at $3.705

May beans up 2 at $9.04

The DOW is up

USD is stronger

Crude oil up $.52 at $56.74

Good morning,

Corn bulls have little to cheer about as of late. Exports have been good but there’s clearly more competition coming online as weather appears cooperative in South America. Both Argentina and Brazil look as if they will harvest significantly more corn than last year. There’s some question as to how much more corn they will both need domestically, so it will not all flow through to the export market like some bears have insinuated. Brazil’s new ethanol plants will surely chew into some of the additional production.  Ethanol continues to battle headwinds as weekly numbers show slightly lower production and another uptick in total surplus. The trade isn’t really looking for much from Friday’s scheduled release of the USDA’s month supply and demand report. Both domestic and global stocks should stay mostly unchanged. We still wouldn’t be surprised to see the corn market re-test the lows setback in mid-September before trying to mount a U.S. rally into the Spring or Summer. The short term trend is negative.  A close over 379.25 is friendly while consecutive closes under 370.25 opens the door to renewed selloffs.  There should be sell stops around 368 in the day session.  The options market is pricing in a 364.5-378 trading range going in to Friday’s WASDE report. 

Soybean bulls seem to have gotten a bit spooked yesterday after hearing that Kansas native, friend of our report, and chief U.S. agricultural negotiator, Greg Doud, may have made a couple of comments that came off as a bit uncertain about U.S. and Chinese negotiators making a solid deal in the next few weeks. .  The short term trend is negative.  An inability to recover over 909.75 opens the door for a drop to 896.5, 891.  Closing over 915.5 is the minimum needed to improve the outlook.  There were sell stops triggered around 902.25 Wednesday.  There should be buy stops around 919.25 in the day session.  The options market is pricing in a 895.25-918.25 trading range going in to Friday’s WASDE report. 

In the second half of the 2018-19 marketing year that ends on Aug. 31, corn shipments need to average about 5.6 million tonnes per month to meet the government’s current projection of 2.45 billion bushels. This would be the second-highest pace on record for the time frame behind last year’s blistering 7 million. Soybean exports need to average a record 3.9 million tonnes per month between March and August to hit the full-year forecast of 1.875 billion bushels. The previous record pace for the period was set last year at 3.07 million. (Source: Reuters)

USDA To Train More Beagles To Sniff Out Hog Virus: The disease, African swine fever, can kill hogs in just two days. The virus, which does not harm people, has spread to China’s neighbor, Vietnam. Eastern Europe has also suffered an outbreak and Belgium has found the virus in wild boar. To prevent the disease form entering the U.S. the USDA said it will work with Customs and Border Patrol agents to add 60 beagle teams at key U.S. commercial ports for a total of 179 teams. This will help officials sniff out illegal pork products and help contain the still-spreading hog disease.


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