Morning Commentary

May corn unchanged at $3.7325

May beans down 1 ½ at $9.0775

The DOW is down

USD is weaker

Crude oil up $.11 at $58.63

Good morning,

Corn  bulls are keeping an eye on extreme U.S. weather conditions that have included late-winter blizzards and early-spring flooding. The updated 6-10 day forecast is calling for above normal temps and average to below normal precipitation for a large chunk of the major corn producing states. Interestingly, the longer-term forecast again brings in talk of above normal precipitation, which could further complicate planting for many producers in key growing areas.

The EPA has retroactively granted five additional “hardship” waivers to exempt small refineries form having to comply with the ethanol mandate for 2017 sales. This raises the total for2017 to 34 waivers and has sparked protests from the ethanol industry.

Soybean prices actually gained +10 cents last week despite disappointing trade headlines. Perhaps that’s a good sign for the bulls in this market.  We had a bit of disappointing data released on Friday when the NOPA crush numbers came in less than expected, just shy of 154.5 million bushels. Keep in mind, despite the slowdown, it was still the strongest February for crush on record. Soybean oil stocks at the end of February swelled to a seven-month high of 1.752 billion pounds, compared with 1.549 billion pounds at the end of January. Soymeal exports last month totaled 784,660 tons, down from 905,923 tons in January but above the 755,103 tons exported in February 2018. Another headline that could be digested either way is the recent extreme weather here in the U.S. At first glance, wide-spread flooding in many locations and extreme snowfall to the north should be digested as bullish, but ultimately it could mean more soybean acres and perhaps more production?

According to a Government Accountability Office report released last week, the USDA may not have a sufficient supply of the foot-and-mouth disease vaccine to control more than a small outbreak in livestock. The current supply would only protect about 14% of Texas cattle or 4% of Iowa swine. The 2018 Farm Bill, directs USDA to increase supplies of the vaccine. (Source: GAO)


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