Morning Commentary

May corn down ½ at $3.6125

May beans down 3 ½ at $8.985

The DOW is up

USD is stronger

Crude oil down $.80 at $63.81

Good morning,

Corn bulls are hoping another round of extreme weather in key U.S. growing regions will help shake some of the bears. The fear is that bears are looking a bit further out in the forecast and see larger windows of planting opportunity. Remember, with all of the new technology, most estimate that the U.S. producer can plant between 30% to 40% of our nations entire corn crop in just one-weeks time. I also continue to hear bears talking about another round of demand cuts by the USDA. Several insiders are saying Feed and Residual demand will need another reduction, while exports and ethanol might also need another small haircut? Ethanol data released yesterday, actually showed another slight improvement in weekly output, pushing back north of +1.0 million barrels per day and stock were trimmed by almost -800,000 barrels.

Soybean bulls continue to point towards comments from Treasury Secretary Steve Mnuchin, who said China was committed to “significant” orders for U.S. soybeans. USDA Secretary Sonny Perdue also made positive comments this week. Demand seems to be mostly steady with the USDA most recently leaving crush and exports unchanged. I suspect we will see another round of strong weekly export sales data this morning as China continues to take small nibbles.

Sources say China may be considering an end to its investigation of alleged dumping of U.S.-produced DDGs. Reuters cited a document that a Chinese industry group sent to member companies. It was not clear whether the review would lead to any tariff relief for producers of the ethanol byproduct, commonly used in livestock feed. (Source: Reuters)

Starting with the May issue, changes will be made to the WASDE report including: price range forecasts will be eliminated in favor of single price points for all crops and livestock; The international Supply and Use tables for Crops will include an aggregate value for “World less China” representing the balance sheet values outside of China; The ordering of countries and lists of Major Importers/Exporters will be updated to eliminate outdated aggregations (such as Former Soviet Union) and better reflect current trade patterns.


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