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Morning Commentary

May corn up ¼ at $3.585

May beans up ½ at $8.795

The DOW is up

USD is stronger

Crude oil up $.24 at $64

Good morning,

Corn continues to trade near contract lows as the U.S. weather forecast shows a few windows of opportunity for future corn planting. At the same time most bears continue to shoot holes in demand growth stories, expecting another downward revision to feed and residual, as well as another slightly reduction to exports by the USDA in the coming months. Ethanol production has actually picked up a bit as of late so I’m hesitant to say the USDA will be making another cut anytime soon. Technically, it feels like the MAY19 corn contract has more significant support in the $3.50 to $3.55 range. The current low in the MAY19 contract was posted at $3.55^2 per bushel. The JUL19 contract is looking at more significant support in the $3.50 to $3.65 range. The current low in the JUL19 contract was posted at $3.64 per bushel. The new-crop DEC19 contract is looking at more significant support in the $3.75 to $3.85 range. The current low in the DEC19 contract was posted at $3.83^2 per bushel.

Soybean bulls would desperately like to stop the bleeding. Prices have now deteriorated to their lowest level since late-October. The biggest headwind seems to be the continued uncertainty surrounding Chinese trade. From what I understand, the U.S. and China have tentatively scheduled another round of negotiations for the last week of April, and Chinese leaders will be coming to Washington the first week of May. If things go well there could be a ceremonial meeting between President Trump and Xi in late-May or perhaps early-June. Bulls were obviously hoping an agreement could be reached much sooner, as U.S. exporters will be facing much stiffer headwinds moving forward. Technically, it feels like the MAY19 contract could find more significant support in the $8.50 to $8.75 range.

Soybean exports totaled 460,700 metric tons last week, with 130,200 metric tons headed to China. This is the lowest weekly U.S. soybean export levels since before the trade war began. (Source: Bloomberg)

The Centers for Disease Control and Prevention announced that 109 people had been sickened and 17 hospitalized in six states due to an E. coli outbreak form ground beef. At this time, no common supplier, distributor, or brand has been identified, and those who have fallen ill reported consuming ground beef both at restaurants and at home. The CDC has not advised the public to stop eating ground beef, nor have any recalls been ordered. (Source: CDC)

Minnesota To Regulate Nitrogen Fertilizer: The state AG Department is expected to approve in May a regulation that would regulate use of nitrogen fertilizer in areas with vulnerable groundwater beginning in 2020.

 

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