Morning Commentary

May corn down 2 at $3.565

May beans down 3 ¼ at $8.7725

The DOW is down

USD is weaker

Crude oil up $1.39 at $65.39

Good morning,

Corn bulls continue to struggle as funds hold near record short-portion. The JUL19 contract is down over -13% in the past 52-weeks, down -6% year-to-date, and down just over -3.5% in the past month. The new-crop DEC19 prices are down about -6% in the past 52-weeks and down close to -3% year-to-date. Fundamentally, there’s not a lot of fresh or new in the headlines. Bears continue to talk about weaker demand growth. There’s still talk circulating that the USDA will need to further trim their feed and residual estimate. Exports will continue to be challenged as production estimates in South America creep higher. Keep in mind, SAM corn delivered into Asia is currently -25 cents to -75 cents cheaper than U.S. exported corn.

Soybean prices have been under pressure as of late, but as a whole seem comfortable oscillating in a range between $9.00 and $9.60 for new-crop (NOV19). Overall NOV19 soybean prices are down just over -2% year-to-date and about -9% in the past 52-weeks. Old-crop JUL19 prices have faced a bit more pressure and are down about -14% in the past 52-weeks. The negative headwinds are fairly obvious, no official trade resolution with the worlds #1 buyer of soybeans, and good production being harvested in South America. There’s also the fears and uncertainty surrounding “African Swine Fever” and particularly what it means moving forward? Most inside the trade believe China has lost somewhere between -150 and -200 million pigs.

The South China Morning Post reported that chinese pork prices could rise 70% this year and reach record-high levels in the second half of 2019.


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