Morning Commentary

May corn up 2 at $3.54

May beans up 1 at $8.485

The DOW is up

USD is weaker

Crude oil up $.1.22 at $64.72

Good morning,

Corn  traders continue to debate a large number of headlines. Bulls are obviously talking about ongoing weather concerns here in the U.S. and the significant delays in planted acreage. Bears are pointing to a much larger crop being harvested in South America, a glut of U.S. supply and massively recharged U.S. soil moisture. The USDA data released yesterday showed 15% of our entire U.S. corn crop is planted compared to the more traditional pace of 27% planted by this date. I continue hear worry and concern from producers out east, particularly in parts of Indiana and Ohio. Indiana is thought to be just 2% planted vs. their more  traditional pace of 27% planted by this date. Ohio is also just 2% planted vs. their more historical pace of 13% by this date. To the north, producers in the Dakota’s continue to see complications as temperatures remain well below normal and moisture in great excess. North Dakota is thought to be 1% planted vs. it more traditional pace of 7% planted by this date. South Dakota is showing 0% planted vs. it’s more traditional pace of 11% by this date. We are hearing of some replant acres in parts of Nebraska, but for the most part producers in the state are clearing the hurdles. Nebraska is thought to be 16% planted vs. a more historical pace of 23% planted by this date. Iowa and Illinois seem to be highly debatable with some areas moving right along while other areas facing much more dire conditions. Iowa is actually 21% planted vs. its historical pace of 26%.

Soybean bears pushed the front-end of the market down to new contract lows yesterday on a combination of thoughts ranging from more soybean acres here in the U.S., the Argentine crop harvest advancing to almost 50% complete, ongoing trade negotiations and uncertainty with the Chinese, and more negative headlines circulating about African Swine Fever. Recent research reports circulating inside the trade estimate Chinese pork production will be reduced by over -20% during the next 12-to-18 months. There’s actually some analyst who believe Chinese pig feeding has dropped by -40%.

U.S. Treasury Secretary Steven Mnuchin says talks with China are in the final stages and that while both countries are nearing a deal, negotiations are at a point where either an agreement could happen or possibly not. From what I am hearing, Mnuchin did not want to say if the talks would conclude by the end of June, but only that both economic powerhouses desire to have an agreement. He also declined to say if a collapse in negotiations would cause Trump to inflict more tariffs on China, the Times said in the report.

USDA announced yesterday that producers have until May 17 to certify their 2018 production under the $9 billion direct payment program for commodity sectors struggling due to retaliatory tariffs. Perdue reveled the change during a meeting with North Dakota farm groups and lawmakers on Saturday. It could help an estimated 5% of North Dakota growers who still have unharvested crops from last year because of snow. The previous decline for reporting product was May 1. (Source: USDA)

Purchases of farm equipment plunged by an annualized $900 million in the first quarter, the sharpest drop in three years, as U.S. producers struggle with falling commodity prices. The Commerce Department cited the drop in agricultural machinery purchases as a contributor to the paltry 0.2% quarterly rise in overall business spending on equipment, also the weakest performance since 2016. The reluctance of farmers and other business owners to invest in equipment flashed a cautionary signal for the U.S. economy and for machinery manufacturers. (Source: Bloomberg)

Bayer AG’s CEO Werner Baumann lost a crucial confidence vote as investors questioned his handling of the $63 billion Monsanto deal and the wave of U.S. lawsuits that have followed. 55% of shareholders voted against absolving Baumann and other managers of responsibility for their actions in the takeover last year and whether they assessed the legal risk of Roundup, the embattled weedkiller it acquired together with Monsanto. Now, the result isn’t legally binding, but it shows clearly what the shareholders are feeling about the company’s leadership. (Source: Bloomberg)


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