July corn unchanged at $3.685
July beans down 2 ½ at $8.4925
The DOW is up
USD is weaker
Crude oil down $1.15 at $62.45
Corn bulls are pointing to more wet and cool conditions in the forecast which will further delay U.S. planting, starting to hear more talk of perhaps 3 to 5 million acres going to “preventive plant”. Bears might also be backpedaling a bit on more rumors that a trade deal with China could be finalized by next Friday, May 10th. The USDA reported corn used for ethanol in March at 441.7 million bushels vs. last year’s March ethanol usage of 472.9 million bushels. In other words, we used 31 million fewer corn bushels in March this year compared to last. If you look back on the past seven months of the marketing year, we’ve used about -150 million fewer bushels of corn for ethanol.
Soybean bulls are pointing to rumors that we are getting closer to finalizing a deal with the Chinese. Lets hope those rumors are correct and bring a wave of nearby purchases. We could certainly use a bump in exports. Bears are thinking the USDA might also have their domestic crush estimate slightly overstated. Yesterday’s data showed the total U.S. crush in March at 179.4 million bushels vs. 182.2 million bushels last March. This allows the bears to argue that the USDA’s current domestic crush estimate is a bit too optimistic and will eventually need to be trimmed by -5 to -15 million bushels.
The EPA is calling for “management measures” to reduce glyphosate drift, along with a new requirement that discloses the risk of herbicide resistance. The label recommendations include warning farmers against spraying when winds exceed 15 mph or during temperature inversions. The agency did acknowledge that the weedkiller poses “potential risk” to mammals and birds, but only where the herbicide is sprayed. EPA also cited risks to plants int he ground and in water if the chemical drifts, but it said the benefits of glyphosate outweigh ecological risks when it’s properly applied. (Source: EPA)
China’s swine fever is partly to blame, as McDonald’s warned investors its commodity prices could rise as much as 3 percent this year. While China’s KFC operator Yum China Holdings said spiking poultry costs will weigh down margins for the rest of the year. At Texas Roadhouse Inc., a chain specializing in steaks, higher prices are on the menu, with customers paying as much as 3 percent more as it tries to offset rising costs. (Source: Bloomberg)
It was recently reported that the EPA will likely be considering the 39 pending petitions for 2018 small refinery exemptions very soon. The EPA approved 53 small refinery waivers from 2016 and 2017, and these waivers have a direct impact on rural America and corn farmers. With an already tough economic environment, more waivers will continue to chip away at farmers’ bottom line by destroying demand for corn. While the EPA is at least moving toward greater transparency, proposing to lift the veil of secrecy around these handouts and perhaps name all the companies that win special treatment, according to the National Corn Growers Association.