Morning Commentary

July corn down 5 ¼ at $3.59

July beans down 8 at $8.1925

The DOW is down

USD is stronger

Crude oil down $.47 at $61.65

Good morning,

Corn prices are giving back yesterday’s gains as Chinese trade continues be the most nearby wild-card in play. Obviously, if a deal is inked with the Chinese, corn prices are more than likely pulled higher. No trade deal and prices are likely pressured lower nearby, despite ongoing U.S. weather uncertainties. Literally, Chinese trade is currently trumping U.S. weather. Also giving the bears an edge is are thoughts that South American producers are going to harvest +30 MMTs more corn this year compared to last. Regardless, that’s roughly an extra +1.0 billion bushels being put into play. Perhaps more corn than usual stays home to roost in Brazil, especially with the corn based ethanol plants up and running, but this is still a substantial jump in production. There’s also talk that U.S. feed and residual could be lowered based on previous quarterly stock data. The trade count had the fund selling 9,500 corn.  They’re now thought to be short 315,000 lots.  Technically, the trend is negative.  A failure to hold 343.5 implies a probe below the 2018 low at 329.75.  Stable action over 366-9.5 is needed to provide fresh upside targets. 

Soybean  bulls are holding their breath as U.S. and Chinese trade negotiators head into the final turn. The USDA report is scheduled for release tomorrow and would generally take center stage, but the crescendo about to happen in Chinese trade is drawing much more attention form market participants. On the demand front, with China booking another 5-6 cargos overnight, they are thought to have taken close to 20 boats from South America this week.  The firming of South American basis has PNW beans, delivered China, on par with Brazil. The trade count had the fund selling 5,500 beans.  They’re now thought to be short 189,500 lots.  Technically the trend is negative.  Sustained action below 800 signals a drop to 766.25.  Stable action over 853 is the minimum needed to provide upside targets. 

A new study shows access to international export markets for U.S. grains supported nearly $38 billion in business sales in the U.S. economy during 2016 beyond the value of the products themselves. The analysis commissioned by the U.S. Grains Council and the National Corn Growers Association (NCGA) found a total economic impact of U.S. grains exports of $55 billion that year, supporting 271,000 jobs directly or indirectly. These sales supported U.S. gross domestic product (GDP) by $19 billion over what would have occurred without such exports. As you can see, strong trade benefits farmers, rural communities and the national as a whole. You can view the study results and an interactive map HERE. (Source: USGC, NCGA)


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