News

Morning Commentary

July corn UP 7 ½ at $3.76

July beans UP 9 ¼ at $8.4075

The DOW is up

USD is stronger

Crude oil down $.70 at $61.08

Good morning,

Corn prices post big gains again on more doubts regarding U.S. planting and are 33 cents off the lows. Traders are seeing more problems and complications associated with excessive moisture. Conditions are cold and wet, the crop is certainly going to be in desperate need of nitrogen, slow early growth, producers will have to throw more money at top-dressing, fertilizer is arguable out of position and could be limited in areas creating higher prices and limited supply, wet conditions mean more insect problems, perhaps more fungicide, pollination will be pulled deeper in the heat of summer, preventive-plant acres are a much more realistic option after producers start thinking about all of the additional input costs in trying to chase yield in an excessively late and overly wet environment… Bottom-line, the bulls are starting to make a much more compelling argument for additional risk-premium. The trade count had the fund buying 45,000 corn.  They’re now thought to be short 292,000 lots.  The short term trend has shifted positive for July corn.  Stable action over 366 on a closing basis should propel rallies to 380.  A close over 380 confirms a bottom.  July corn has a gap below the market at 357.25.  Closing under 353.5 signals renewed weakness.

Soybean prices have rallied +40 cents off the low the past couple of days as traders talk about improved demand and increasing uncertainties regarding U.S. production. There’s also more headlines circulating that trade talks have eased to some degree and tensions with the Chinese aren’t as bad as many bears had recently projected. There continues to be ongoing debates about overall Chinese imports. Interestingly, most estimates seem to be fewer Chinese soy imports than the USDA is currently estimating. The trade count had the fund buying 22,000 beans.  They’re now thought to be short 172,500 lots.  The short term trend for July beans is neutral-positive.  Stable action over 857 in July signals a short term rally towards 900.  Closing under 809 signals renewed weakness.  July beans closed an overhead gap on the daily chart at 840.5.

President reiterated his intent to spend $15 billion to boost farmers affected by the trade war, but many are wondering exactly how the aid will get to farmers. Last Friday, President Trump raised the prospect of buying up U.S. farm goods and seeing them to needy countries, but many industry expert that another direct payment program is most likely. Direct income-boosting programs like the trade aid payments from last year are more practical than trying to support commodity prices or manage supply.

IEG Vantage Sees Reduction in Corn Acres: Updated forecasts by IEG Vantage show farmers planting less corn than the USDA predicted to this point. IEG Vantage is expecting only 90.692 acres of corn to be planted this spring, and though that is up 1.563 million acres from 2019, it is still below the USDA’s March forecast for corn plantings, which were set at 92.8 million acres. From what I understand, the firm expects soybean plantings will slide to 86.437 million acres in 2019, which would be a 2.759-million-acre drop from year-ago.

Farm Bureau & Farmers Union Back Bankruptcy Bill: The two largest U.S. farm groups co-signed a letter to Congress in support of a bill that would raise to $10 million the volume of farm debt that can be reorganized or written down in a Chapter 12 bankruptcy; the limit now is $4.1 million.

China announced it will slap higher tariffs from 5% to 25% on $60 billion in U.S. goods starting June 1 in retaliation. U.S. goods that will be hit with 25% duties, up from 10% include sweet almonds; frozen fruits and nuts; and dried, smoked or salted beef. Frozen potatoes, shelled peanuts, chicken breast, grounded tomatoes and peanut butter are among the goods that will face duties of 10% up from 5%.

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