Morning Commentary

July corn up 4 ¾ at $3.8375

July beans down 3 ¾ at $8.36

The DOW is down

USD is stronger

Crude oil up $.29 at $63.16

Good morning,

Corn bulls continue to point to increasing weather related risk in the U.S. crop. Most forecasters are calling for continued rains into the end of May, some are even saying areas could be overly wet for several more weeks. Sunday nights open could be very interesting based on weather over the weekend. If the storms and rains hit, like the weather models are suggesting, we could see another leg higher as additional risk-premium is added and more bears are forced to the sideline. The USDA will release their weekly updated crop-progress report on Monday and there’s already a wave of debates circulating around the acreage estimate. The high this past year in the JUL19 contract was posted at $4.45 on May 24th. The new-crop DEC19 contract posted its most recent high at $4.23^6 back on May 25th. This DEC19 contract hasn’t closed above $4.08 since early-August. The trade count had the fund buying 30,000 corn.  Over the past three sessions funds were estimated to have bought 93,000 contracts!  They’re now thought to be short 244,000 lots.  Based on the trade count, the fund is expected to be shown short 292,000 corn in tonight’s COT report.  The short term trend is positive for July corn.  Stable trade over 380 confirms a bottom and points to a return to the 400 area.  Closing under 357.25 signals renewed weakness.

Soybean prices are lower this morning on more uncertainty surrounding Chinese trade, but still the market is up almost +50 cents from the low posted back on Monday. Producers who are still holding old-crop bushels should be paying very close attention. The short term trend for July beans is neutral-positive.  Stable action over 847 points to a rally towards 882.  Closing under 812.75 signals renewed weakness. 

British livestock genetics firm Genus agreed to license its know-how on virus-resistant pigs to Beijing Capital Agribusiness Co. Ltd. which will seek regulatory approval for the pigs in the world’s biggest pork market. Genus has a global patent fro commercialization of pigs genetically edited to resist Procine Reproductive and Respiratory Syndrome (PRRS), which causes billion-dollar losses for the global pig industry each year. Genus is also currently seeking approval from the U.S. FDA to commercialize the virus-resistant pigs in the U.S. (Source: Reuters)

USDA officials say that nearly $10 billion has been spent out of the $12 billion earmarked for trade assistance under the Market Facilitation Program (MFP) last year. From what I understand, approximately $8.52 billion has been sent to 600,000 producers, with Illinois, Iowa, Kansas, Nebraska and Indiana the top states for payments. If you haven’t done so yet, the deadline for submitting documentation for payment claims is today.


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