Morning Commentary

July corn up ½ at $4.275

July beans up 2 at $8.7975

Crude oil up $.1.05 at $54.55

USD is weaker

Good morning,

Corn bulls face some headwinds as rains over the weekend were a bit less than anticipated, the U.S. forecast shows some windows of opportunity for producers in several key corn growing regions, and fears of demand destruction are escalated on continued talk of trade uncertainties with Mexico. Keep in mind, Mexico has become our top destination for U.S. corn exports, so as you can imagine the trade is a bit nervous. The fear is if the Mexican government wants to retaliate against the U.S., it will more than likely target agricultural goods produced in states that heavily voted for U.S. President Donald Trump i.e. the market worried that corn exports could be in the cross-hairs. The USDA is scheduled to release their updated planting progress numbers this afternoon. Most sources seem content forecasting 68% to 73% will now be planted vs. just 58% last week vs. the 5-year traditional planting pace of +95% by this time of year.

Soybean bulls might have gotten a bit ahead of themselves? Keep in mind, the market added close to +50 cents in premium last week alone. Bears argue that soybean planting can actually get caught up in the next few weeks and that ongoing trade tensions with the Chinese should work to keep a lid on most extended rallies. It feels like the bulls might now be inclined to pause and look around a moment. From a technical perspective, it would be nice to see new-crop soybeans garner enough strength to stay above the $9.00 range. In case you are wondering, the recent new-crop NOV19 high was posted at $9.18^4 three days ago. Don’t forget, after today’s close most sources are looking for the USDA to show 39% to 44% of the U.S. soybean crop is now planted vs. 29% last week vs. the 5-year historical average which is closer to 75% planted by this date.

Hong Kong confirmed its second case of African Swine Fever, with the government ordering a cull of 4,700 hogs. The latest was found in a slaughterhouse in the New Territories, bordering China’s southern province of Guangdong. The slaughter house was closed over the weekend for disinfection. Hong Kong’s first case was confirmed three weeks ago. The disease has now spread to every province on the Chinese mainland and is now even further broadening its reach. ( Source: Reuters)


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