Morning Commentary

Sept corn up ½ at $4.045

Nov beans up 1 at $8.6675

The DOW is down

USD is weaker

Crude oil down

Good morning,

Corn  traders continue to debate supply and demand. Bulls are talking about possible production setbacks associated with a late-planted U.S. crop and weather abnormalities in many key growing regions. Bears are pointing to ongoing demand headwinds associated with exports, ethanol and feed usage. Argentina, Brazil and Ukraine are producing many more bushels than several years ago and their currencies being heavily devalued compared to the U.S. dollar is making export competition extremely stiff. There’s also been a ton of talk that the oversupply of wheat in the global marketplace has been creating a headwind for corn. The short term trend for December corn is negative. A close under 397.25 signals a return to contract lows. Sustained action above 423 is the minimum needed to provide fresh upside targets.

Soybean  traders continue to debate “Weather vs. Washington”. Bulls are argue continued concerns about U.S. weather and a late-planted crop that could eventually run into more serious headwinds. On the flip side, bears argue that Washington is willing to wage a deeper war with China, who happens to be the worlds #1 buyer of soybeans. The trade count showed the fund selling 3,500 beans yesterday. With Tuesday marking the cutoff for Friday’s COT report, they’re now thought to be short 87,500 lots. The short term trend for November beans is bearish. A close under 853.5 signals a fresh wave down. Stable action over 886 is the minimum needed to suggest renewed rally attempts.

USDA recently released fresh ag-trade data, which reflected slumping exports of crops to China. From October through June, exports totaled just 8.7 million metric tons, which is a huge decrease from 25 MMT over the same period in fiscal 2018. That represents a difference of $6.5 billion in sales. Overall, ag exports through June totaled $103 billion, compared with nearly $111 billion at the same point last year. (Source: Politico) 


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