Morning Commentary

Dec corn up 2 at $3.73

Nov beans up 5 at $8.7575

The DOW is up

USD is stronger

Crude oil up $.39 at $54.86

Good morning,

Corn  prices may have temporarily stabilized as the margin call gods seem content for the moment having wreaked enough havoc. Bears continue to point to the USDA’s burdensome balance sheet outlook and mostly cooperative weather in the nearby forecast. Bulls simply feel like they are out of bullets as the USDA continues to squash all talk of sub-80 million harvested acres and a sub-165 yield average. Until the USDA or some other influential sources start to turn that logic around, it’s going to be tough for the bulls to string together and extended uphill run. Don’t forget, we have the Pro Farmer Crop Tour starting up next week. I suspect their field results are going to be of major interest to many inside the trade. For the first time since August 8th, the trade count showed the fund buying corn yesterday (2,000 lots). Funds are thought to be short 35,200 lots. In tonight’s COT report, funds are expected to be shown short 14,200 lots. The short term trend for December corn is bearish but the market is at an oversold extreme. Sustained action below 388 leaves the market poised for a test of contract lows (363.75). A close over 403.25 is the minimum needed to provide fresh upside targets.

Soybean traders continue to battle it out!  Bears are armed fairly heavily with talk of ongoing Chinese trade difficulties, the continued spread of Africans. Swine Fever, stronger competition from South America, a strong U.S. dollar, and mostly cooperative weather here in the U.S. Bulls, on the other hand, are talking about significantly fewer acres and a lot more late-planted acres. NOPA showed a much better than expected crush number yesterday that might help ease some of the talks about ongoing demand destruction. Perhaps the USDA might have to backpedal a bit on their recent crush demand reduction? The trade count had the fund selling 5,000 beans yesterday. Funds are now thought to be short 85,300 lots. Funds are expected to be reported short 73,300 contracts in tonight’s COT report. If realized, funds are holding their largest short position since early June. The short term trend for November beans is neutral. Stable action outside 870.5-893.5 should provide fresh trending targets.

Brazil is “revisiting” its soybean output estimates for the 2018 and 2019 crop seasons, an official told Reuters, as discrepancies with private-sector estimates raised doubts about the accuracy of the government’s supply and demand figures. Guilherme Bastos, director of information and public policy at food statistics agency Conab, mentioned a hefty soybean export forecast from oilseeds association Abiove as one factor triggering the ongoing revision. “The balance of supply and demand is tight, there is no space for exporting 72 million tonnes of soybeans” this year, Bastos said by phone, referring to Abiove’s view. “The balance of supply and demand is tight, there is no space for exporting 72 million tonnes of soybeans” this year, Bastos said by phone, referring to Abiove’s view. Abiove, which represents trading firms like Cargill and Bunge, estimates domestic soybean production more than 6 million tonnes above the government’s in the 2017/2018 and 2018/2019 seasons combined. (Source: Reuters)

Tyson, one of the country’s largest meatpackers, reportedly petitioned the Trump administration to reduce the number of government inspectors at its factory in Holcomb, Kansas, which recently sustained heavy damage from a fire. In the request, Tyson Fresh Meats proposes using its own employees, rather than independent Department of Agriculture inspectors, to take a first look at the meat being prepared. Tyson’s employees would identify unsuitable beef carcasses and trim away defects, before USDA inspectors check every carcass that is allowed to go forward for disease and contamination, Tyson said in its March waiver proposal, which was obtained by an advocacy group through a Freedom of Information Act request. The shift would allow Tyson to speed up its factory line. The USDA is considering the request — the first of its kind for a beef plant — as part of a broader overhaul of beef inspections that aims to shift quality control from government inspectors to factory workers, while focusing the USDA’s attention on more targeted safety checks. (Source: NBC)


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