Morning Commentary

Dec corn up 1 ¼ at $3.725

Nov beans up 5 at $8.735

The DOW is up

USD is stronger

Crude oil down $.56 at $56.15

Good morning,

Corn bulls are keeping an eye on dryness in a few locations and an extremely late-maturing crop. There’s a ton of talk about the crop being late and how it might struggle to fill.  The International Grains Council (IGC) raised its U.S. corn production estimate by +2.4% to 13.455 billion bushels. The good news is the number is -446 million bushels below the current USDA estimate. The bad news, global corn production is projected up +8 MMTs compared to last month. Keep in mind, however, world ending corn stocks are still expected to be down by about -40 MMTs vs. last year. The trend for December corn is neutral-negative. Rallies checked at 381 leaves the market poised for a test of contract lows (363.75). A close over 4.00 is needed to provide fresh upside targets. Basis Thursday’s close, corn is down 10% on the month and is off 15.75% over the past three months.

Soybean bull continue to talk about the late-maturing crop and what type of yield drag could occur if cold conditions arrive a bit early? Bulls are also pointing to what appears to be improved relations with the Chinese or at least better than what they appeared to be late last week.  Until weather, the USDA, or Chinese headlines turn to favor the bulls, prices will have a hard time finding any sustained upside momentum. Bears say if none of the bullish cards get flipped over, prices could eventually deteriorate down into the $7.80 to $8.20 range in an attempt to retest the front-end lows. The trade count had the fund buying 5,000 beans, leaving them short an estimated 77,600 lots. The trend for November beans is neutral-negative. Stable action over 879.25 is the minimum needed to provide fresh upside targets. Closing under 854.5 signals a drop towards 840. Basis Thursday’s close, beans are down 0.9% on the month and are off 2.45% over the past three months.

President Donald Trump said on Thursday his administration is planning a “giant package” related to ethanol that would please U.S. farmers angry that many more oil refiners have been freed from obligations to use the corn-based fuel. U.S. farmers and ethanol producers have ramped up pressure on Trump over the past few weeks to quickly take steps to boost ethanol demand. The oil industry has struck back, saying such moves would increase costs for refiners and could cost manufacturing jobs. Trump did not offer details on what the “giant package” would contain. Corn growers and ethanol producers met this week in Nebraska, with both groups voicing dissatisfaction with the Trump administration, in the first major gathering of industry leaders since the waiver announcement. They urged a policy proposal that would redistribute waived volumes from the exemptions going forward.

Indonesia has authorized beef exports from 10 Brazilian meat-packing plants, Brazil’s agriculture minister said in a statement. The plants have the potential to export at least 25,000 metric tons of beef products, Minister Tereza Cristina Dias said in the statement, without elaborating. The authorization came after Dias held talks with Indonesian Agriculture Minister Amran Sulaiman in May as part of a tour of Asian countries to open new markets for Brazilian farm products. Five of the authorized plants are operated by Minerva SA, the company said in a securities filing on Thursday. In 2018, Indonesia imported approximately 150,000 metric tons of beef, with Australia accounting for around 40%. Brazil, home of Minerva and other large meat processors like JBS SA, BRF SA and Marfrig Global Foods, is the world’s largest exporter of chicken and beef. The country provides some 20% of total global beef exports, according to the USDA. The South American country is expected to continue growing beef exports in the coming years, reaching 23% of the world’s total beef exports by 2028, USDA projections show. (Source: Reuters)


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