Morning Commentary

Dec corn down 3 ¼ at $3.665

Nov beans down 5 at $8.64

The DOW is down

USD is stronger

Crude oil down $1.38 at $53.72

Good morning,

Corn  prices traded in a mostly sideways channel during the last-half of August. Bulls got knocked out by the August 12th USDA report then stumbled backwards for a few more days. But since mid-August (15th), the DEC19 prices have traded between $3.64^2 and $3.81 per bushel. Keep in mind, both FCStone and Informa are both scheduled to release updated crop estimates this week. In their early-August estimate, FCStone tossed out a 167 yield average with total production at 13.992 billion bushels. The USDA estimated the average yield in their August 12 report at 169.5 bushels per acre and total production at 13.901 billion bushels. The trend for December corn is neutral-negative. Rallies checked at 381leaves the market poised for a test of contract lows (363.75). A close over 400 is needed to provide fresh upside targets.

Soybean  bulls backpedal a bit on mostly cooperative U.S. weather and another round of Chinese tariffs officially going into play. Most sources seem to be thinking USDA weekly crop conditions could tick a hair higher based on good weather this past week. Bulls however still continue to question if the crop will finish before the first cold-snap hits the Midwest. The trend for November beans is neutral. Stable action outside 863.5-879.25 is the minimum needed to provide fresh trending targets.

China said its trade dispute with the United States would not affect the Asian nation’s pork supply, state-television reported on Friday, citing an official at the agriculture ministry. The comment came before an additional 10% tariff imposed by China on U.S. farm imports kicks in on Sept. 1. Pork prices in China have soared to a record level after African swine fever (ASF) swept through the country’s pig herd. “The amount of American pork imports accounts for less than 0.2% of Chinese output, and the trade dispute with the United States has no impact on pork supply and pork prices in China,” said Xin Guochang at the husbandry and veterinarian bureau at the Ministry of Agriculture and Rural Affairs told CCTV. China, the world’s biggest pork consumer and hog producer, produced 54.04 million metric tons of pork in 2018. INTL FCStone estimated the figure would fall to 38 million metric tons in 2019 and 34 million tonnes in 2020 as China continued to struggle to control ASF. Pork imports in the first seven months rose 36% from the same period a year earlier to 1 million metric tons. (Source: Reuters)

Truck Makers Apply the Brakes: The U.S. trucking industry had one of its strongest years ever in 2018, as high demand for freight encouraged transportation companies to expand their fleets. Now, trade tensions and slower global growth are depressing freight volumes. Freight rates have fallen more than 20% from a record in June 2018. Now, there are more trucks than there are loads. Orders for heavy-duty models from the four largest truck makers in North America—Daimler Trucks North America LLC, Paccar Inc., PCAR 0.28% Volvo Trucks USA and Navistar International Corp. —fell 80% in July from a year earlier, says market forecaster ACT Research. Orders in June declined 69% from a year earlier.

The U.S. unemployment rate is so low that some cities and states have turned into “worker deserts” — places where companies can’t find people to hire. The “good news” story of the strong labor market has a big downside that is playing out in places like Iowa, New Hampshire and Florida, where companies say they can’t keep up with business demand — hampering growth — unless they find more workers. Across the country, there are more than 1 million more jobs available than there are people to fill them. In Iowa, for instance, the unemployment rate was 2.5% in July, just 1 percentage point above the lowest level on record. According to the most recent government data, there are 70,000 fewer unemployed Iowans now than there were at the onset of the current economic expansion. That’s great for Iowans, but there’s a catch: Population growth in the working-age demographic has been shrinking since 2015, according to the U.S. Census Bureau, while more Iowans are aging out of the labor force. A dramatic example of how far companies are willing to go to find new workers is Iowa-based Wells Enterprises, which makes Blue Bunny ice cream. It opened new facilities across the country for the sole purpose of finding employees.


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