Morning Commentary

Dec corn down ¼ at $3.6125

Nov beans down 2 at $8.70

The DOW is up

USD is stronger

Crude oil up $61 at $58.01

Good morning,

Corn  bulls are talking about the recent -3% drop in weekly U.S. crop conditions, an extremely late crop, and improved headlines surrounding Chinese trade headlines. There’s some talk that these recent headlines and tomorrows looming USDA report might have been enough to temporarily push some of the bears to the sideline. The biggest question for the corn market will be tomorrows USDA report. It isn’t just about U.S. production and if the USDA will lower their estimate, but also how the USDA chooses to interpret demand. Bottom picking and consumer pricing Tuesday powered the corn market to its highest close in six sessions. Led by an increase in Dec (10,200 cax), preliminary open interest surged 16,000 lots. Since the end of August, total open interest has risen 65,000 lots while prices have slipped 9.75 cents. With Tuesday marking the cutoff for Friday’s COT report, funds are thought to be short 166,700 lots. The trend for December corn is negative. Rallies capped at 367.5 leaves the market positioned to trade 348.75. Stable trade over 379.75 is needed to provide fresh upside targets. Look for consolidation today.

Soybean  bulls are talking about improved headlines surrounding Chinese trade negotiations. There’s continued talk that Chinese officials might agree to purchase U.S. agricultural products sooner rather than later. Bulls are also talking about dry conditions in Brazil and the fact it will work to limit early-soybeans. Short covering on Tuesday propelled November beans to the highest close in four sessions. Despite liquidation in Nov, preliminary open interest rose2,500 lots. The increase in open interest can be attributed to gains in Jan and May. With Tuesday marking the cutoff for Friday’s COT report, funds are thought to be short 81,600 beans. The trend for November beans is neutral-negative.  Stable action outside 852.5-879.25 is needed to provide fresh trending targets. Look for consolidation today.

Organic farmers are expected to harvest a record 3.1 million acres of field crops this year, a +7% increase over 2018, according to a report from the firm Mercaris. That’s despite difficult weather conditions across the country during this year’s spring planting season, as well as trade headwinds that have weighed on the agriculture sector for more than a year. The increase was driven partly by the growing number of certified organic operations, with the largest jump in acres concentrated in the West. More than 500 additional producers were certified compliant with USDA’s National Organic Program in 2019, bringing the total to 18,155 organic farm operations, Mercaris said in its annual report. Overall organic production including pasture and rangeland will reach 8.3 million acres this year. (Source: Politico)


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