Morning Commentary

Dec corn down 1 ¼ at $3.6675

Nov beans down 2 at $8.9175

The DOW is down

USD is stronger

Crude oil down $1.03 at $58.31

Good morning,

Corn bulls are battling extremely cooperative U.S. weather. The late crop is enjoining a warmer end to summer which is helping the overall filling process. There’s also very little risk of a cold-snap anywhere in the forecast.  We continue to talk about corn staying stuck in a range between $3.20 and $4.20 per bushel. The problem is $4.20 might not come back around again until the next major weather scare either in South America or next seasons U.S. crop. I know that’s not what producers want to hear, but with demand in question, ample U.S. ending stocks, cooperative U.S. weather into harvest, talk of more corn acres in 2020, ongoing trade dispute with the Chinese, a strong U.S. dollar in comparison to other global exporters, it’s tough for the bulls to put together a large enough wave of headlines that are needed to tip the bearish boat. The trend for December corn is neutral.  Stable trade outside 360.5-379.75 is needed to provide fresh trending targets

Soybean bulls continue to point to the abnormally large number of fields that have still not set pods, but I did see the first bean field being harvested west of Webster City last night. Chinese demand obviously remains a huge question as both trade negotiations and the ongoing spread of African Swine Fever create a lot of unknown. The Chinese government has cleared the path to purchasing a select amount of U.S. soybeans, but we still haven’t seen any major buying. The trend for November beans is neutral-positive.  Stable action over 879.25 should prompt a run to 911-912.  Consistent trade below 871.5 signals renewed weakness. 

South Korea has raised its animal disease alert to the highest level after discovering its first outbreak of deadly African swine fever at a pig farm in Paju, a town near its border with North Korea, the agriculture ministry said on Tuesday. The case was reported less than four months after North Korea reported its first outbreak in late May. Kim Hyeon-soo, South Korea’s agriculture minister, told reporters on Tuesday that in addition to raising the alert level, nearly 4,000 hogs would be culled to prevent the spread of the virus. The ministry also ordered a nationwide movement ban of hogs and related livestock for 48 hours while looking into the source of the virus, he said. African swine fever is highly contagious and nearly 100% fatal to swine herds. It occurs among pigs and wild boars, transmitted by ticks and direct contact between animals. There is no vaccine for the disease, but it does not affect humans. South Korea, Asia’s fourth-largest economy, imports most of its pork from the U.S. and Germany, with imports accounting for about a third of the country’s total pork supplies. South Korea has a pig population of 11.3 million, according to Statistics Korea, and pork, cheaper than beef, is South Korea’s most popular meat.

The African swine fever virus (ASW) can survive a 30-day transoceanic voyage in plant-based feed and ingredients, according to a study by Kansas State University . The new data highlights the potential risks of imported feed, and can be used by the U.S. and other countries to safeguard their pork production, said Megan Niederwerder, who led the team of veterinary researchers. USDA, in outlining its strategy to respond to African swine fever, noted that ingredients like corn, soybeans and flax aren’t regulated to mitigate against foreign animal diseases. These ingredients are exported by countries affected by the virus, including China, which accounted for about 11 percent of America’s soybean imports between 2015 and 2018. Organic soybeans present a higher risk of being a pathway because the crop isn’t treated by chemical agents used to reduce bacteria, the department said. USDA’s Animal and Plant Health Inspection Service in March said it would identify and rank what factors could predict whether a feed shipment posed a risk of introducing African swine fever into the U.S. to help research and response efforts. (Source: Politico)

The United States Department of Agriculture on Tuesday released a final rule permitting faster line speeds at hog processing plants, a long-anticipated change that parallels recent developments in the poultry industry. The new rule allows slaughterhouses to opt in to the New Swine Slaughter Inspection System (NSIS), a “modernized” system that eliminates maximum line speeds and shifts some of the responsibility for removing sick animals from the processing line from USDA inspectors to plant employees. A version of the NSIS has been operating as a pilot in five plants since the 1990s. The rule also mandates some additional food safety testing across the board. Perhaps unsurprisingly, the NSIS is popular with the pork industry and unpopular with food safety and worker health advocates. The agency’s Food Safety and Inspection Service argues that the changes will free up inspectors to spend more time on inspection tasks that take place outside the fast-paced slaughter line, like verifying that certain sanitation requirements are being met. (Source: New Food Economy)


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