News

Morning Commentary

Dec corn up 1 ¼ at $3.86

Nov beans unchanged at $9.1625

The DOW is down

USD is stronger

Crude oil up $.83 at $53.64

Good morning,

Corn  bulls added +13 cents last week to the market and are hoping to add a bit more. The colder weather forecast for the U.S. and talk of heavier snow late this week in the northern Plains could help add a bit more weather-related premium with the crop yet to reach full maturity. Brazil has gotten a bit of rain as of late to help ease some nearby concern but looking ahead there could still be some concerns about dry conditions. Most inside Argentina continue to talk about dry conditions but the planters have been rolling. The October USDA report is scheduled to be released this Thursday and is being highly anticipated. Most inside the trade seems to be looking for a slight yield reduction. The big question now is will the USDA continue to lower its yield forecast? This past Friday, Informa cut their corn yield forecast from 169.6 down to 167.5 bushels per acre. The USDA is currently forecasting an average yield of 168.2 bushels per acre. The trend for December corn is positive.  Stable trade above 377.5 is likely to prompt a rally towards 400.  Closing under 367.5 signals renewed weakness.  Nearing 22,000 lots shorter than indicated by the trade count, the COT report showed the fund short 145,000 contracts on a futures and options basis as of October 1st versus 185,000 the week prior.  Based on trade flow Wed-Fri, they’re now thought to be short 157,500 lots.  Commercials increased their net short by 50,000 lots during the last reporting period and now hold their largest short in a month. 

Soybean  bulls are coming off a big week adding +33 cents to its price. The bulls are now looking for confirmation that harvest is running extremely late and a significant portion of the crop is struggling to reach maturity. Most sources inside the trade are thinking the U.S. crop is 12% to 14% harvested vs. what’s traditionally 33% to 35% harvested by this date.  Informa recently lowered its soybean yield estimate from 48.4 down to 46.5 bushels per acre and total production down from 3.671 billion bushels down to 3.513 billion bushels. The trend for November beans is positive.  Stable action over 912 is bullish for a run towards 940.  Be cautious of a setback from 934.5 on the first test.  Closing under 896.5 alerts for a setback.  16,500 lots less short than indicated by the trade count, the COT report showed the fund short 26,000 contracts on a futures and options basis as of October 1st versus 61,000 the week prior.  Based on even trade flow Wed-Fri, they’re estimated to be short 26,000 lots.  Commercials increased their net short by 43,000 lots during the last reporting period and now hold their largest short since June 2018.

The Trump administration on Friday unveiled a plan to boost U.S. biofuels consumption starting next year to help struggling farmers. The plan would require an unspecified increase in the amount of ethanol that oil refiners must add to their fuel in 2020, and would also aim to remove further barriers to the sale of higher ethanol blends of gasoline like E15, the Environmental Protection Agency said in a statement. However, while the final plan won widespread praise from biofuel advocates, it was condemned by oil industry leaders who decried it as a politically motivated policy shift that punishes refiners, consumers and manufacturing workers. The EPA is set to formally propose changes this week.  The agency said it would seek public comment on ensuring more than 15 billion gallons of conventional ethanol are blended into the nation’s fuel supply beginning in 2020 and that statutory obligations for biodiesel also are satisfied. (Source: Reuters)

 

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