Morning Commentary

Dec corn up 1 ¼ at $3.97

Nov beans up 8 ¾ at $9.2925

The DOW is up

USD is weaker

Crude oil up $.46 at $53.09

Good morning,

Corn  bulls continue to talk about extreme winter weather conditions hitting the northern Plains. We are hearing talk that the areas in question are responsible for about 10% of total U.S. corn production. And with a late-maturing crop and very little harvested in these areas, there’s certainly some production risk being considered. Also being heavily debated is the USDA’s next adjustment to the balance sheet which is scheduled for release tomorrow at 11:00 am CST. The upcoming October Supply and Demand report has all of a sudden become much more important following the recent big surprise in the USDA’s Quarterly Grain Stocks estimate. Instead of the trade sitting around talking about an overly burdensome 2.1 to 2.2 billion bushels in U.S. ending stocks we are now talking about a much more interesting 1.4 to 1.6 billion bushel ending stocks number. The current USDA yield estimate of 168.2 bushels per acre is also being heavily debated. The trend for December corn is positive. The market is poised for a test of 400. Setbacks that hold the old high at 392.75 will maintain strong upside momentum. If Thursday’s report is bearish, the market is in a prime topping area.

Soybean  prices have rallied roughly +70 cents in the past month. The USDA’s September yield estimate of 47.9 bushels per acre isn’t being as heavily debated. Interestingly, though, weekly crop conditions are being lowered and the weather is getting much more uncertain with such a late-maturing crop. Actually, a bit larger percentage of U.S. soybeans will be in harm’s way this weekend than corn. Arguably 11% to 12% of the nation’s soybean production will be located in states or areas that could be experiencing extreme winter conditions. The trend for November beans is positive. The market is poised for a run to 934.5, perhaps 940+. Closing under 895.75 alerts for a correction.

The U.S. Dairy Export Council says export values for the first eight months of the year are up three percent from last year and are the highest in five years. Shipment volumes were about the same as June and July with gains seen in cheese and higher prices for ingredients. August gains were seen for fluid milk and cream, up 13 percent, whey protein isolate, up nine percent, and whole milk powder exports were double last year. Whey exports were down 21 percent mostly because of lost sales in China.  Nonfat dry milk and skim milk powder shipments were down 18 percent from last year.  Lactose was down 9 percent and cheese exports were down six percent. (Source: Brownfield Ag News)


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