Morning Commentary

Dec corn up ½ at $3.8725

Nov beans down 1 ¾ at $9.315

The DOW is down

USD is stronger

Crude oil down $.16 at $56.07

Good morning,

Corn  traders continue to debate the balance sheet details. Bears point towards weakness in overall demand, i.e. struggling exports, tight margins in the ethanol space and uncertainties still swirling around the EPA’s small refinery waivers. Keep in mind, export commitments are down nearly -50% compared to this time last year. Bulls still believe U.S production is overstated and the USDA will eventually be forced to make an aggressive adjustment lower. Most bulls are thinking the average U.S. yield is in the 160 to 165 range vs. the current USDA estimate of 168.4 bushels per acre.

Soybean  bulls continue to point towards headlines and rumors circulating that Chinese importers are eventually going to be big buyers of U.S. beans. Bulls are also pointing to the continued rally in bean oil. Bears are pointing to weaker than expected weekly export sales, actually, the lowest of 2019/20 marketing year and limited sales reported to China.

Brazil is hopeful China will authorize more local meat exporters before Chinese President Xi Jinping visits Brazil next month, as the South American country seeks to position itself as a major food exporter to the world’s most populous nation. In September, China granted export licenses to 25 Brazilian meatpacking plants, allowing the country’s fast-growing protein industry to feed more people in the Asian nation, where the deadly AFS pig disease has cut local supply. Discussions between a Brazilian delegation to China and local authorities this week also covered demand for Brazilian commodities like sugar, cotton and ethanol, according to Brazilian Agriculture Minister Tereza Cristina Dias. Brazil would also like to increase exports of soymeal to China, but Dias says more discussions are still underway. Last year, Brazil exported 68.9 million metric tons of soybeans to China and only 90,000 metric tons of soymeal, according to government data. (Source: Reuters)


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