Morning Commentary

May corn down 2 ¼ at $3.8825

May beans down 2 ½ at $10.3675

The DOW is up

USD is stronger

Crude oil down $.57 a $61.47

Good morning,

Corn bulls are wanting to see the market hold it’s recent gains. Prices are slightly lower this morning but still up over +5% in the past 30-days and up over +8% in the past 90-days.The corn market is correcting after testing the weekly highs at $3.94 ½. A close over that would be significant and project a rally to targets at $4.16. Right now, look for more of a correction but expect $3.86 to offer support. Look to buy the break there. Risk a close under the $3.80 level.

Soybean prices are slightly lower this morning after taking a big step back late last week. In fact, the market is now up less than corn or wheat on a year-to-date basis. Prices have actually fallen back to the highs that were posted back in early-December of last year. If you remember, the MAY18 contract traded to $10.37 in early-December, then tumbled all the way down to nearly $9.55 by mid-January before posting it’s most recent run. The market has now trimmed nearly -50 cents from it’s highs in the past five trading sessions. The index fund long, at over 155,000 contracts, is the second largest since spring 2012.  As a result, the combined speculative long is 30% of total open interest.  From a technical standpoint, our 1043 objective was met Friday.  In closing below 1043, the trend for May beans has shifted negative.  Look for a near term test of 1018.5 support.  A close over 1064.75 is needed to alter the outlook.  Short May beans, system traders will find buy stops around 1046. 

Large poultry companies like Tyson Foods and Pilgrim’s Pride exert so much control over their contract farmers’ operations that these growers don’t appear to meet the regulatory definition of a small business required to be financed by the Small Business Administration, according to a report by the agency’s Office of Inspector General. Between fiscal 2012 and 2016, SBA guaranteed about $1.8 billion in loans to poultry farmers – accounting for more than three-quarters of its agricultural portfolio. (Source: Politico)

The Iowa Senate gave final passage to a controversial bill requiring Iowa grocers in a supplemental food program to offer conventional eggs if they sell eggs from chickens housed in a cage-free, free-range or enriched colony cage environment. House File 2408 was approved 32-17, sending it to Republican Gov. Kim Reynolds for her consideration. The legislation would apply to grocers participating as a vendors in the special supplemental food program for Women, Infants, and Children, known as WIC. The program is administered by the U.S. Department of Agriculture in cooperation with state officials, and the bill would allow state officials to seek a federal waiver if necessary. Supporters of the bill have pointed out that Iowa is the nation’s leading egg producer, noting the egg industry provides thousands of jobs and consumes millions of bushels of Iowa corn and soybeans. But critics have charged the legislation is evidence that large-scale, corporate-style agriculture is dictating policy decisions at the Iowa Capitol. (Source: Des Moines Register)


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