Morning Commentary

Dec corn unchanged at $3.7875

Nov beans up 3 at $9.18

The DOW is up

USD is stronger

Crude oil up $.85 at $57.20

Good morning,

Corn  continues to slosh around in a sideways to lower pattern. Technical traders seem to be keeping a close eye on the nearby DEC19 low at $3.78^2. A close below that level could perhaps open up more downside pressure. There seem to be several bearish technical targets down in that $3.50 to $3.70 range, so stay alert. IEG Vantage, formerly Informa, raised its average U.S. yield forecast from 167.5 to 168.6 with total production bumped higher to 13.792 billion bushels. FC Stone also bumped its U.S. corn yield estimate higher from 169.3 to 170.0 and in turn, slightly increased its production forecast. The USDA currently has the U.S. yield projected at 168.4 bushels per acre and total production of 13.779 billion.

Soybean  bears are listening to whispers and rumors of pessimism regarding U.S. and Chinese trade negotiations. Most of the market is eagerly awaiting tomorrow’s USDA report. Bulls are hoping to see the USDA reduce its U.S. production estimate and further shrink the balance sheet. Bears are pointing to improved weather in South America and talk of increasing estimates. Of course, the future of U.S. and Chinese trade talks remain a heavy uncertainty. Technically, the trade is eager to see if the bulls can push the JAN190 contract north of $9.60, something that hasn’t happened since early-March. Nearby support seems to be in the $9.20 to $9.25 range, below that level we start to talk the $8.65 to $9.00 range, a level we last traded in during August and September.

China’s state-owned agriculture conglomerate COFCO said it has agreed to buy $100 million worth of pork from top European pork producer Danish Crown by 2020, to help plug a domestic pork shortage following a widespread pig disease. The two companies signed a preliminary purchase agreement on the sidelines of the China International Import Expo in Shanghai. Lars Albertsen, sales director at Danish Crown, said no volumes had been agreed yet, but he said the sale was “one of the biggest deals we’ve done out here in a long, long time”. He also says the deal could be expanded, given the huge needs from China. Europe’s top pork exporter, Danish Crown has done several deals with COFCO this year, turning it into a preferred supplier, said Albertsen. The Danish Crown deal follows yesterday’s news that China had reopened the market to pork and beef imports from Canada. (Source: Reuters)

Corn growers and ethanol producers have grown increasingly frustrated that Trump’s blending waivers for oil refiners are deflating the domestic biofuel market. While they continue pleading with the White House for a solution, the industry is hoping foreign buyers can help make up for the sales they’re losing back home. Trade groups including the U.S. Grains Council and American Coalition for Ethanol have been working with Mexican officials to promote the use of a 10 percent ethanol blend. They’re hosting workshops and targeting Mexican gas station owners, petroleum equipment retailers and the nation’s ag and energy officials. U.S. ethanol exports to Mexico have largely been used for producing other goods, rather than as transportation fuel. But retailers in border cities are increasingly buying pre-blended E10 at U.S. terminals and reselling it at Mexican stations. Mexico currently allows E10 nationwide except in its three major cities: Guadalajara, Mexico City and Monterrey. But Ryan LeGrand, CEO of the Grains Council, said he expects Mexican energy regulators to present a proposal to allow E10 in those cities by the end of 2019. “Once the entire country is open, there’s a potential 1.2 billion gallons of ethanol exports to Mexico,” LeGrand said. Beyond Mexico, biofuel producers are aiming to grow sales in South Asia. And corn growers are hoping that China could make a significant purchase of U.S. ethanol as part of the limited trade deal that officials are expected to finalize this month. (Source: Politico)

USDA to Pay Tyson Foods $1 Million Settlement Over Federal Inspector’s False Reports: The settlement is linked to a lawsuit in which the meat processor said a federal meat inspector lied about inspecting hogs at its Storm Lake, Iowa, plant, forcing the company to destroy 8,000 carcasses and resulting in $2.4 million in losses and expenses. Tyson Foods filed suit against the government agency in May after an inspector signed inspection cards for 4,622 hogs at the Storm Lake facility. The antemortem inspections were never actually conducted by the agency in person as the report stated. The meat giant was able to show the courts the inspector never left her car but signed the cards without seeing the hogs. Tyson Foods said it incurred losses of $2.48 million from the false reports. By the time it learned of the alleged actions, the negligently inspected hogs had been intermingled into a larger group of some 8,000 hog carcasses and therefore could no longer be positively identified and the entire group had to be destroyed. (Source: KATV)


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