Morning Commentary

Dec corn up ¼ at $3.735

Nov beans up 1 at $9.06

The DOW is up

USD is stronger

Crude oil up $.33 at $57.19

Good morning,

Corn  prices on the board have deteriorated by about -25 to -30 cents in the past month. the bulls were betting on a production story that never fully unfolded. While the bears have continued to gain confidence in a weaker U.S. demand story. Technically, bears are eyeballing the $3.65 area and the DEC19 low at $3.52^2 posted back on September 9. For what it’s worth, the most recent DEC19 high was posted at $4.73 back in mid-June.

Soybean  bears are talking about ongoing uncertainty regarding Chinese trade negotiations as well as better and more wide-spread rains in South America. The USDA’s curve-ball last week to the balance sheet buckled a few bulls who were looking for a fastball right down the middle of the plate. Most were looking for a further reduction in total U.S. production and in turn another reduction in ending stocks. Instead, there was no real meaningful adjustment to U.S. production and demand was actually lowered, which ultimately pushed ending stocks higher, not lower like the trade was thinking.

Cattle markets saw some issues surrounding the release of certain USDA data yesterday, but the cash trade summaries would suggest that cattle largely traded 2.00/CWT higher in the south and either side of unchanged in the north. Maybe the more important thing associated with last week’s cash trade was the volume. The national number printed something over 120,000 head of negotiated trade on the week. We are forecasted to have ample supplies moving forward, but large trade volumes like that will keep us as current as possible through the fall. The beef cutout moved nearly 6.00/CWT higher last week and now brings the blended cutout something around 30.00/CWT off recent lows. Last week’s estimated cattle slaughter came in at 651,000 head aided by a robust Saturday harvest. Some interest over the weekend in regards to a SW KS regional media outlet printing an article that would suggest the Tyson-Holcomb beef plant could be up by the end of the year if not slightly before. This is obviously not dramatically different than the previously mentioned January date but in our current setup, the notion that the repairs are on or ahead of schedule may go a long way towards comforting portions of the industry. Futures remain in an uptrend and overbought. Feb20 LC traded into fresh move highs and will take over as the largest open interest month today with a sizeable long roll out of Dec19 LC. Bulls touting the trend and firming fundamentals. Bears looking for some fall corrective break and looking for large fall market ready numbers to potentially pressure cash markets. Trey Warnock – Amarillo Brokerage Company

Propane suppliers are facing a supply challenge this fall due to farmers’ increased need for crop drying across the Midwest, according to CHS. The issue is not a propane shortage, the National Propane Gas Assn. (NPGA) reported; rather, the challenge is getting propane to the right place at the right time. NPGA relayed that the supply issues are caused by limits on the safe transportation of propane from supply points as well as limits on pipeline capacity. The high demand for propane is being felt by Midwest farmers, whose propane is primarily sourced from Kansas, Texas and western Canada and transported by pipeline, rail or truck, CHS explained. The Minnesota Propane Assn. said in an average November, propane marketers in Minnesota use 190 transport loads of propane per day for the state. This year, however, nearly 300 transports have been shipping per day. The Federal Motor Carrier Safety Administration has declared a regional emergency for Iowa, Kansas, Illinois, Nebraska, South Dakota, Missouri, Wisconsin and Minnesota. Several state governors have also issued executive orders to waive hours of service for the delivery of propane due to long wait times at terminals. (Source: Feedstuffs)


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