Morning Commentary

Dec corn down 2 at $3.7575

Nov beans up ¾ at $9.065

The DOW is down

USD is stronger

Crude oil down $.19 at $56.61

Good morning,

Corn  bulls are pointing to some renewed strength in the wheat market and a U.S. harvest that continues to lag well behind. The USDA showed the U.S. corn harvest just 66% complete vs. 85% traditionally harvested at this stage. Somewhat shockingly, North Dakota still only has 15% of their entire crop harvested vs. what’s traditionally 76% harvested by this date; Wisconsin just 30% harvested vs. 65% historically; Michigan just 33% harvested vs. 64% historically; South Dakota has just 39% harvested vs. 82% historically; Minnesota 63% harvested vs. 87%; Iowa 64% harvested vs. 86%. The trend for December corn is negative. A key support zone begins at 371.25. Stable action over 398.75 is needed to fuel a fresh bull wave. A close over 391 hints at a return to 398.75.

Soybean  bulls are pointing to continued strong export inspections and a U.S. harvest pace that continues to lag expectations. The USDA showed the U.S. soybean harvest 85% complete vs. 92% historically at this stage. States lagging the furthest behind are Wisconsin 71% harvested, Missouri 72%, Michigan and North Dakota 74%, Kansas and Kentucky 83%. The trend for January beans is neutral. Stable action outside 903.75-942.5 is needed to provide fresh trending targets. With the trade count showing funds buying 1,500 beans yesterday, they’re now estimated to be long 16,500 lots.

Dallas-based Dean Foods announced it initiated Chapter 11 proceedings “to enable us to continue serving our customers and operating as normal as we work toward the sale of our business,” Eric Beringause, who recently joined the Dean Foods as president and CEO, said in a statement yesterday. Dean Foods products include Dairy Pure, TruMoo, Land O’Lakes, Lehigh Valley Dairy Farms and Oak Farms. The bankruptcy comes amid another tough year for the milk industry. Dean and dairy farmers for years have grappled with consumers’ decades long move away from traditional cow’s milk, as beverage sales shift toward bottled water, fruit juices and milk alternatives made from soy and oats. Within the milk business, Dean’s brands have struggled to compete with low-price store brands, some of which have even opened their own milk plants. The company said it has secured financing to continue operations and pay employees while it discusses a potential sale to Dairy Farmers of America Inc., the largest U.S. dairy cooperative. Dean operates about 60 dairy processing plants in 29 states, a network it built through years of acquiring regional dairy companies to become the top U.S. milk processor by volume. (Sources: Wall Street Journal, ABC News)

Tyson Foods fell short of Wall Street estimates for quarterly revenue and profit on Tuesday after a fire at a Kansas slaughterhouse hurt sales volumes in its beef business. Tyson grappled with the fire as the global meat industry focused on increasing sales to China. Sales rose nearly +9% to $10.88 billion, but missed analysts’ average estimate of $11 billion, according to IBES data from Refinitiv. Excluding items, the company earned $1.21 per share, compared with the average analyst estimate of $1.29. Volumes in Tyson’s business fell 4.2% in the fourth quarter to Sept. 28, with sales down 1.3%. The fire also resulted in $31 million of net incremental costs, the company said. Tyson’s operating margins for beef were 9.7%, up from 8.9% a year earlier. Margins declined in its pork, chicken and prepared foods units. (Source: CNBC)


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