Morning Commentary

Dec corn unchanged at $3.7575

Jan beans up 2 ½ at $9.1925

The DOW is up

USD is weaker

Crude oil up $.10 at $56.87

Good morning,

Corn  bulls are pointing to better ethanol headlines. Weekly ethanol production continues to bump slightly higher while stocks tighten a bit. In fact, ethanol stocks are down just over -10% compared to last year at this time and at the lowest levels we’ve seen in over two years. Also, Brazil’s corn exports have been record strong. With record exports and more corn-based ethanol plants coming online that means less ending stocks for Brazil.

Soybean  bulls are pointing to continued buying from Chinese importers and the fact China officially lifted bans on U.S. poultry…meaning that perhaps we are getting closer to a “Phase 1” trade deal. Bears are pointing to the fact Brazilian soybeans start to get cheaper than U.S. soybeans out past early-February so the Chinese buying window for U.S. beans could be somewhat limited. Most inside the trade are looking for the USDA to announce another set of strong weekly export sales numbers this morning. U.S. demand seems strong enough to support a bullish story into 2020.

Beijing lifted a nearly five-year ban on imports of U.S. poultry meat on Thursday, a move the U.S. Trade Representative said would lead to more than $1 billion in annual shipments to China. China’s decision comes as the world’s two largest economies are trying to finalize a limited trade deal. It is also driven by an unprecedented shortage of meat in China after a fatal hog disease, African swine fever, has killed millions of pigs in the pork-loving country over the past year. China, the world’s top pork consumer, will likely buy all types of U.S. chicken, turkey and duck to offset the pork shortage, said Jim Sumner, president of the USA Poultry & Egg Export Council, an industry group. Beijing banned U.S. poultry and eggs in January 2015 because of a U.S. outbreak of avian flu, closing a market that bought $500 million worth of American poultry products in 2013, according to the U.S. Department of Agriculture. China’s total imports of chicken surged nearly 48% to 9.2 billion yuan ($1.3 billion) in the first nine months of this year, including breast meat, which is normally in surplus in the country. (Source: Reuters)

USDA’s Risk Management Agency (RMA) has announced it will continue to defer interest on crop insurance premiums to ag producers until January 31 for all policies with a premium billing date of August 15. Keith Gray, chief of staff for the RMA, says this will help farmers and ranchers impacted by the extreme weather in 2019. He tells Brownfield the decision was made to continue to extend flexibility for producers. The USDA previously announced a deferral to November 30, providing producers with an additional two months from the traditional September 30th date. Producers will have until January to pay the 2019 premium without accruing interest. (Source: Brownfield Ag News)

Global debt hit a fresh record above $250 trillion in the first half of 2019, with China and the U.S. accounting for more than 60% of new borrowing, the Institute of International Finance said. Borrowing by governments, households and non-financial business now accounts for more than 240% of the world’s gross domestic product, and it’s growing faster than the global economy, the Washington-based IIF said in a report published Thursday. In developed countries, it’s governments that account for the bulk of borrowing over the past decade, the IIF said. In emerging markets, companies have taken the lead — but more than half of corporate debt in those countries is likely held by state-owned businesses. And it said that “high-debt countries that also have high exposure to climate risk” — like Japan, Singapore, Korea and the U.S. — may struggle with the rapid increase in funding that the fight against climate change will require. IIF expects the global debt load to exceed $255 trillion by the end of the year, with the U.S. and China leading the way. (Source: Bloomberg)


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