Morning Commentary

Dec corn down 1 at $3.675

Jan beans down 1 at $9.00

The DOW is up

USD is stronger

Crude oil down $.22 at $58.36

Good morning,

Corn  bulls are simply excited to see the bleeding slow down and perhaps stop. Demand seems to be improving ever so slightly for both exports and ethanol. Three times this week we’ve had the USDA announce export sales of +100,000 MTs to “unknown” destinations. Yesterday’s weekly export sales data was also an arguable improvement. We’ve also seen ethanol production tick slowly higher for about the past eight weeks. Bears, however, still believe the USDA will offset any major yield reduction or production cut by simply trimming a few more bushels from demand. Depending on who you talk with exports could arguably be reduced by another -50 to -75 million bushels. I’m hoping we continue to see some buying interest nearby which prompts the USDA to pause for a moment. Bears also argue that corn used for ethanol could easily be trimmed by another -25 million bushels. The trend for December corn is negative. Consistent trade below 371.25 on a closing basis will position the market to trade 363 perhaps 358.5. Stable action over 388.25 is the minimum needed to provide fresh upside targets.

Soybean  traders continue to pay close attention to Chinese trade headlines and South American weather. Technically, the JAN20 market is flirting dangerously with the psychological level of $9.00 per bushel. Bears argue a close below $8.94 could quickly open the door down to $8.65, which as a producer, starts to become much more difficult to digest.

U.S. farm exports are projected to total $134.5 billion for fiscal 2019, which ended Sept. 30, while ag imports totaled $129.3 billion, according to the Agriculture Department’s estimates. The projected surplus of $5.2 billion would be the smallest since fiscal 2006. The U.S. in the last 50 years has never run an agricultural trade deficit, according to USDA data going back to 1967. But the value of agricultural imports has been rising faster than the value of farm exports, including lower than expected corn and soybean exports in fiscal 2019. USDA’s initial estimates for fiscal 2020 suggest the trade balance could climb to $8 billion, based on projected exports of $137 billion and imports of $129 billion. Former USDA Chief Economist Joseph Glauber, now a visiting fellow at the American Enterprise Institute, takes a deep dive into the department’s trade relief program for farmers affected by Trump’s trade war with China, which has slammed U.S. ag exports since mid-2018.(Source: Politico)

The New York Department of Agriculture and Markets published a notice of adoption in the New York State Register on Nov. 20 allowing the sales of E15 within the state, opening the fourth-largest fuel market in the U.S. to sales of E15. According to the notice, Growth Energy, the American Coalition for Ethanol, the Renewable Fuels Association and other groups opposed the prohibition on mid-level blends with more than 15 percent and less than 51 percent ethanol. The department said it did not amend the proposed rule as requested by these commenters. In the notice, the department said it “feels that a gradual introduction of higher ethanol blends will allow consumers and the industry time to adjust to new fuel choices,” but noted it intends “to closely monitor the marketplace and will consider, at some future point, allowing additional blends if the marketplace adapts well to the introduction of E15.” (Source: Ethanol Producer)

Asia’s food and agriculture industry needs investment of $800 billion over the next 10 years to meet the region’s growing food demand, a jointly produced report shows. Investments will unlock annual market growth of around 7%, with the region more than doubling its spending on food to more than $8 trillion by 2030, according to the report by consultancy PwC, Rabobank and Singapore state investor Temasek. Asia’s growing population and rising incomes are resulting in higher demand for protein-rich foods which require investment in setting of food supply chains. The report, titled The Asia Food Challenge, sees several Asian cities, such as Beijing, Hong Kong, Mumbai, Singapore and Tokyo, having the potential to become agriculture-food tech hubs. The report said the Singapore Food Agency has set a goal to produce 30% of the country’s nutritional needs by 2030 by adopting new solutions and technologies to grow more with less. (Source: Reuters)


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