Morning Commentary

March corn up 1 ¼ at $3.6675

Jan beans up 6 ¾ at $8.91

The DOW is up

USD is stronger

Crude oil down $.56 at $57.87

Good morning,

Corn bears continue to point towards weak demand and ample supply. Weekly export sales numbers were once again a disappointment. Bulls point to the fact last week was shortened by the holiday so perhaps it wasn’t all that bad. Keep in mind, the USDA will be releasing its December Supply and Demand report next Tuesday, December 10. Even though the USDA won’t be updating its production forecast in this report many traders are curious about overall demand? Bears want to argue that both exports and ethanol need to be lowered. The trend for March corn is negative. A close below 373 would prompt the next leg down. A close over 389.5 confirms additional corrective action. The trade count had the fund selling 4,000 corn Thursday. Based on the trade count, funds are thought to be short 142,000 lots.

Soybean bulls are talking about a large Argentine crusher perhaps running into a few problems which could ultimately help provide price support for U.S. meal. Perhaps more importantly traders are preparing and bracing for what could be a big week coming up. Remember, we have the monthly USDA Supply and Demand report on Tuesday, then the new tariff trade deadline on Sunday, December 15th. The trend for January beans is negative but closing over 889 will improve the outlook. A buy signal was generated on Thursday. The market is in a key time zone for a low. A close over 889 confirms a recovery phase. A close below 865 is needed to take the next leg down.

Agriculture Secretary Sonny Perdue announced the U.S. Department of Agriculture is opening signup for the Conservation Reserve Program (CRP) on December 9, 2019. The deadline for agricultural producers to sign up for general CRP is February 28, 2020, while signup for continuous CRP is ongoing.

The US Meat Export Federation says there’s good news on the horizon for U.S. beef and pork industries now that the partial U.S.-Japan trade agreement has been approved by the Japanese Parliament. USEMF economist Erin Borror says the U.S. is back on a level playing field with its competitors.  “We have been at a significant and growing tariff disadvantage compared to our major competitors in the Japanese market,” she says.  “We had already seen our  market share erode especially on the pork side with these tariff disadvantages.” She tells Brownfield U.S. beef and pork sectors will not only be able to recover some of their lost market share, but capitalize on the growth potential in the Japanese market. Now that tariff rates for the U.S. will mirror those of major competitors, the USMEF forecast that US beef and pork exports to Japan for 2020 to reach $2.3 billion for beef and $1.7 billion for pork. And by 2025, U.S. red meat exports to Japan will approach the $5 billion mark as consumption of U.S. red meat increases because of the greater access for Japanese consumers. (Brownfield Ag)

The United Nations said yesterday that global food prices rose significantly in November, up nearly +10% on the same month last year, pushed up by a combination of rising meat and vegetable oil prices. Between October and November this year, meat prices jumped by +4.6% on the UN Food and Agriculture Organization’s (FAO) meat price index, the biggest month-on-month rise for more than a decade. One reason is China’s increased imports to fill the gap left after losing almost half its pig inventories to African Swine Fever. World food prices rose the most for beef and mutton, the FAO said, buoyed by strong demand for imports, particularly from China as end-of-year festivities approach. Vegetable oils also bumped up global food prices last month. The FAO’s vegetable food oils index was up +10.4% in November, driven in part by Indonesia requiring more biodiesel be blended in with petrol supplies, in turn diverting more palm oil from food to energy.


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