Morning Commentary

March corn up ¼ at $3.77

Jan beans up 7 ¾ at $8.9725

The DOW is down

USD is weaker

Crude oil down $.79 at $58.41

Good morning,

Corn  traders will be eager to see the latest harvest progress released this afternoon by the USDA. Last week the U.S. corn harvest was estimated to be 89% complete. Keep in mind, North Dakota was just 36% harvested last week vs. normally being almost completely finished. Michigan and Wisconsin were both only 66% harvested. The USDA’s December Supply and Demand report is scheduled to be released tomorrow. Even though the USDA won’t be updating its production forecast in this report many traders are curious about overall demand? 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.

Soybean traders will be swimming in large waves of headlines this week. We start off tomorrow with the USDA’s December Supply and Demand report. Most inside the trade are looking for very little change to the current balance sheet. This past Friday, the Chinese government announced they were reducing tariffs on U.S. soybean and pork as a gesture of good faith. On the surface, this certainly sounds like a positive step in the right direction, but perhaps the Chinese are simply opening up a window of opportunity for its importers before the next round of U.S. trade tariffs go into effect this coming Sunday, December 15th? The trend for January beans is neutral. Stable trade outside 877.5-902.5 will provide fresh trending targets.

China boosted its soybean production by +13% in 2019 amid a trade war with No. 2 supplier the United States, official data showed on Friday, helping it record a slight rise in total food crop output. Soybean production jumped to 18.1 million metric tons, the National Bureau of Statistics said, with the area devoted to the oilseed rising +11% after Beijing began offering generous subsidies to farmers to grow the beans. Beijing has  sought to promote soybeans along with other higher value cash crops such as rapeseed, peanuts and vegetables, while reducing planting of staple grains like corn, wheat and rice due to surplus production of low quality crops. It is also targeting a reduction of corn and wheat on unsuitable land, such as parts of northern China where groundwater has been overexploited. The area planted with corn fell -2% on the year, but output increased by +1.4% to 260.77 million metric tons. Wheat output rose +1.6% to 133.59 million metric tons, and the bureau said more high-quality wheat has been planted nationwide. Rice output fell by -1.2% over the previous year due to a reduction in planting of low-quality and low-efficiency early rice, with many areas moving to planting just one crop per year. (Source: Reuters)


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