Morning Commentary

March corn up ¼ at $3.76

Jan beans up 4 at $9.0125

The DOW is down

USD is weaker

Crude oil down $.08 at $58.94

Good morning,

Corn  traders are digesting the final USDA weekly crop progress update. Yesterday’s data showed the U.S. crop just 92% harvested, up only +3% from the previous week, and well below the 5-year average of 100% complete by this date. Bulls argue there’s still 6 to 7 million acres of corn unharvested in states like North Dakota just 43% complete, Michigan and Wisconsin just 74% complete, South Dakota 83% complete, Minnesota and Ohio 93% complete. 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 bulls are talking about Chinese importers buying a few more cargos of U.S. beans since reducing its tariffs late last week. There’s also headlines circulating that China’s hog population was up +2% compared to October, the first monthly increase in some time. Bulls are also pointing to the fact China imported 8.28 MMTs of soybeans in November, up +50% from the same month a year ago. The USDA is scheduled to release its December Supply and Demand report today at 11:00 am CST. Most inside the trade are looking for very little if any change to the bottom line. The trend for January beans is neutral. Stable trade outside 889.5-902.5 will provide fresh trending targets. Based on the trade count, funds are thought to be short 73,000 lots.

Chinese soy importers on Monday bought at least five bulk cargo shipments of U.S. soybeans, or about 300,000 metric tons, for shipment in January and February after Beijing offered the buyers at least 1 million tonnes in new tariff waivers, U.S. exporters said. The fresh allotment of tariff waivers, which exempts importers from 30% tariffs on U.S. shipments, comes after buyers used up nearly all of the 10 million metric tons in waivers awarded by Beijing in October. Monday’s purchases, the largest in at least two weeks, according to U.S. Department of Agriculture (USDA) data, came ahead of a Dec. 15 deadline, when U.S. President Donald Trump has said he would impose a new round of tariffs on Chinese goods. China said on Monday that it hoped to make a trade deal with the United States as soon as possible, before the new tariffs kick in. (Source: Reuters)

Recent data shows the U.S. exported 520.9 million pounds of pork in October, which was the most ever for the month and up +18 million pounds from last year.  We should note, exports to China were up +375% compared to the year-earlier. On the flip side, U.S. pork exports to Mexico, Japan and South Korea were all down.

U.S. Beef Exports Disappoint: U.S. beef exports in October were reported at 248.6 million pounds, down about -9.0% compared to last year.  Exports to our top-five markets were all lower when compared to last year. 

Vietnam is considering cutting tariffs on several American products, the Ministry of Finance said in a statement on Monday. Tariffs on chicken and processed chicken meat, almonds, grapes, wheat, pork, and potatoes are all earmarked for reductions, in order re-balance bilateral trade, the ministry said in a statement on its website. Vietnam has emerged as one of the largest beneficiaries of the trade spat between Washington and Beijing but it is concerned that it could be U.S. President Donald Trump’s next target. Vietnam’s trade surplus with the United States hit $38.4 billion in the first 10 months of 2019, up 33.66% from a year ago, customs data showed. (Reuters)


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