Morning Commentary

May corn down ¼ at $3.81

May beans up 3 ½ at $9.07

The DOW is up

USD is stronger

Crude oil up $.91 at $48.09

 Good morning,

Corn bulls are pointing to rumors of Chinese buying interest, dry and warmer conditions in parts of Argentina, export tariffs perhaps being raised higher in Argentina, some weather uncertainties brewing with second-crop corn acres in parts of Brazil, a recently weaker U.S. dollar, and overly wet fields in some key U.S. locations. Bears point to continued uncertainty in China, good conditions in Ukraine, a strong South American crop, a big anticipated jump in U.S. acres, and ongoing uncertainty regarding U.S. export and ethanol demand.  Bears are pointing to the quick planting pace happening down in Texas where producers have almost 15% of its corn crop planted. The short term trend for May corn is neutral. Stable action outside 372.75-386 will provide fresh trending targets. Funds

Soybean bulls are pointing to rising export tariffs for Argentine “soybeans, meal and bean oil”. There are also some logistical complications brewing in portions of Bazil that we are closely monitoring. This time period between more readily available South American supply might provide a little opportunity for U.S. soybeans. China is still booking a lot of soybean from Brazil and U.S. suppliers aren’t competitive for several more months. In other words, China seems comfortable buying from SAM suppliers but that could change for spot deliveries if ports and logistics become more complicated.

Argentina is expected to raise taxes on soybean exports to 33% from the current 30%, a spokesman for the CRA confederation of farmers said on Tuesday following a meeting with government officials. A spokesman for Argentina’s Ministry of Agriculture could not be immediately reached for comment. A government decree providing details of the new tax policy was expected to be published on Wednesday, Gustavo Idigoras, head of grain exporters and processors chamber CIARA-CEC, told Reuters. The ministry had suspended on Feb. 26 the registration of agricultural exports until further notice in a move that traders said likely foreshadowed an increase in grains export taxes. (Source: Reuters)

China’s Harbin Veterinary Research Institute, the country’s top research body on animal diseases, says it has developed an African swine fever vaccine that laboratory testing has showed is safe and effective. The disease first broke out in China in 2018. Since then, hog herds in the world’s top consumer and producer of pork have fallen by nearly half as global researchers looked to develop the world’s first African swine fever vaccine. Earlier this year, the American Society for Microbiology said US government and academic experts developed a vaccine against swine fever that proved 100 per cent effective. Although it shows promise, the American vaccine is still some years away from being available to farmers, experts said in January.

Farmers in south-central Brazil had planted 67% of their total projected area for the 2020 second corn crop as of Feb 27, compared to 51% a week ago, 79% in the same period last year and 63% on the five-year average. In other states, farmers have been planting at full steam since last week, but they still lag behind due to the delayed soybean crop. In western Paraná and southwestern Goiás, the ideal planting window is already closed, but farmers will have to continue planting until around Mar 10. In northern Paraná, eastern Goiás and in the states of Mato Grosso do Sul, São Paulo and Minas Gerais, where the ideal window ends on Mar 10 or Mar 15, planting activities are expected to continue until late March or even early April. This late planting makes the crop more susceptible to yield losses caused by dryness and/or freezing temperatures during pollination and grain filling. Weather forecasts showing predominantly dry conditions in Paraná, Mato Grosso do Sul, São Paulo and Minas Gerais in March might add extra drama to an already complicated season. Despite the delay, Brazil is likely to plant a larger area this season, spurred by strong domestic prices. (Source: AgRural)

Makers of plant-based meat alternatives are cutting prices, as startups compete with food-industry giants for slices of the rapidly growing market. Impossible Foods Inc. said Tuesday that it had reduced wholesale prices for its products by -15%, which Impossible says reduces the price to about $7.90-$8.50 a pound. Big food companies—including Nestlé SA, Smithfield Foods Inc., Cargill Inc. and food distributor Sysco Corp. —have recently set plans to introduce their own meat-free patties, sometimes at lower prices than those charged by startups. Plant-based meat sales in U.S. retail stores totaled a little over $1 billion for the 52 weeks ended Jan. 25, according to Nielsen, up +14% from the prior year. Sales of traditional meat grew +0.8% to $96 billion over that period. The plant-based production processes are more expensive than traditional burger making but both Impossible and Beyond say they are working to change that dynamic by adding more manufacturing plants and making their processing techniques more efficient. Beyond has resisted broadly discounting its burgers, but the company aspires to match the price of traditional meat with at least one of its products by 2024.(Source: WSJ)


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