Morning Commentary

May corn up 3 ½ at $3.37

May beans up 3 ½ at $8.6225

The DOW is down

USD is stronger

Crude oil up $2.92 at $28.22

Good morning,

Corn bears continue to point towards deep demand concerns tied to ethanol. Not only will U.S. ethanol plants be using a lot less corn, but so will the plants in Brazil. This obviously puts more corn in play in other areas, and as we’ve learned, more available supply general tends to bring about lower prices. Adding fuel to this bearish fire is a strong South American and Ukraine crop and continued talk of +94 million new-crop corn acres possibly being planted here in the U.S. Many bears are thinking the fallout in ethanol demand along with the jump in U.S. acres could push ending stocks over +3.0 billion bushels and send prices sub-$3.00 per bushel.

Soybean bulls continue to point to strong domestic crush demand, good export sales data, and a ton of ongoing uncertainty surrounding Chinese demand and South American logistics. Bears are saying some changes in both Argentina and Brazil regarding corona has eased up transportation restrictions and is again allowing more free movement of soybeans from the fields to exporters or crush facilities. Bears also continue to point towards the massive devaluation of the Brazilian real vs. the U.S. dollar.

China’s main grain supplies are sufficient for domestic demand and will not be in shortage even without any imports, an official from the commerce ministry said on Thursday. China’s ending stocks of wheat, corn and rice in 2019 totaled more than 280 million tonnes, while yearly consumption on average is more than 200 million tonnes, Wang Bin, head of the consumption promotion division at China’s Ministry of Commerce, said. (Source: Reuters

The USDA will pay an annual rent of $55 an acre on land entering the Conservation Reserve through the recently completed signup, a drop of $8 an acre from the last time landowners idled large tracts of land in the reserve. The 2018 farm law set payments at 85 percent of the local rental rate for farmland, and analysts said the lower rates may have discouraged enrollments. The USDA accepted 3.4 million acres in the general signup that ended on Feb. 28. The average rate of $55 for the new land is lower than the average of $63 an acre for land in the previous general enrollment, held in 2016, and $64 for a 2013 general enrollment. (Source: Ag Insider)

Deere & Co. idled production at its Dubuque, Iowa, plant after a worker there tested positive for the new coronavirus. The plant, which makes construction equipment for Deere, is being disinfected during the outage. Deere said a hygiene assessment of the plant is being conducted to improve safeguards and procedures to block the transmission of the virus. Deere said it expects to call back the plant’s 1,000 production workers on a staggered schedule over the next week or two. Deere has maintained production during the coronavirus outbreak as an essential manufacturer of machinery for farm crops and livestock.


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