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Morning Commentary

July corn down 1 ½ at $3.17

July beans up 1 ¾ at $8.5675

The DOW is up

USD is weaker

Crude oil up $1.41 at $25.53

Good morning,

Corn bears are eager to see just how “over-supplied” the USDA’s new-crop balance sheet will be in today’s highly anticipated supply and demand report. Not only are old-crop stocks expected to dramatically increase on a major reduction in overall demand, but new-crop stocks are expected to be +3.1 billion bushels as cooperative weather more than likely allows for +95 million U.S. new-crop corn acres. Bears are also pointing to an amazingly fast start to U.S. planting for our top producing states and improved moisture for many second-crop acres in Brazil. Here at home we now have 67% of the new acres planted vs. 56% historically.  Iowa is thought to be +91% planted vs. less than 48% last year vs. just 66% on average.

Soybean traders are debating what could be an expanding old-crop balance sheet vs. a tightening new-crop balance sheet. The USDA showed 38% of the U.S. soybean crop is now planted vs. 23% on average. Similar to corn, big production states are off to a very quick pace. Iowa is 71% planted vs. less than 13% last year vs. 24% on average.

More hawkish voices have emerged within China on the phase one trade deal with Washington, with some calling for new negotiations and a tit-for-tat approach on spiraling trade issues, after US’ malicious attacks on China ignited a tsunami of anger among Chinese trade insiders, the Global Times learned from sources close to the Chinese government. Inside China, dissatisfaction with the phase one agreement has been growing because China has made compromises for the deal to press ahead. In the past, some trade negotiators believed that it would be worthwhile to make certain compromise to reach a partial truce in the 22-month trade war and ease escalating tensions. However, given recent anti-China rhetoric in the U.S.,  advisors close to the trade talks have suggested Chinese officials rekindling the possibility of invalidating the trade pact and negotiating a new one to tilt the scales more to the Chinese side, sources close to the matter told the Global Times.

 

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