Morning Commentary

Sept corn up 1 ½ at $3.175

Nov beans up 5 at $8.975

The DOW is down

USD is stronger

Crude oil down $.09 at $40.18

Good morning,

In the last 70 years stocks have been up 38 times and down 32 times in the month of August.  September is exactly the opposite.

Per the WSJ, the FED is going to effectively eliminate the pre-empting of raising rates to reign in inflation.  This is pretty big news in light of the current jump in money supply.

71% of the government debt issued this past year matures in less than 12 months.  Treasury Bills outstanding shot up $5 trillion!  The FED’s balance sheet is about to explode.

Corn bears have been winning the battle as of late with prices down over -30 from the early-July highs. Cooler temperatures and more widespread rainfall has the trade thinking a record-setting U.S. yield is in the bag. Many traders are now taking a 180 to 182 type average. If this plays out we could be looking at a U.S. harvest of +15.2 billion bushels of corn and ending stocks perhaps pushing higher to between +2.75 and 3.0 billion bushels. Obviously, demand will be in question as there’s still a lot of debate and uncertainty surrounding ethanol and exports. Bears worry that corn used for ethanol will again need to be trimmed as U.S. driving demand continues to disappoint. At the same time, there are big debates circulating in regard to ongoing Chinese demand. Bulls are thinking the Chinese need to keep buying to help fulfill their domestic demand to the south. Bears are hesitant in believing the Chinese will be larger buyers of U.S. ag exports as we move closer to the U.S. election. Don’t forget we have the USDA’s monthly supply and demand report scheduled to be released next Wednesday, August 12th. We will also be getting some official “Preventive Plant” numbers.  The trend for Dec corn is negative. The market is poised for a test of 322. Closing over 340 is the minimum needed to improve the outlook.

Soybean bulls hope to continue pointing towards steady Chinese buying and dwindling supply out of South America. The Bears won last week’s battle as prices here at home fell by about -6 cents in total. All it took was a couple of days without Chinese buying headlines and cooperative U.S. weather to bring about talk of a record-setting yield of perhaps +51 bushels per acre. Keep in mind, we are currently looking at one of the best crop-condition ratings on record for the U.S. soybean crop at 72% GD/EX and talks we might improve on the rating this afternoon. In other words, there’s certainly reason to believe and argue the possibility of a record-setting yield. Bulls have to hope the Chinese counterpunch with record-setting U.S, demand. Net-net, it still feels like the U.S. balance sheet will remain in the 375 to 475 million bushel range. In the lowest volume since July 17th, open interest declined 2,000 lots on Friday. The trend for Nov beans is neutral.  Stable action outside 832.75‐897 is needed to provide fresh trending targets

The U.S. Agriculture Department has identified more than a dozen plant species ranging from morning glories to mustard in bags of unsolicited seeds arriving in the mailboxes of thousands of Americans, mostly postmarked from China. While most species identified seem to be innocuous herbs, flowering plants, vegetables or grasses, plant experts warn that seeds from other parts of the world could be non-native varieties that harm commodity crops. Another concern is what appears to be an unknown coating, possibly insecticide or fungicide on the seeds, said Robin Pruisner, state seed control official at the Department of Agriculture and Land Stewardship in Iowa, the top U.S. corn growing state. The Agriculture Department has said the packages are most likely part of a “brushing” scam, in which people receive unsolicited items from a seller who then posts false positive customer reviews to boost sales.

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