Morning Commentary

Sept corn up 1 ½ at $.30975

Nov beans up 1 at $8.8275

The DOW is up

USD is weaker

Crude oil up $1.34 at $43.04

Good morning,

-Beirut’s explosion was caused by 2750 tons of ammonium nitrate left unsecured in a port facility for six years.

-Gold is racing towards $3000 an oz and the VIX is at a post pandemic low.

-The spread between volatility futures two months out vs the nearby is at an eight year high indicating potential August downdrafts in the S&P.  No sell signal yet.

Corn bears have pressured prices to fresh new contract lows, something we have been concerned about for weeks. From a technical perspective, the DEC20 contract looks terrible for the bulls. The contract traded down to a new low of $3.20 and despite the possibility of a nearby bounce on short-side profit-taking, many inside the trade believe the bears may have enough momentum and cooperative weather in the forecast to test the $3.00 level. The trend for Dec corn is negative.  Stable trade over 330.75 is the minimum needed to improve the outlook.

Soybean bears have now trimmed about -30 cents off the highs posted about a month ago as U.S. crop conditions are some of the best we have seen reported in over +25 years. More traders are talking about the possibility of a sizeable jump in the USDA average yield estimate and the very strong chance of new record being harvested. At the same time, we are also now hearing more forecasts and estimates that South American producers are going to increase soybean acres next year. Bulls are also a little more nervous as President Trump tightens the hold on Chinese businesses like TikTok and Huawei. The obvious worry is that things get more heated between the global powers and eventually China pulls back on U.S. ag purchases.

Farm groups are arguing for a massive new round of cash for agriculture in the coronavirus relief bill being negotiated by Congress and the White House, even though billions of dollars in an ongoing USDA aid program may go unclaimed. There’s no contradiction in the request, said the two largest U.S. farm groups. “There’s ample reason to believe that family farmers and ranchers will need additional support in the coming months to withstand the financial impacts of the pandemic,” said Mike Stranz, a vice president at the National Farmers Union. Stranz and Terri Moore, a vice president at the American Farm Bureau Federation, said the unexpectedly slow rate of payments from a $16 billion coronavirus fund at the USDA was a poor gauge of conditions in farm country. “We believe a combination of factors are contributing to the unallocated dollars — lack of need is not one of them,” said Moore. Stranz and Moore said quirks and glitches in CFAP may limit the program’s reach.(Ag Insider)

The EPA is proposing to register a new contact herbicide to help manage weed resistance. Tiafenacil is proposed for pre-plant and pre-emergence burndown use in corn, cotton, soybeans and wheat and post-emergence burndown in grapes as well as fallow and non-crop areas. EPA expects the herbicide to be useful for herbicide resistance management as it provides an alternative for controlling glyphosate-resistant palmer amaranth, marestail, and waterhemp. The agency has not identified any dietary, residential, aggregate, or occupational risk of concern for human health. Public comment on the proposed decision is open until August 30th. (Source: Brownfield Ag)


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