Morning Commentary

Sept corn up 1 ½ at $3.0925

Nov beans down ½ at $8.67

The DOW is up

USD is stronger

Crude oil up $.52 at $41.74

Good morning,

Corn bears remain in control, while the past few weeks have been rough for the bulls. The DEC20 contract has fallen by more than -40 cents from the early-July highs as more talk circulates around a record U.S. yield. The trade is thinking the USDA could add another +150 million bushels to U.S. production in Wednesday’s report as the average yield estimates push north of +180 bushels per acre. Demand still seems somewhat mixed as bulls point to Chinese buying and bears point to ongoing ethanol uncertainties. The trend for Dec corn is negative. Consistent trade below channel support at 320 signals a washout to 300. Stable trade over 330.75 is the minimum needed to improve the outlook.

Soybean bears were able to trim another -25 cents off of price last week and the NOV20 contract is now down about -50 cents from the recent early-July highs. Similar to corn, the market seems most heavily focused on U.S. weather and yield, and those headlines have been mostly bearish the past few weeks. The trade seems to be thinking the USDA will increase U.S. production by +100 million bushels on the likelihood of a fresh new record all-time yield. The USDA’s weekly crop condition rating of 73% GD/EX is one of the best we have seen in the past 25 years so the trade is trying to digest increased U.S. production on an average yield forecast between 51 and 54 bushels per acre. The trend for Nov beans is negative. The market poised for a test of key 862 support.  Closing over 887 is needed to improve the outlook.

Twenty-eight farm groups asked the U.S. Department of Agriculture on Friday to extend the deadline for farmers to apply for coronavirus assistance payments and try harder to reach more growers hurt by the pandemic. The American Farm Bureau Federation, with organizations representing producers of goods ranging from apples to cotton and cattle, said in a letter that USDA’s Aug. 28 deadline may prevent farmers from participating in the $16 billion aid program. “We strongly encourage you to increase producer and stakeholder engagement initiatives,” the groups told U.S. Agriculture Secretary Sonny Perdue. Participation rates are “egregiously low” among producers of fruits and vegetables, the letter pointed out. Many produce growers have less experience working with USDA than producers of major commodity crops like corn and livestock. Another limiting factor is that payments to growers of many fruits and vegetables are based on the volume of crops sold from Jan. 15 to April 15, when some are out of season. The farm groups asked USDA to review its eligibility criteria including sales dates.(Reuters)

The U.S. Department of Agriculture (USDA) last week announced a new annual survey of farmers, ranchers and private forestland owners. The survey will help USDA understand what it is doing well and where improvements are needed, specifically at the Farm Service Agency (FSA), Natural Resources Conservation Service (NRCS) and Risk Management Agency (RMA). The survey consists of 20 questions and takes approximately 10 minutes to complete. Responses are confidential, and individual responses will be aggregated. The survey will be open for at least six weeks and will be closed once USDA receives a 30% response rate.

Iowa State University Extension economist Lee Schulz says the number of hogs and pigs that were euthanized because of COVID-19-related processing slowdowns appears to be much lower than originally anticipated. “We have to credit the producers and the entire supply chain of acting very quickly in slowing down hogs and adjusting diets, etc.,” he says.  “All of those management practices really helped the industry to deal with this situation.” And, he tells Brownfield, he doesn’t anticipate in major disruptions down the road.  “What we did was we pushed those hogs into those lighter-weight categories because we slowed down the growth of those hogs,” he says.  “I think that should help to spread out some of that production.” Schulz says the March-May pig crop was above year-ago levels, which potentially adds more pork into the production system by the first quarter of 2021.


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