Morning Commentary

Dec corn down ½ at $3.4425

Nov beans down 1 ¾ at $9.135

The DOW is up

USD is weaker

Crude oil down $.16 at $42.73

Good morning,

Corn bulls are looking at headlines that indicate the U.S. crop is encountering some problems and at the same time so are some important areas in Europe and Ukraine. the bulls are mostly focused on the -10% drop in the USDA’s weekly crop condition report for the top producing state of Iowa which fell to 59% rated GD/EX vs. 65% GD/EX last year. The USDA also pushed up the 8% Poor-to-Very Poor rating for Iowa to a much more worrisome 17% of the crop now rated Poor-to-Very Poor. Overall U.S. crop conditions are now down to 69% rated GD/EX vs. 72% rating most of July. The Pro Farmer Crop Tour showed much better yield results than last year for both South Dakota and Ohio, but with the record yield being forecast by the USDA it should be no surprise to the trade. The big wild card remains Iowa, stay tuned and look for more insight on the Wednesday and Thursday leg of the Tour. The trend for Dec corn is positive. The gap from July 10th was filled at 343.75 on Monday. A close over 346.5 is bullish. Closing under 329.5 is negative. Based on the trade count, funds are thought to be short 115,000 corn. Since August 10th, funds have bought an estimated 93,000 corn. Dec corn rose 24 cents over that time span.

Soybeans: In above average volume, open interest rose 7,000 lots on Monday. The trend for Nov beans is positive. Stable trade over 912.5 leaves the market poised for a run to 924.75. Closing below 885 is negative. Based on the trade count, funds are thought to be long 25,000 beans. Since August 10th, funds have bought an estimated 33,000 beans. Nov beans rose 47.75 cents over that time span.

U.S. President Donald Trump on Monday said he approved federal disaster aid for Iowa after a hurricane-force storm hit last week, causing widespread damage in towns and farms and leaving thousands without power. Iowa Governor Kim Reynolds said on Sunday she requested about $4 billion in emergency funds following the Aug. 10 storm. Media reports said the storm caused at least three deaths in Iowa. Winds as high as 100 miles per hour (160 kph) hit eastern Nebraska, Iowa, Wisconsin and parts of Illinois. The storm affected 58,000 holders of crop-insurance policies with a liability of around $6 billion in Iowa, according to the Iowa Soybean Association. U.S. Senator Charles Grassley of Iowa told reporters on Monday that the number of grain bins flattened is “humongous.” It is too early to determine whether there will be enough storage space for the autumn harvest, he said. (Source: Reuters)

China’s chicken producers are pushing ahead with aggressive expansion plans despite a slump in demand due to the coronavirus, reducing reliance on imports amid recent fears about the safety of foreign meat. The world’s No. 2 poultry producer is expected to produce a record 14.85 million metric tons of chicken meat in 2020, according to the USDA, a substantial increase over last year’s +18% rise to 13.75 million metric tons. The significant expansion is boosting demand for key feed grains like corn and soybeans, traders in China say, while pushing down poultry prices. However, the rapid expansion may have been ill-timed, as the COVID-19 epidemic has pummeled China’s chicken demand.

A new multi-state study shows artificial drainage gives soybeans a yield bump. University of Wisconsin soybean specialist Shawn Conley tells Brownfield fields with artificial drainage have improved yields, whether using drain tile or surface drainage. Conley says, “We can get as much as a 4% yield gain in those areas that were tile-drained vs. if they weren’t drained at all.” Conley says he suspects the reason for improved yields might have nothing to do with managing water on a growing crop. “It’s really kind of hard to tell. Is it the drainage part, or is it the fact that farmers can get into that ground up to seven days earlier?” And, he says earlier planting means point-2 to point-5 more bushels per acre per day in additional yield.(Source: Brownfield Ag)

Bitcoin rallied on Monday, advancing past $12,000 to its highest since July 2019. After trading sideways for much of the summer, Bitcoin seems to have re-gained its mojo. And in an environment of ultra-low rates, a number of analysts and crypto fans say Bitcoin — along with other assets such as gold — could potentially act as an inflation hedge, should prices start to rise. At the same time, some Wall Street veterans have taken a greater interest in the coin. Paul Tudor Jones made waves when he said he’s been buying Bitcoin amid central bank money-printing, while Michael Novogratz, founder of Galaxy Digital Holdings, told Bloomberg Television last week that about 25% of his net worth is tied up in the cryptocurrency. Bitcoin’s advance past $12,000 makes it one of the best-performing asset classes this year. It’s gained about 70% since the end of December and is up more than 100% since mid-March, when it briefly traded below $4,000. This year’s surge still leaves it about 40% below the all-time-high of almost $20,000 reached in December 2017.(Source: Bloomberg)


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