Morning Commentary

Dec corn up 2 at $3.6225

Nov beans up 1 at $9.7975

The DOW is up

USD is weaker

Crude oil down $.57 at $37.48

Good morning,

Corn bulls remain hopeful… waiting for the USDA to dramatically lower total U.S. production. Remember, this will be the first one this year that uses actual field surveys. The average trade estimate is looking for a yield of 178.4 bushels per acre vs. the current USDA estimate of 181.8. Perhaps a bigger question will be the USDA’s current view of “harvested acres”? Currently, the USDA is using 84 million harvested but there’s talk that number could ultimately be trimmed by -1 to -2 million by year-end. On the demand side of the balance sheet, most all are in agreement that corn used for ethanol will be trimmed and exports bumped higher. Bears want to argue that feed and residual will be reduced while bulls think it could be stronger than forecast. The trend for Dec corn is positive. A close over 363 will support a drive to 376, perhaps the low‐380 area. Closing under 347.75 confirms a correction phase. Based on the trade count, funds are thought to be short 22,000 corn as of today.

Soybean traders are eagerly waiting on tomorrow’s USDA numbers scheduled to be released at 11:00 am CST. The trade is thinking the USDA will reduce its yield estimate from 53.3 down to 51.7 bushels per acre. . The USDA had ending stocks forecast at 610 million but the trade is now thinking more like 470 million, which makes the market much more interesting. In below average volume, open interest surged 13,000 lots. Gains were led by Nov through March. The trend for Nov beans is positive. Stable action over 975 should fuel a run to 997. Closing below 957.5 alerts for a correction.  Based on the trade count, funds are thought to be long 153,000 beans.

Trump administration officials have told ethanol advocates the government will reject requests by refineries to be waived from renewable fuel-usage requirements. The Environmental Protection Agency could reject as many as 67 of those retroactive waiver requests as soon as this week, according to four people familiar with the matter who asked not to be named prior to an announcement. Refineries filed dozens of applications with the EPA seeking retroactive waivers from the biofuel-blending requirements dating back to 2011. The tactic followed a January federal court ruling that said the relief was limited to facilities that have consistently received exemptions. Administration officials have not yet decided whether to reject a separate 28 pending requests tied to 2019 biofuel quotas, two of the people said.(Bloomberg)

A three-year fuel pump infrastructure program lead by the National Corn Growers Association has delivered 50,000 fuel pumps across the country that support higher octane fuels. NCGA President Kevin Ross tells Brownfield they worked with Wayne Fueling Systems to produce and sell the pumps that pump a blend up to E25. “That was a really fantastic opportunity for us not just right now with E10-E15 usage levels but really moving into the higher-level blends that we would like to get to down the road. 50,000 fuel pumps, that is a big deal right there.” NCGA has also partnered with the Renewable fuels Association to help retailers apply for the USDA’s Higher Blends Infrastructure Incentive Program which includes $86 million to expand the availability of higher blends like E15 and E85. So far, those efforts have reached applicants representing more than 1100 fuel dispensers across 21 states. NCGA Market Development Vice President Jim Bauman says if the US were to move to a higher octane, mid-level blend of ethanol long-term it could create 5 billion gallons of new ethanol demand, equivalent to 1.8 billion bushels of corn annually. (Source: Brownfield Ag)


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