Morning Commentary

Dec corn down 1 ½ at $3.77

Nov beans down 4 ¼ at $10.3925

The DOW is down

USD is stronger

Crude oil down $1.07 at $40.04

Good morning,

Corn bulls will be trying to add on to last weeks +10 cent gain and six month high in price. The hope is that Chinese demand remains strong and upcoming South American weather a bit uncertain. Bears are pointing to great weather coming up for the U.S. harvest and early yields out the fields perhaps a bit better than expected. With little in the way of new oil exploration and a ton of capacity offline, perhaps the oil market is caught a bit offsides and we see an increase in ethanol demand. If production out of the fields here at home is better than forecast and upcoming South American weather seen as more cooperative prices could pull back a bit. Bears think total U.S. production could be a bit higher than the current USDA forecast. In the latest report, the USDA lowered its U.S. production estimate by -378 million bushels to 14.9 billion on a reduction in yield from 181.8 down to 178.5 bushels per acre. Remember, they also reduced harvested acres from 84 down to 83.5 million acres. Since August 28th, open interest has risen 128,000 lots and Dec futures added 19 cents. The trend for Dec corn is positive. Stable action over 380 will support a drive to 400. Closing under 361.75 cautions for a corrective phase.

Soybeans prices jumped +47 cents higher last week as funds increase their net long position to what is believed to be over +200,000 contracts. Bulls believe Chinese demand will remain strong and the U.S. balance sheet will continue to shrink into the yearend report. The USDA reduced their ending stock estimate by -112 million bushels in the last report as they reduced the average yield by -1.4 bushels per acre from 53.3 down to 51.9. Technically, this is the highest price we’ve seen in the front-end of the market since May 2018. In February 2018 we traded to $10.71 and in January of 2017, we traded to $10.80 per bushel. The highest front-end print in the past five years is $12.08^4 back in June 2016. Total open interest is at its highest level since April 2018. The trend for Nov beans is positive. Stable action over 1045 should fuel a run to 1100. Closing below 1008.5 alerts for a correction.

USDA’s Farm Service Agency (FSA) reminds farm owners that they have a one-time opportunity to update Price Loss Coverage (PLC) program yields for covered commodities on the farm. The deadline is Sept. 30, to update yields, which are used to calculate the PLC payments for 2020 through 2023. Additionally, producers who elected Agriculture Risk Coverage (ARC) should also consider updating their yields.

Sign-ups begin today for a new round of coronavirus aid to producers for as much as $14 billion, which the USDA detailed on Friday. The announcement came after President Donald Trump talked about the aid package at a campaign rally Thursday evening in Wisconsin. The president said his administration was providing an additional $13 billion to producers. The USDA announcement Friday was $1 billion higher than the president said at his rally. USDA said signup for the new Coronavirus Food Assistance Program (CFAP 2) would begin Sept. 21. Applications will be accepted through Dec. 11, 2020. The first CFAP package for coronavirus-related losses before April 15 has paid out $9.9 billion to 621,919 farmers, as of the latest payment update. Cattle, dairy, corn, hogs and soybeans are the main aid recipients. USDA had projected spending $16 billion for the CFAP.

The administrator of the U.S. Environmental Protection announced Friday a step on the road to re-registration of the herbicide atrazine. The announcement by Andrew Wheeler, that the agency has given interim approval to the re-registration of the triazine class of herbicides, is seen as good news for corn farmers. “The next option up if we couldn’t use atrazine is probably between $30 and $60 an acre more,” said Mike Moreland, president of the Missouri Corn Growers Association and a farmer in western Missouri, “And with today’s tight margins that would break a lot of farmers.” Wheeler, who made the announcement at a farm in southwest Missouri, tells Brownfield there’s another step before full approval is given for re-registration. “We still have the biological decision we have to make as far as the Endangered Species Act is concerned,” Wheeler told Brownfield following the announcement, “but at this point, we don’t see any problems with moving forward on atrazine.” (Source: Brownfield Ag)


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