Morning Commentary

July corn down 7 ½ at $3.485

July beans down 22 ¾ at $8.8575

The DOW is weaker

USD is stronger

Crude oil down $99 at $64.86

Good morning,

Corn bears continue to apply pressure as trade tensions escalate. They also continue to point to good rainfall totals in the forecast across a large portion of the U.S. corn belt. The latest USDA crop-condition report continues to confirm one of our best ever starts to a season. . The USDA released their official weekly crop-condition estimates showing a slight overall improvement from 77% to 78% of the crop now rated “Good-to-Excellent” vs. 67% rated “Good-to-Excellent” last year. Corn reported as “emerged” pushed to 98% which is just a hair ahead of our 5-year average of 97% for this time of year.

Soybean traders watch prices in the JUL18 contract tumble to sub-$8.90, a level the market hasn’t seen since March 2016. From a technical perspective, some are saying the low back in November 2015 could be in play just below $8.45 per bushel. New-crop NOV18 prices are down heavily again this morning and now pressuring the $9.00 level. Trade relations with the Chinese and greater uncertainty about NAFTA are clearly creating continued headwinds and extreme pressure. On the flip side, bulls are trying to find anything to stop the bleeding, now pointing to overall U.S. crop-conditons deteriorating a bit. The latest USDA data shows weekly crop-conditions dropping slightly from 74% down to 73% now rated “Good-to-Excellent” compared to 67% rated “Good-to-Excellent” last year at this time. Soybeans reported as “planted” pushed to 97% vs. our 5-year average of 91%. Soybeans reported as “emerged” pushed to 90% which is well ahead of our 5-year average of 81% for this time of year. Bottom-line, the market doesn’t seem all that concerned about deteriorating conditions in the U.S.

High oleic soybean varieties are one of the most recent achievements in U.S. soybean innovation. Projections indicate that high oleic planting in the United States could reach more than 17 million acres in the future, which would make high oleic soybeans the fourth largest row crop in the U.S. Currently, the U.S. doesn’t export high oleic soybeans. High oleic traits have received global regulatory approval, however, nodding at potential demand abroad for this U.S. Soy innovation.

Prior to Bt technologies farmers lost $1 billion annually to corn rootworm—in the form of chemical costs or actual yield loss. With resistance to traits that once killed the pest on the rise, it might just nibble its way back to a billion-dollar price tag. Corn rootworm (CRW) poses a double threat—the adult snips corn silks, and if unchecked could prevent successful pollination and kernel development, and the larvae munch on roots which leads to risk for disease and plant stress. CRW was once controlled by traits but with resistance on the rise is now at risk of running rampant: it’s time to find a solution to slow the spread of resistance.


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