Morning Commentary

Sept corn up 3 ½ at $3.7075

Nov beans up 7 ½ at $8.985

The DOW is up

USD is weaker

Crude oil down $.45 at $69.68

Good morning

Corn prices have pushed to a recent multi-week high. We have pushed to $3.84 overnight vs. the DEC18 contract, with yesterday being the highest close since June 15th. Bulls are pointing to extremely strong U.S. demand and a wide range of yields being reported by early field scouts. There’s also talk that the extended forecast is perhaps a bit more dry and more hot than previously forecast. Weekly export inspection data was once again strong and well above last year. There’s also some talk inside the trade that U.S. exports estimates are moving higher each day as increased rumors and headlines circulate regarding production hiccups in parts of the European Union and Black Sea region. U.S. exports are also being helped by logistical restrictions in parts of South America. Technically the market is still eyeing heavy nearby resistance up closer to $3.90 per bushel. Some are saying the heavier resistance will be up nearer the $4.00 psychological level. Bears are thinking, regardless, it will be difficult to move much beyond these levels on the current headlines. Here at home, the USDA elected to leave U.S. crop-conditions “unchanged”. Despite the overall crop staying at 72% rated “Good-to-Excellent” for the third week in a row, there were many notable downgrades, especially in some large production states: Iowa, Nebraska, North Dakota and Michigan lowered by -1%; Illinois, Missouri, and Wisconsin lowered by -2%; Indiana, and Kansas lowered by -3%; Kentucky lowered -9%; Tennessee lowered -10%. The only states raised higher were: Pennsylvanian +15%; Colorado +6%; South Dakota and Texas +4%; North Carolina +3%; Minnesota +1%.

Soybean prices are higher to start the day, knocking on the door of $9.00 per bushel. Bulls are talking about a little weather uncertainty in parts of the U.S., and continued strength in U.S. demand, despite lack of Chinese buying. The USDA’s most recent weekly export inspections showed +740,000 MT’s for last week, which is up about +50% from last year. Bulls are also talking about Argentine crushers looking to purchase more U.S. soybeans. There’s been some talk inside the trade that Argentina will actually become the world’s second largest importer of soybeans in 2018, behind only China. Technically, the trade continues to believe the $9.00 to $9.20 area will be tougher ground for the bulls to move beyond. Similar to corn, there are some bulls who are surprised to see the crop-condition estimate left “unchanged” on the week at 70% rated “Good-to-Excellent”. States where conditions deteriorated: Tennessee -10%; Louisiana and Missouri -8%; Arkansas and Kentucky -5%; Illinois, Kansas and Ohio -3%; North Dakota and Wisconsin; Minnesota -1%. States where conditions have improved: North Carolina +9%; Mississippi +5%; South Dakota +4%; Michigan +3%; and Iowa +1%.

The national average price for gasoline rose +2 cents over the past week to $2.86 a gallon, according to AAA, reflecting a jump in gasoline demand in the middle of the summer-driving season. Prices are down -1 cent from last month but are up +55 cents from a year ago. Crude oil prices are back above $70 per barrel, up over +16% year-to-date, and up over +40% in the past 12-months. Global supply and demand are expected to remain tight. Global oil demand is expected to average 99.1 million barrels a day this year, but global oil supply stood at 98.8 million barrels a day in June, according to the International Energy Agency. The IEA forecasts that global oil demand will grow to 100.5 million barrels a day in 2019, meaning production needs to stay strong and in fact increase. Despite the recent price pullback, I continue to hear bulls talking about potential $100 crude oil prices. (Source: MarketWatch)

Shares of Tyson fell 7% to a 52-week low Monday after the food company cut its full-year guidance on trade worries related to the Trump administration’s imposition of tariffs and a turbulent commodities market, reports CNBC. The international food company now expects adjusted earnings for fiscal year 2018 at approximately $5.70 to $6.00, down from a range of $6.55 to $6.70. From what I understand, Tyson officials cite the combination of changing global trade policies here and abroad, and the uncertainty of any resolution. (Source: Feed and Grain)

The global artificial intelligence market in agriculture is expected to attain a size of $465.6 million by 2023, according to a new report from P&S Intelligence. Facial recognition technologies form part of this set of technologies, along with sensors, for soil and crop tracking, and the use of drones. The biggest growth area is likely to be with the U.S. Overall, North America is the largest region in the artificial intelligence market in agriculture, with the U.S. alone contributing more than 30 percent of the revenue to the global market. (Source: Digital Journal)


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