Morning Commentary

Sept corn down 2 ¼ at $3.70

Nov beans down 15 at $9.04

The DOW is down

USD is stronger

Crude oil down $1.08 at $67.68

Good morning,

Corn prices are weaker to start the morning. Bulls are talking about improved trade talks involving NAFTA and perhaps steps in the right direction between the U.S. and China. Bulls are also building a case for a few production setbacks in areas of the U.S.. Iowa producers are talking about temperatures next week that could exceed 100 degrees along with multiple days of extreme nighttime heat. There’s also talk that the funds might be moving from a net-short to a more flat position ahead of the upcoming August USDA “Supply and Demand” report. The big wild-cards in the report will obviously be the latest USDA export estimate and the USDA first survey based corn yield estimate. With both numbers capable of a large deviation from their current estimates, traders might be a bit hesitant to hold large open positions.

Soybean traders are talking about the market having to perhaps back-and-fill a bit here, following yesterday’s strong gains. Bulls are still talking about rumors that the U.S. and China might be moving a bit closer to restarting trade talks. I’ve personally heard no specifics, other than the fact representatives of Treasury Secretary Steve Mnuchin and Chinese Vice Premier Liu He were working toward a restart of some sort. Demand for U.S. soybeans remain strong and bears continue to backpedal. From a technical perspective, the new-crop NOV18 contract didn’t even seem to flinch at the $9.00 level. It also traded beyond the 38% Fibonacci number and is now eye-balling the $9.40 to $9.50 area to the upside.

Chinese purchases of soybeans have slowed significantly, according to market sources, as a weaker Chinese yuan has driven up the cost of importing soybeans that are traded in dollars and turned crush margins negative. China’s central bank has allowed its currency to drift 8% since mid-February to 6.8 versus the dollar in a bid to help industrial exporters hit by the US-China trade spat. However, it has had the opposite effect on China’s crushing industry. (Source: Agricensus)

Sales of plant-based foods developed to directly replace animal products like dairy, meat and eggs rose by more than 20 percent in one year, topping $3.3 billion in revenue, according to a new report from Nielsen that was commissioned by the Plant Based Foods Association. Milk alternatives, including almond and soy beverages, accounted for more than half of those sales and had a 9 percent growth rate over the year before.


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