Morning Commentary

Sept corn up 3 ½ at $3.685

Nov beans down 5 at $8.9675

The DOW is down

USD is stronger

Crude oil down $.35 at $67.31

Good morning,

Corn prices are up a bit this morning, with the DEC18 contract back above $3.80. Prices eased a bit yesterday on renewed worries about trade, a slightly improved and more cooperative U.S. weather forecast, and a pullback in the macro space, i.e. oil prices falling under a little nearby pressure. We continue to hear private traders using corn crop product estimates with a yield averaging between 177 and 180 bushels per acre. Bulls continue to talk about strong U.S. demand for corn. U.S. exports remain robust and demand for U.S. ethanol also remains strong. There’s also a massive livestock herd that is providing strong demand for corn. From a technical perspective, the DEC18 contract has run into stiff nearby resistance up around $3.90. From there the trade sees additional hurdles at the $4.00 and $4.20 range.

Corn numbers saw an increase in both corn used to make ethanol as well as ethanol as a percentage of corn use. The USDA reported that corn consumed to make ethanol and other uses totaled 517 million bushels, up 6% year on year, while ethanol used accounted for 91.2% of total corn use.

Soybean bulls are having to backpedal on new talk out of Washington that President Trump is kicking around the idea of raising the stakes in regard to Chinese trade negotiations. On Tuesday, the trade was overly excited on thoughts that we were reigniting trade talks with Chinese officials. Then on Wednesday, the trade flops and turns over on news that President Trump might raise the 10% tariffs to 25%.. From a technical perspective, the NOV18 contract is still looking at stiff resistance around the $9.20 level. We haven’t been able to rally back and close above this number since June 18th. The next round of resistance is thought to be in the $9.45 to $9.55 range. On the downside, I would like to belie we can hold support in the $8.60 to $8.70 range.

USDA released a new record for the month of June at 169.6 million bushels from last year’s consumption of 148.2. The trade expected 168.8 which suggest the USDA might be understating 2017-2018 crop by 10 million bushels or more.

Through a painstaking process, scientists at Texas A&M have successfully introduced a genetic trait that allows cotton to thrive in soil that has been enriched with phosphate, which has one less oxygen atom than the phosphate used in traditional fertilizers. Because the weeds don’t have the same trait, they are essentially starved of nutrients. Unfortunately, producers can no longer count on spraying fields with the same old herbicides as most weed populations have developed three-way resistance, resulting in over $9 billion being spent each year for a magic bullet. Cotton growers may have a glimmer of hope if the field tests at College Station can transfer to full-scale operations. Kater Hake, vice president of agricultural & environmental research for the industry group Cotton Inc., says this is the “Superman” of weed control and couldn’t come at a better time. Cotton growers in Texas, the nations leading producer of the crop, contribute an estimated $24 billion to the economy and only see that growing as a resurgence for the natural fiber continues to increase, especially in light of its sustainability versus petroleum-based polyester. I’m told the ptxD gene that allows absorption of phosphate was first isolated by William Metcalf of the University of Illinois, then following that, a Mexican research team patented the concept of introducing the gene into plants to make them more competitive against weeds in the field. It’s worth noting the process takes a good bit of time as petri dishes full of cells take an average about 10 months to produce a plantlet. From the plantlet, it can take another year to grow a plant with a root system strong enough to survive in the greenhouse and produce seeds. But now that the greenhouse plants are producing seeds for the next steps, we can expect to validate or not the results soon. Interestingly, the test field was chosen because it is naturally low in phosphorous, as a high-phosphorous field would feed the weeds and defeat the purpose. Also, the discovery brings to light the problem of overuse of phosphorus, which should go dimish if trials are successful. Bottom line – hopes are that farmers will be able to spend less on inputs including fertilizers, herbicides and water otherwise getting “stolen” by the weeds; phosphorous in the form of phosphate will be depleted at a slower rateand less of the nutrient will wash off into waterways, where it contributes to algae blooms plaguing the world’s oceans and great lakes. Another great discovery by researchers! (Source:


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