Morning Commentary

Sept corn up ½ at $3.7025

Nov beans down 10 ½ at $8.9175

The DOW is up

USD is stronger

Crude oil up $.71 at $69.20

Good morning,

Corn traders are bracing for what could be a volatile week. Not only are political trade headlines swirling, but we also have the August USDA report scheduled for release on Friday. Bulls could have a bit of an edge early in the week as there’s been some good news surrounding NAFTA, with talks that the U.S. and Mexico are hoping to have things hammered out by the end of August. There’s also more talk of dry weather impacting corn and soybean production in parts of China, particularly the southern portions of northeast China and portions of the North China Plain. Traders later in the week will become more anxious and interested in seeing how the USDA adjusts their current 174 yield forecast and total export estimate. A couple of well known industry firms released updated yield estimates late last week, bumping their forecasts higher to between 176 and 178.1 bushels per acre. With crop-condition rating looking as if it’s going to stay above +70% “Good-to-Excellent”, it’s hard to imagine the total yield going anywhere but higher. From a technical perspective, the bulls will be trying to take out last weeks high of $3.88^4. On the downside, bulls are hoping last weeks low was $3.77^4 will hold as support. Longer-term, the $3.90 to $4.10 area still looks like more heavy resistance.

Soybean bulls are hoping to find some renewed momentum to take out last weeks high of $9.22^2. We made the push on what was perceived to be improved trade talks with the Chinese. Those headlines were then “Trumped” by talks out of Washington that we could be raising the stakes by increasing tariffs form 10% to 25% on an additional $200 billion of Chinese imports. The market seems comfortable hovering around the $9.00 level until more is known about Washington and U.S. weather. The USDA report coming out on Friday  could also bring some additional insight and volatility. Bears want to argue that U.S. yields are moving higher, while the bulls argue that a decline in Chinese shipments have been more than offset by an increase in demand from other nations. Regardless, it’s nice to see the market has recovered substantially from the near 10-year low posted back in mid-July at $8.10^4 per bushel.

Reducing market access barriers is a critical element of the councils trip to Vietnam and Indonesia. The Indonesian government has had an ethanol policy in place since 2006, but the mandate has largely gone unmet. Indonesia currently imports half of its gasoline demand, and the government has set a goal for renewables to represent 23 percent of the country’s energy mix by 2025 and to reduce greenhouse gas emissions by 29 percent by 2030. Vietnam started offering E5 on Jan. 1, 2018, with a goal to move to E10 by 2020, as total gasoline consumption rates are expected to grow by nearly 10 percent annually. (Source HighPlainsJournal)

Brazilian ethanol imports recovered in July, surging to 142.45 million liters from 68.77 million liters in June, and were also 93% higher year on year, Secretariat of Foreign Trade data showed Friday. Imports in the first seven months of 2018 totaled 1.36 billion liters, down 0.45% year on year, the data show. (Source SPGlobal)

Soil Health Partnership, a program launched by the National Corn Growers Association in 2014 is catching on as more farmers are getting results. The organization helps farmers do economic assessments to understand where the farmer is making or losing money. Together, they consider today’s technology, weather and markets to decide on methods that will improve the soil, help the environment and also make the farm more profitable.  Read more HERE what producers in the midwest are doing and the results they are seeing.


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