Morning Commentary

Sept corn up ¾ at $3.715

Nov beans up 3 ½ at $9.0925

The DOW is down

USD is stronger

Crude oil down $1.00 at $68.17

Good morning,

Corn continues to consolidate, with the DEC18 contract seeming comfortable trading between $3.80 and $3.90 per bushel, at least ahead of Friday’s August USDA report and the uncertainty still surrounding trade negotiations and the U.S. yield. Most inside the market are thinking the USDA will be pushing yield higher from 174 to 176 bushels per acre. Bears believe the yield ultimately ends up closer to the 180 level, while bulls are thinking the crop eventually disappoints once it starts to come out of the field.

Soybean bulls are happy to see prices again slightly higher, stabilizing and finding support at or above $9.00 vs. the NOV18 contract. Nearby technical resistance is seen in the $9.20 to $9.25 range. A close above that area opens the door to $9.50. There seems to be more talk circulating that China will have little choice but to import U.S. soybeans sooner rather than later. There’s also more talk that heavier Chinese buying of meal from Argentina, will eventually force Argentine crushers to source more soybeans from the U.S. In other words the “demand” story is slowly swinging back towards the bulls. U.S. production is still somewhat of a wild-card, but most inside the market are forecasting a jump in yield by the USDA in their Friday report. The USDA currently has the yield forecast at 48.5 bushels per acre. Based on weather and overall growing conditions, most believe that number is going to push higher by perhaps +1.0 bushels per acre. There’s actually some inside the trade who believe the USDA is ultimately moving the yield north of +50 bushels per acre. In the process, U.S. new-crop ending stocks will probably again push higher from the current 580 million to over 630 million, a jump of +50 million bushels on increased production.

Government data released August 3 show that U.S. ethanol exports through June stood at 927.7 million gallons, up 33% from the first half of 2017 and on pace to shatter last year’s record of 1.38 billion gallons. Brazil had been the leading market for U.S. ethanol exports, receiving 345.9 million gallons, about 37% of total shipments. Canada has been the second-leading export market, with 159.5 million gallons of U.S. ethanol flowing north of the border in the first six months of the year. That is up 8% from a year ago. (Source: RFA)

U.S. trade officials have agreed to allow commercial imports of U.S. poultry meat and products into Morocco for the first time. Initial estimates indicate Morocco could be a $10 million market, with additional growth over time. Morocco had prohibited imports of U.S. poultry until now. The U.S. is the world’s second largest poultry exporters, with global sales of poultry meat and products of $4.3 billion last year. (Source: USDA)

A Brazilian judge has suspended the use of products containing the agrochemical glyphosate. The judge ruled the new products containing glyphosate could not be registered in the country and existing registrations would be suspended within the next 30 days, until the government reevaluates their toxicity. The decision also applies to the insecticide abamectin and the fungicide thiram, could be subject to multiple appeals. This ruling very clearly will affect widely planted glyphosate-resistant soybeans from Monsanto. This news brings up tons of questions on what this means to the world’s largest exporter of soybeans. We will keep you posted as this situation unfolds. (Source: Bloomberg)

A ship with U.S. soybeans set sail for China last week, according to data released Monday, showing that the Asian nation is still importing some quantities of the commodity grown in America despite tariffs imposed by the government in July. Bloomberg reports a bulk carrier departed Gavilon Group LLC’s export terminal in Kalama, WA, for Shanghai on July 29, carrying the first cargo of American soybeans destined for China in three weeks, according to a reportpublished by the U.S. Department of Agriculture.


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