News

Morning Commentary

Sept corn up 3 ½ at $3.65

Nov beans up 17 at $8.86

The DOW is up

USD is weaker

Crude oil up $.25 at $65.26

Good morning,

Van Trump says “Corn traders continue to juggle debates about strong demand both globally and domestically, against what appears to be mostly cooperating U.S. weather and talk of a record setting yield. Bears continue to point to the old adage that big crops tend to get bigger. Bears are also saying U.S. producers are talking about planting more corn acres in 2019. We’ve had a couple of larger retailers tell us many folks are talking about more corn acres next season. Some early forecasts are talking as much as +95 million planted corn acres in 2019. That would obviously put a damper on the upside. I personally contend it’s way too early to be talking 2019 acres, and I really don’t see the banks expanding lines of credit to allow +95 million U.S. corn acres next year. I know many producer who still have unsold old crop bushels and next to nothing sold for 2018. They are obviously holding out for much higher prices, something I’m afraid we might not see for several more weeks. As I’ve said the past few days, it feels like the trade just wants to slosh around somewhere between $3.50 and $4.00. Bulls are afraid of a global economic slowdown, the U.S. dollar strength is a headwind, crude oil prices have backpedaled significantly, copper is now down almost -25% on the year, gold down -11%, silver down -16%.”

Soybean prices are higher to start the morning. There was some talk overnight that China and the U.S. reached a modest breakthrough in their standoff over trade, saying they will hold lower-level talks later this month on the spiraling dispute. China’s Commerce Ministry said a vice minister will travel to the U.S. at an unspecified date, at the invitation of the Treasury Department, to discuss trade issues. The new round of discussions would be the first since May. Traders yesterday were talking about possible production hiccups in some southern areas of the U.S. and the fact Argentina has decided to suspend their export tax reductions on both meal and oil for six months. With the Argentine peso falling to a new all-time low and their interest rates being bumped to 45%, the government needs the tax income. Demand remains strong, and yesterday’s NOPA crush numbers did nothing but further confirm that fact. The monthly crush report, showed the soybean crush at a new record for July at 167.73 million bushels, which was well above most trade estimates. This was also well above last months 159.228 million bushels crushed. And massively above last year’s July crush at 144.718 million bushels.

Last month, President Trump announced they would try and ease some of farmers’ financial fears through a $12 billion emergency aid package. Of course, we have very few details on how this will work. Univ. of Missouri’s Food and Ag Policy Research Institute is analyzing what little details we have. Pat Westhoff, director of FAPRI is anticipating soybean payment stocks range from 25 cents per bushel to no more than $1 per bushel. OF course, these are just estimates. (Source: FAPRI)

Ethanol production on the week was down to 1.072 million bpd, but weekly production is up +1.2% from last year. Stocks are up 5.4% from last year at 23.0 million barrels. The 5.286 billion bushels of corn used for ethanol is exceeding the pace to reach the USDA’s estimate of 5.625 billion bushels.

According to the latest AEM Flash Report, July resulted in the second month in a row where all equipment categories tracked had positive sale year-to-date. Year-to-date combine sales are up 23.7%, and comparing July 2018 to July 2017 combine sales were up 37.2%. So far in 2018, four-wheel-drive tractor sales are up 12.7% compared with 2017. Since 2017, we have seen a soft-upward movement for larger production ag equipment such as 100+HP 2WD tractors, 4WD tractors and self-propelled combines. Ssource: AEM)

If you remember back to last July, Adidas — parent company to Reebok — announced their commitment to use only recycled plastics in the production of its shoes and sportswear lines by 2024. Now Reebok has announced a new shoe called “Cotton + Corn” which are made up of a 100% cotton upper and a bio-based sole made from a corn-based plastic. The insole is made from castor bean oil, and the packaging is made from recycled materials. They are the first-ever “75% USDA certified bio-based shoe.” (Source: CBS News)

 

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