Morning Commentary

Sept corn up ¼ at $3.47

Nov beans up 3 at $8.57

The DOW is up

USD is weaker

Crude oil up $.80 at $68.63

Good morning,

In case you missed it, the Pro Farmer Crop Tour guys say the Luverne area will yield 214 bpa.  Are we taking the over or under on that?

Corn prices have tumbled by almost -20 cents this week as the trade digests more talk and confirmation of a record yield.  The Pro Farmer Crop tour released results for both Minnesota and Iowa last night. Minnesota’s yield was forecast at 178.67 bushels per acre, down -6.7% from last year’s estimate of 191.54 bushels per acre, and also down from the 188.24 bushel per acre three-year average. The USDA is currently estimating the Minnesota yield at 191 bushels per acre vs. 194 last year. From what I understand, the southwest portion of Minnesota had some fields with really poor results compared to last year. The Iowa samples showed an average yield of 188.2 bushels per acre, up +4.7% from last year’s 179.79 bushel and up from the three-year average 182.74 bushel. The USDA currently has the Iowa yield estimated at 202 bushels per acre, essentially the same as last year. The short term trend for December corn is negative.  The short term target at 364.75 was met Thursday.  Consecutive closes below 364.75 would signal a drop to 350.25 perhaps 345.5.  A close over 373.75 is constructive.  Short December corn, system traders will find buy stops around 366.5.  September options go off the board today.  Unlikely to rally that far, there is big pin risk at 360.

Soybean traders have watched the bottom fall out of meal prices this week as bids around the country start to dry up.  The basis in many locations has really started to widen with very little export demand to help pull beans from domestic homes. I’ve heard some reporting a -$1.70 under is the best they can get now in parts of South Dakota. The flat-price in the soybean market has fallen by over -40 cents this week, while some areas have also seen a -20 cent hit to the basis. The Pro Farmer Crop Tour released estimates fro Minnesota and Iowa last night. The Minnesota numbers showed 1090.47 pods in a 3×3′ plot, up +6.9% from last year’s 1019.96 estimate and up substantially from the 1082.26 three-year average pod-count. The USDA is currently forecasting the Minnesota crop at 49 bushels per acre vs 47 last year. The Iowa estimates showed an average pod-count of 1208.99 in a 3×3′ plot, up +10.6% from last year’s 1092.92 estimate. The USDA is currently forecasting the Iowa crop at 59 bushels per acre vs. 56.5 last year. The technical trend for Nov beans is bearish.  The short term target at 861-3 was met Thursday.  An inability to stabilize at 850 and reassert above 863 would signal a drop under 840.  A close over 874 is needed to improve the outlook.  Short November beans, system traders will find buy stops around 873.75.  September options go off the board today.  Below 850 there is little pin risk.

U.S. Ag Secretary Sonny Perdue said yesterday that details of a planned $12 billion aid package for U.S. farmers hurt by the Trump administration’s trade wars may be disclosed Monday. Perdue has said the plan would include between $7 billion and $8 billion in direct cash relief for farmers. He also said they hoped to have the program up and running after Labor Day and declined to give further details. (Source: Reuters)

Average daily U.S. ethanol production has held above a million barrels for 17 consecutive weeks. The U.S. EIA says production last week averaged 1.073 million barrels, up 1.000 from previous week. The industry continues to respond to strong export and domestic demand, including the possibility of year-round E15 use. Stocks climbed for the fourth week in a row, up 242,000 barrels to 23.259 million and corn for ethanol use remains on pace to meet or exceed USDA projections for the current marketing year which ends August 31. (Source: EIA)

Customs data showed China’s grain imports plunged in July as part of its trade conflict and rising international prices curbed buying. China brought in 220,000 metric tons of sorghum in July, down 62.5% from 588,364 metric tons a year ago. China imports nearly 100% of sorghum from the U.S. Data showed July corn imports also slide 63.7% from last year and July wheat imports dropped 43% from a year ago. (Source: Reuters)

Sierra Mixe has been locally bred in the District of Oaxaca in southern Mexico for centuries if not longer. But what wasn’t known about this unusual plant that can grow up to twenty feet tall, is that it can make its own nitrogen. Interestingly, Sierra Mixe grows to impressive heights in what can charitably be called poor soil, without the use of fertilizer… but the strangest part of the corn is its aerial roots, which are green and rose-colored, finger-like protrusions sticking out of the corn’s stalk, dripping with a clear, syrupy gel. In the 1980s, Howard-Yana Shapiro, now the chief agricultural officer at Mars, Incorporated, was in the area looking for new kinds of corn when he stumbled across this variety. Shapiro thought he may have found the Holy Grail of agriculture as he believed the protruding roots allowed the corn to produce its own nitrogen. Unfortunately, the technology wouldn’t come for 20 more years to discover the specifics of his theory. But in 2005 a team of researchers began the work and have recently released their findings in the journal PLOS Biology . From what I understand, the gel that drips from the stalks corn can provide 30 to 80% of the plants nitrogen, but the effectiveness does depend on environmental factors like humidity and rain. Obviously, if researchers can breed the corn into commercially viable cultivars, it would be a game changer for the industry in numerous ways, from the reduction of synthetic fertilizer production to the use and runoff of the product. All of this would then lead to other environmental benefits. From what I understand, the next step is to breed the trait into commercial corn, but this will take years more research. But the facts remain, this corn shows us that nature can find solutions to some problems far beyond what scientists could ever imagine. (Source: Univ. Wisconsin-Madison)


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