Dec corn down ¾ at $3.6425
Nov beans down 2 ½ at $8.41
The DOW is down
USD is stronger
Crude oil up $1.41 at $71.21
Corn bulls are digesting confirmation of rumors that the Argentine government is increasing agricultural export taxes, which in the end works towards limiting the exports of corn and wheat. The Argentine government is obviously hoping the additional tax revenues will help balance their domestic budget, giving them a better opportunity to pay down debt and work towards limiting runaway inflation, which is currently estimated to be north of 30%. Weekly crop conditions will be updated this afternoon, but they currently show the U.S. crop rated 68% “Good-to-Excellent” vs. 62% last year. The ratings for “Poor-to-Very Poor” are actually the same as last year at 12%. I personally see the difference maker being the stronger “Excellent” ratings in big production states: Illinois rated 29% “Excellent” this year vs. just 10% last year; Nebraska rated 29% “Excellent” this year vs. 16% last year; Minnesota rated 25% “Excellent” this year vs. 18% last year; Iowa rated 23% “Excellent” this year vs. 10% last year.
Soybean bulls continue to talk about strong U.S. domestic demand. In Brazil, I’m hearing talk that truck drivers are once again organizing as fuel prices near record high levels. The strength of the U.S. dollar against the weakness of the Brazilian currency is creating some unintended consequences. The crop is ahead of schedule and the USDA will be updating crop-conditions in this afternoons report. The crop is currently rated 63% “Good-to-Excellent” vs. 61% last year. Similar to corn, it’s the “Excellent” rating in large production states that continues to stir talk of a record national yield. Illinois is showing 27% of this years crop in “Excellent” condition vs. just 7% last year; Iowa is showing 19% “Excellent” vs. 9% last year; Nebraska 26% vs. 11%; Minnesota 21% vs. 14%
Agricultural exports in fiscal 2019 are projected to rise to $144.5 billion, a $500 million increase from the revised forecast for fiscal 2018, according to the latest “Outlook for U.S. Agricultural Trade” report by the U.S. Department of Agriculture’s Economic Research Service (ERS). Thanks to higher exports of wheat and horticultural products, next year should see an increase in exports which will be offset by declines in oilseeds, livestock and dairy product exports, USDA said.