Morning Commentary

Dec corn down 1 ¼ at $3.67

Nov beans down 2 at $8.4225

The DOW is down

USD is stronger

Crude oil down $.89 at $68.98

Good morning,

Corn prices have rallied a bit from their recent lows, but quickly approaching are some nearby technical hurdles that could trip up the bulls. Demand remains strong, but at the same time most all sources are looking for a new record yield to be harvested. The USDA continues to confirm strong demand, showing July ethanol production chewed through 481.3 million bushels of corn, up almost +6% compared to last July. This has many bulls believing the USDA will need to raise their current corn used for ethanol estimate by about +10 million bushels. . USDA’s weekly crop-condition report lowered the overall “Good-to-Excellent” rating by -1% from 68% down to 67% vs. 61% last year. States showing the most improvement were: Colorado up +6%, now with 72% of their crop rated GD/EX vs. 55% last year; Kentucky was raised +4%, now with 75% rated GD/EX vs. 80% last year; Indiana was raised +2%, to 72% rated GD/EX vs. 51% last year; Iowa, Michigan, Missouri, North Carolina, South Dakota, and Tennessee all improved by +1%. States reporting deteriorating conditions were: Pennsylvania lowered by -5%, now with 65% rated GD/EX vs. 88% last year; Nebraska lowered -2%, now with 81% rated GD/EX vs. 63% last year; Kansas lowered -2%, now with 44% rated GD/EX vs. 54% last year; Illinois and Wisconsin were both lowered by -1%. Minnesota, North Dakota, Ohio and Texas were all left unchanged on the week. The crop was reported as 75% “dented” vs. the 5-year average of 60%. Corn in the “dough” stage was reported at 96% vs. the 5-year average of 91%.

Soybean prices struggle to hold upside momentum. Bears continue to talk about the U.S. yield perhaps getting larger and the ongoing negative headlines associated with the spreading of “African Swine Fever” in parts of eastern China. Let’s also not forget we are battling the ongoing negative trade headlines, where the U.S. looks poised to move forward with a much larger round of tariffs on Chinese imports, perhaps as soon as this week. Domestic U.S. demand continues to put up strong numbers. The USDA reported yesterday that the July crush was 178.9 million bushels, up almost +15% from last year and up substantially from last month. It also eclipsed the previous July record set back in 2015 at 155.8 million bushels.

The Market Facilitation Program that will provide direct payments to help corn, cotton, sorghum, soybean, wheat, dairy and hog farmers who have been directly impacted by illegal retaliatory tariffs, began yesterday. If farmers plan to apply for the payments, they must due so before January 15, 2019. To take advantage of this planned one stop process, corn and soybean farmers should consider waiting until after their harvest is completed to file for their Market Facilitation Program payment. Farmers will have to certify their final yield before receiving a check under this program. Therefore, if farmers apply in their local FSA office this week (or anytime prior to harvest completion), they will have to visit again to sign and certify final yields. For more information about the MFP program, visit or contact your local FSA office. (Source: Illinois Corn Growers Association)


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