Morning Commentary

Dec corn down 1 ¼ at $3.65

Nov beans down 2 at $8.3725

The DOW  is down

USD is weaker

Crude oil down $.01 at $67.76

Good morning,

Corn traders continue to debate the U.S. yield. Despite bulls thinking the current USDA estimate is overly optimistic, Informa opted to raise their forecast from 176.0 to 178.8 bushels per acre, slightly ahead of the current USDA estimate. It’s just hard to get a good gauge on the variability that’s currently in play. Several areas are seeing too much rain and producers seem very uncertain about the outcome. Other areas are reporting huge numbers but low test weights. Others reporting record shattering totals.

Soybean traders are paying close attention to politics in South America. Argentina has had a series of economic woes and is in the midst of a complete meltdown. Brazil continues to struggle with logistical issues and trucking complications. We also have the first round of the Brazilian presidential election now 30-days away, and the leading candidate, 63-year-old far-right former army captain, Jair Bolsonaro, stabbed during a street rally in the central state of Minas Gerais yesterday afternoon.  The traditional fundamentals continue to paint a burdensome supply side story. There’s talk amongst the bears that the U.S. yield could perhaps push closer to 53 bushels per acre and ending stocks up closer to 900 million. Informa bumped their soybean yields estimate to 52.9 yesterday.

China reported four cases of African swine fever on Thursday alone, bringing the number of outbreaks to 13 since the virus was discovered in the country just over month ago. The disease has traveled vast distances in the world’s largest pork producer from Jiamusi, Heilongjiang, on the border with Russia to Wenzhou, which is 1,865 miles to the south. The outbreaks have pushed up pork prices in the country’s south as demand grows ahead of a week-long holiday in October and also raised the prospect of more imports. (Source: Reuters)

Perdue promised they’d be as transparent as possible in dealing with corn and wheat groups’ request for USDA to explain how it arrived at the wide-ranging payment rates in its trade relief plan. It seems some corn and wheat groups feel slighted in that three-fourths of the initial aid payments are going to soybean growers. Perdue did mention USDA’s chief economist Robert Johansson as the one of the main architects of the payment rates. Johansson is scheduled to appear before the Senate Ag committee next week in a hearing on ag trade. We should no more about the calculations of the payments by then. (Source: Politico)

U.S. rail transportation of grain products for the week ended Saturday totaled 22,633 cars, a 24.3% increase form the same week year ago, Association of American Railroads data showed. Rail transportation of chemical products rose 33.9% year-on-year to 33,408 cars, the data showed. AAR designates fuel-grade ethanol as a chemical product. Cumulatively, grain product shipments have totaled 810,941 in 2018, up 4.2% compared with 2017.


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