Morning Commentary

Dec corn down ¾ at $3.6625

Nov beans up 2 ¾ at $8.4675

The DOW is up

USD is weaker

Crude oil up $.35 at $68.10

Good morning,

Corn prices have been trading in an extremely narrow range the past several sessions as traders seem uncertain about the USDA’s next move in regard to U.S. yield? Bulls argue last month’s massive bump from 174.0 to 178.4 bushels per acre was too overly optimistic and needs to be trimmed. Bears argue the USDA has taken the right steps and will eventually need to push the current record setting forecast even higher, probably closer to 180 bushels per acre. Bulls remind us, the past three years (2015, 2016, 2017) we’ve seen the lows posted in mid to late-August. Bears point to 2014, where the lows were not posted until early-October. The short term trend for December corn is negative.  The recent recovery from the low on August 29th is losing momentum.  Futures will need to assert decisively higher in order to prevent a pullback.  A close over 375 would improve the outlook.  A close below 355.25 would signal a move in to new lows.  Long Dec corn, system traders will find sell stops below 361.   The market has acted sloppy of late.  Suspect bulls will look to the low 360/upper 350 area in Dec for a flier prior to the report.  Bears are probably targeting 372-375.

Soybean prices are slightly higher this morning. There’s some talk of higher prices in China as a couple of their larger production areas are forecasting a possible weather hiccup. Bears here at home are talking about a drier U.S. forecast and continued talk that an already record USDA production estimate is growing even larger, pushing towards a 53 bushel yield average and +900 million in ending stocks. This is creating what seems to be more talk of the so called perfect bearish storm gaining even more momentum. An all-time record Brazilian crop, being followed by an all-time record U.S. crop, happening at the same time the U.S. is trying to renegotiate trade with the world’s top buyer of soybeans has created the dark clouds. But perhaps intensifying the bearish storm is talk of extended trade complications with the Chinese, as well as an increase in total upcoming South American soybean acres. This has bears talking about the very real possibility of a +1.0 billion bushel U.S. ending stock number out on the horizon. If the early weather in South America looks to be cooperative and we do not see any real progress with the Chinese, the bears will probably try to apply more longer-term pressure to price. There’s some talk that with the funds short about 50,000 contracts, we could see some buying nearby in order to square positions ahead of Wednesday’s USDA report. The technical trend for Nov beans is bearish with recent action considered corrective action.  A close under 826.75 suggest a run below 800.  At minimum, a close over 858 or pop over 860.75 is needed to improve the outlook.  Short November beans, system traders will find buy stops above 851.5. 

China imported 9.15 million tonnes of soybeans in August, up 14 % from July, as buyers in the world’s top importer continued to buy from Brazil after Beijing imposed tariffs on US shipments. August figures were up from last year’s 8.44 million tonnes. Keep in mind, Chinese buyers had already been heavily purchasing soybeans from Brazil before Beijing’s hefty taxes on US cargoes took effect, on worries that supplies will tighten up and prices will rise in the fourth quarter. (Source:

Ag Secretary Sonny Perdue said during a Sunday interview that Canada must end its low-price milk proteins policy to reach a U.S.-Canadian deal to update the North American Free Trade Agreement, as they have encouraged overproduction and flooded export markets for milk proteins used in cheese and yogurt, hurting U.S. dairy farmer. He went on to say that our farmers don’t have access to the Canadian markets the way that they have access to us and class 7 has to go. It can’t be renamed something or called something else.


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