Morning Commentary

Dec corn down 1 ¾ at $3.50

Nov beans down 4 ¾ at $8.2575

The DOW is down

USD is weaker

Crude oil up $.47 at $69.46

Good morning,

Corn prices in the DEC18 contract battle to keep their head above $3.50 per bushel. New lows were posted last Thursday at $3.48^6. The bulls are hoping our historical tendency to bottom out sometime between mid-August to early-October will come sooner rather than later. The USDA’s most recent record yield forecast at 181.3 bushels per acre, adding another +241 million bushels to production, is certainly not helping things and hard for the bulls to digest.  Demand remains extremely strong, but lack of a wide-spread weather story and no real global growth headlines or feeling that the funds want to be long, works to limit bullish momentum. There’s only so much heavy lifting we can place on “demand”, eventually we have to have help from weather to create some talk of supply hiccups, and some strength from the larger macro bullish funds. We just don’t have those headlines right now. The CFTC said the trend fund short with options increased to just 86,258 lots as of Sep 11th versus 82,570 the week prior.  The record trend fund short exceeded 260,000 corn last November.  It was the index fund who was the featured buyer during the last reporting period, increasing his long by 10,000 lots.  The short term trend for December corn is bearish.  A close under 350.25 prompts further downside expansion and a test of 340.  There’s a gap on the continuation chart at 332.5.  A close over 360.75 warns of corrective action.  Short Dec corn, system traders will find buy stops around 358. 

Soybean bulls continue to have very little to cheer about. As I had been suggesting, the market made yet another round of fresh new lows last week. Unfortunately, I still see us racing under the “yellow flag” and cannot rule out another round of lower-lows. Despite talks that the Chinese and U.S. are again engaging in trade talks, it sounds like Washington wants to somehow find a way to move forward with another round of tariffs on Chinese imports. Interestingly, several sources are reporting that U.S. soybeans exported to China, with the -25% tariff, are competitive with soybeans shipping out of Brazil. Probably, why we have seen the Chinese book a few cargoes of U.S. beans as of late. The problem is it’s just not happening in any type of large capacity. In fact, this is by far the least amount of Chinese buying of U.S. soybeans we have seen in over a decade. Adding to the bearish storm clouds, is the fact the USDA is now estimating that U.S. producers are going to harvest their largest soybean crop ever. .  The CFTC pegged the trend fund short 123,395 beans as of Sep 11th versus 111,567 the week prior.  The record trend fund short dates back to July 2017 at nearly 147,000 lots.  The technical trend for Nov beans is bearish.  A close under 821.25 leaves the market vulnerable for a drop to 810.50.  A pop over 851.25 warns of a change in trend.  Short November beans, system traders will find buy stops around 842.5. 

Cargill has entered the poultry market for the first time as it has acquired Polish poultry producer Konspool for an undisclosed figure. Konspool operates a feed mill, five broiler farms and two processing sites in the country,, employing approximately 1,700 people and Cargill says that the acquisition will significantly increase Cargill’s production capacity of value added and poultry products. (Source: FoodBev)

For years, airlines have experimented with biofuels, aiming to reduce both carbon emissions and their reliance on fossil fuels. It’s been a turbulent journey buffeted by inconsistent investment and the periodic lure of cheap oil. But several major carriers are planning larger-scale usage of biofuel in 2019 and 2020, including JetBlue Airways Corp. and Cathay Pacific Airways Ltd. United Continental Holdings Inc. said Thursday that it would cut its carbon emissions by half over 2005 levels, by 2050, matching an industry target set by the International Air Transport Association. Currently, airlines account for about 2 percent of annual global carbon emissions, but the industry’s rapid growth and future expansion across emerging markets has made aviation’s environmental impact a top issue for executives and regulators.


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