Corn Futures Stay Afloat With Help From Demand Lifeline
Corn for March delivery rose 0.2% to $3.82 a bushel on the Chicago Board of Trade on Monday as traders believed improving ethanol production, corn export sales and a late harvest are providing support.
While still weaker than the previous year, corn demand appears to be on the upswing, said Todd Hubbs, a professor at the University of Illinois. While rising ethanol production and a slow improvement to corn export sales over the past few weeks aren't enough to meet USDA targets set earlier this year, the size of the 2019 corn crop remains in doubt because of winter weather. "A continuation of demand recovery combined with a smaller crop should provide some support for corn prices moving forward." Mr. Hubbs said.
The Water Wars that Defined the American West Are Heading East
CAMILLA, Ga. -- Water stress, a hallmark of the American West, is spreading east.
The shift is evident on Casey Cox's family farm in Georgia's agricultural heartland, where she turned on five giant rotating sprinklers to see her sweet corn through weeks of hot, dry weather last spring.
"If we hadn't had irrigation, our crop would have burned up completely," said Ms. Cox, who with her father also produces soybeans, peanuts and timber on 2,400 acres.
WASDE Waves: December's WASDE report from the USDA, which many anticipated to be a quiet report with few bits of news, may actually have an outsized effect on grains futures, according to Karl Setzer of AgriVisor.
"Typically, the December WASDE released receives little attention, but in a market that is starved for fresh news, that may change," Mr. Setzer said. Demand is typically the only metric adjusted by the December report, but the unprecedented nature of this growing season makes crop supplies a growing factor on prices, he said.
STORIES OF INTEREST:
US Farmers Used As Reason for Metal Tariff Reinstatement -- Market Talk
09:04 - On his Twitter this morning, President Trump announced that the US would be reinstating the Section 232 tariffs on aluminum and steel exports from Argentina and Brazil. Both countries have been exempt from the tariffs--25% on steel exports, 10% on aluminum exports--since May 2018, but Trump Monday said that currency manipulation by these countries is hurting US farmers. Brazil, in particular, has been an insurgent rival with the US for Chinese soybean business. Grains traders are forecasting that US soybeans prices will slip as export business dries up. "We would expect to see Chinese export demand through the middle of December, but after that the export prospects don't look all that great," says Tomm Pfitzenmaier of Summit Commodity Brokerage. (email@example.com; @kirkmaltais)
Deere Positioned to Benefit from Recovery in North American Ag -- Market Talk
13:02 ET - Deere is well positioned to benefit from a cyclical recovery in North American agricultural equipment, BMO Capital says. Waiting for a stronger recovery has frustrating, but "we expect there is only so much time before farmers are forced to replace their aging tractors, which are, on average, the oldest in more than a decade," BMO says. BMO raises its target price to $180 from $175. Deere guided for FY20 ag and turf equipment sales down 5% to 10%. The conservative outlook could be influenced by transition to a new CEO, as well as missing consensus expectations a few times, BMO says. Another factor is an elevated amount of equipment on hand at Deere's dealers, the note says. Deere shares down 1% to $166. (firstname.lastname@example.org)
Hog Futures Finish Day 3% Lower -- Market Talk
15:39 ET - Hog futures on the CME drop 3%, at 66.15 cents per pound. In the past month, hog futures have fallen 11.6%, as pork supplies in the US continue to pile up while Chinese demand for US exports remains far below what was expected for this time of year. Live cattle futures also fall 0.3% to $1.258 per pound--although in cattle's case, prices are still higher since the spring, as supply looks tighter amid stronger demand. (email@example.com; @kirkmaltais)