Morning Comments – May 9th

Headlines

  • Grains slightly lower in the overnight.

  • Argentina weather damages soybean quality.

  • China ramps up inspections on U.S. pork imports.

Weather

  • Additional precipitation is expected across NE, IA, S. MN, WI, N. IL and MI over the next 1-5 days, bringing 2-3 inches across the central and northern midwest.

  • The 6-10 day forecast shows additional precipitation is expected in MO, E. KS,  W. OK and parts of the TX panhandle which will benefit the winter wheat crop.

South American Weather

  • Rains in 6-15 day forecast for central and southern Brazil will help late pollinating corn.

  • Heavy rains recently in Argentina has bogged down harvest and damaged crop quality.

  • Rosario grains exchange said that in some areas waterlogged soybean pods have sprout or burst before being harvested which will lower Argentina soybean prices.

  • Rains are expected to ease in 6-15 day forecast which will help with harvest progress.

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Trump Renewable Fuel Meeting

  • Following a closed door meeting in the White House, sources say that Trump will NOT implement a cap on renewable fuel credits.

  • The President expressed that he is considering letting exported ethanol count towards the RFS mandate. He also seeks to make E15 available all year long.

  • Senator Cruz considers the meeting a win-win while Senator Grassley was supportive of the efforts to increase higher ethanol blends but expressed caution on the ethanol export plan.

  • Ethanol RINs sold off following the White House meeting.

China Increases Checks on U.S. Pork Imports

  • WH Group Ltd Director said “ports are opening and inspecting every cargo that arrives.” This compares to “random” checks in the past.

  • The checks increase the amount of time that the products sit in the port from just days up to two weeks.

  • USDA attache in Beijing noted in an April 30th report that inspection and sampling efforts were increased.

  • This news comes after China announced it was stepping up quarantine checks on apples and logs from the U.S. after “detecting pests in the imports”.

  • Many see these efforts as a warning after trade tensions between the U.S and China have increased.

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