Morning Comments – May 21

Highlights

  • Grains higher on positive developments in U.S./China trade negotiations.

  • Precipitation expected across Midwest in 1-5 day forecast.

Grains Higher with Trade War “on Hold”

  • U.S. Secretary Steven Mnuchin said that the trade war with China is “on Hold” while the two countries work out a wider trade agreement.

  • On Saturday, both countries said they would keep taking measures that would allow China to import more energy and agricultural commodities from the U.S.

  • The U.S. will send a team to China to work out the details for increasing Ag and Energy exports.

  • On Monday, U.S. President Donald Trump said China had pledged to buy “massive amounts” of American agricultural products.

  • The grains rallied higher in the evening session with Dec ‘18 corn touching a high at $4.24 ¾ and November soybeans reaching 10.29 ¾.

U.S Weather

  • Strong precipitation is expected across eastern NE, IA, S. MN and IL this week with the heaviest precipitation expected in IA.

  • 6-10 day forecast brings moisture into the eastern corn belt where precipitation is needed.

  • Temperatures are expected to be in the 80’s through the majority of the corn belt.

South America Weather

  • Argentina farmers have returned to the fields to assess the damage from excessive moisture. Harvest pace has been slow and is now 71% complete for soybeans and 34% complete for corn.

  • Rains next week are expected in northeastern Argentina which will continue to slow harvest, but drier conditions are expected in the 11-30 day forecast.

  • Weekend showers benefited Brazil’s 2nd crop corn over the weekend.

Commitment of Traders Report- Week ending May 15th

  • Bullish bets declined for corn and soybeans for Managed Money (MM)  in the latest Commitment of Traders report.

  • MM net long positions in corn declined 20,220 contracts to 191,672.

  • MM net long positions in soybeans declined 18,980 to 108,061.

  • MM CBOT wheat declined 9,848 to a net short position of 5,522.

  • MM KCBT wheat also declined, slipping 4,440 to a net long position of 44,190.

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Soy Crush Plant Strike in Argentina

  • A strike by crush plant workers started on Thursday to protest layoffs earlier this year.

  • On Friday, the labor ministry ordered a “mandatory reconciliation” that would end the strike. Crush plant workers said they would obey a government order to end the strike.

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