Tremont Coop Grain Commentary

Thursday, May 16th

7:40 AM

Current market: corn up 6, beans up 4

Overnight Asian markets were lower with trade still the main driving force. President Trump has moved to curb Chinese manufacturer Huawei's access to the US market. European markets are mostly unchanged at midday. Weekly jobless claims drop 16k to 212k, more than expected after Easter-week spike, and US April housing starts rise to 1.24 million, higher than the 1.21m expected; the US economy keeps humming along. US Treasury keeps falling, now at 2.375%. US markets pointed towards slightly higher openings, DJIA just below 26k and S&P right at 2900.

Weekly export sales were at the higher end of expecations. Still, corn prices have made us non-competitive in the world market and we keep falling further behind pace of the projected 2.3 bbu export number the USDA has penciled in. US corn is priced about $10/ton higher than all it's competitors and the recent weather rally will likely keep corn buyers purchasing from SAm and Ukraine. US bean prices are much more competitive, with beans off the PNW the cheapest sourced location. However, the ASF outbreak in China continues to push world demand for soys lower, but the US is still on pace for its 1.8 bbu export number.

Market is closely watching weather patterns as a cooler, wetter system has set in over the Western Corn Belt putting corn planting in limbo. President Trump is floating the idea of direct payments to farmers totaling some $15B which would circumvent the need for Congressional approval, and the payments are said to favor pork and beans for those with insider knowledge. At current futures levels, new crop corn/beans ratio at 2.2 would favor fringe acres in corn, however another round of $1.60 payments on soybeans would theoretically push that ratio towards 2.6.

 

AG


 

Disclaimer: This commentary does not represent the views of Tremont Cooperative Grain Company, but rather one author's opinions. Data used in this commentary is taken from sources believed to be accurate, and is intended for informational purposes only and should not be solely used to conduct any type of trading strategy. For more information, please contact Tremont Cooperative Grain Company at 309-925-4981, or email info@tremont.coop.

Past Commentary

Links to our previous commentaries: