Morning Comments May 21, 2020

July corn

Opening calls:

Corn: steady to 1 lower

Beans: 2 to 3 lower

Corn futures continue to chop sideways in a 15 cent range as the bulls and bears continue to struggle with where the market should be. On the bullish side, ethanol demand continues to improve and there is still talk of the Chinese buying more U.S. agricultural products. Bears are quick to counter that while ethanol demand is up we are still far behind last year and will need to see big improvements in production to hit the USDA numbers, fear that demand will shift back to South America in the coming weeks, a large U.S. corn crop coming with large ending stocks and the belief that some type of weather issue/demand increase will need to happen to pull us out of this range.

On soybeans, China has been buying more U.S. beans and there is improved global optimism. Crush margins in China remain strong and their demand appears to be improving. The possibility of logistic problems in South America due to corona is still being discussed but has not appeared to be an issue thus far. Bears are pointing to a large U.S. bean crop in the ground and South America pulling Chinese buying away from the U.S. as the main factors that will keep us from rallying.

The sideways pattern in the market shows the trade is uncertain and that bulls and bears are at somewhat of a stalemate. Fresh news is needed to push the market one way or another out of its range. 

Details on the Food Assistance Program are still developing and your FSA office is being trained this week about it. Here is a link to a short video from the USDA about how to apply. This is well worth the few minutes it takes to watch:

Given the uncertainty in the grain markets right now, be sure to contact your local GMA to discuss marketing options on both your old and new crop grain.