Post Market Wrap Up July 21

Headlines:

• Senate Panel Votes to Keep Top USDA Rural Development Job
  The Senate Appropriations Committee approved unanimously a USDA-FDA funding bill that rejects President Trump’s proposals to slash spending on rural development, crop insurance, and food stamps. In the first major congressional disagreement with Agriculture Secretary Sonny Perdue, the $145 billion funding bill overrides his recent elimination of the slot for an undersecretary in charge of rural economic development — and directs the administration to fill the job.

• Stronger crop prices support global fertilizer demand, says PotashCorp
  Stronger crop prices and volatile weather underline the need for growers to invest in fertilizer to protect their crop yields, notes Canadian fertilizer manufacturer Potash Corp. Its July shareholder market overview for points to recent crop price strengthening as weather reports downgrade potential yield in many areas. This is leading to crop buyers increasing their forward buying. Global food production has increased at an average 2% per annum over the last 15 years, despite the political and economic volatility over that period, the company reports. This will support future demand for the three major plant nutrients – nitrogen, phosphate and potassium. “Current fertilizer and crop price levels provide strong affordability and incentivize farmers to supply the necessary crop nutrients to achieve high yields,” PotashCorp states.

 

Summary:

The rain that fell on the Corn Belt overnight was enough to cause double digit losses for Corn today. Both December and September Corn lost 11 cents at settlement. The most recent weather forecasts are calling for additional wetness over across the 6 to 10-day forecasts. The potential for beneficial rain put the market on its heels a bit forcing them to loosen the reigns on building premium into the pricing. Both Soybean and Wheat futures were also softer today. September Beans was down 4.50 cents and November Beans was off 5.25 cents. September Wheat lost the same as September Beans at 4.50 cents and December Wheat was down 5 cents.

The US Dollar continues to fall against the basket of world currencies. It was down about 0.40% today but that did not lend any strength the commodity complex today. Crude Oil posted a large down day of about 2.6%. This was its 3^rd down day since July 10^th and it largest down day since July 5^th. It was up against resistance and overbought, so a bit of a selloff was not a big surprise. As long as it remains above the July 10^th low next week we think that there is potential for move upside movement.