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This week we look into the latest developments in the US/China trade war. We then switch to the USDA’s September WASDE report that will be released tomorrow at 11 am central. While we think corn and soybeans can rally in the short term, farmers should be using increases in price to sell 2019 new crop and also start to price/hedge 2020 and 2021. Finally we look into livestock and energy, and why we think Cattle may have bottomed. Take a listen to Turner’s Take Podcast!
Below are the two most important tables for tomorrow. They are the 2019/20 ending stocks for US and world corn, soybeans, and wheat. I think the USDA will lower harvest corn acres a little and also bring down corn and soybean yields marginally. If they are going to eventually bring down yields, I think it is more likely they do it between the October and January reports when they have more data directly from the fields.
If new crop corn carryout is really under 2.0 billion and soybeans are 660, then I think we the potential for a nice rally in Sept/Oct if the weather is adverse for crop development and we start to see some frost risk. Corn harvested acres are likely to come down, over 9mm acres of corn had not reached the dough stage as of Sept 8, along with over 5 million acres of soybeans that have not started podding.
Below is chart of Aprlil 2020 and Dec 2019 Live Cattle. This looks like a bottom reversal to me. April 2020 looks even better as