Seasonal post-Fourth weather expectedThe two-week weather outlook is generally favorable for crop development across the Corn Belt. A mix of rains and sunshine, along with generally seasonal temps are expect-ed. Weather into mid-July won’t have the normal pollina-tion implications for corn, but market focus will still be high as severely delayed crops attempt to catch up.

Ping-ponging corn carryover to continueOn July 11, the World Board will incorporate the new acre-age estimate into its new-crop corn balance sheet. Assuming there’s no change to yield, that would add about 200 million bu. of supplies to the new-crop balance sheet and push ending stocks up over 1.8 billion bushels. The sharply lower soybean acreage estimate should cut crop size by about 225 million bu. — without any adjustment to yield — and lower projected new-crop ending stocks.

First spring and all-wheat production estimates, tooGiven strong crop ratings, USDA’s first survey-based spring wheat crop estimate is likely to be higher than the 629 mil-lion bu. implied in June. But the cut to winter wheat har-vested acreage may offset the higher spring wheat output.

PP may top 10 million acres, $1 billionTotal prevent-plant (PP) acres have reached as high as 10 million in the past and claims this year “could easily exceed that,” USDA Undersecretary for Farm Production and Conservation Bill Northey predicted. He says 2019-crop PP insurance payments could top $1 billion.

Farmer sentiment surges with pricesThe Purdue University/CME Group’s Ag Economy Barometer Index surged nearly 25% in June, as corn and soybean prices rallied. The survey also asked farmers if the second round of tariff aid (MFP 2) affected their decision to take PP this year; 10% said it did. The survey showed 32% of farmers surveyed planned on taking PP on some of their corn acres, with 51% of them indicating they planned on taking PP on more than 15% of their intended corn acreage.

Corn holds key support — December corn futures got within 1/2¢ of filling the May 28 chart gap at $4.20 and bounced. The 50-day moving average and the 50% retracement of the May-to-June price surge also lie around that level, marking it as the near-term battleground between bulls and bears. While we doubt bulls have fired their last shot in the corn market given this year’s crop woes, violation of key support would point to a deeper price pullback. Soybeans are likely to follow the lead of the corn market, as is wheat. But the wheat market must contend with seasonal pressure as winter wheat harvest activity ramps up. Hog futures are signaling a counter-seasonal low is in place, but the cash market must strengthen to extend the price rebound. Cattle futures are also waiting on cash market strength.

U.S./China trade talks back on, but... President Donald Trump delayed new tariffs on $300 bil-lion of Chinese goods. And U.S. companies can do business with Chinese telecom giant Huawei again. China agreed to purchase more U.S. goods, including farm products. Existing U.S. and Chinese tariffs remain intact.

Sources signal a list of ag goods the U.S. will ask China to buy will include commodities besides those Beijing has indicated (soybeans, corn and pork) such as wine, nuts, dairy, poultry, ethanol, cotton, wheat, rice, sorghum and other high-value products. Total volumes and timing of the purchases likely will depend on how the talks proceed.

Bottom line: Little has changed other than the two sides are talking again. Most importantly, all key U.S. officials have said a final accord will take time.

Another trade spat... this time with the EUA trade dispute dating back 14 years with the European Union over aircraft subsidies is heating up, but Brussels said it is open to talks. The U.S. threatened tariffs on anoth-er $4 billion in EU goods — an expansion of earlier tariff threats, which would affect $21 billion worth of EU goods. The EU has threatened counter-tariffs. The World Trade Organization could decide in the coming months whether tariffs can be introduced and how large they can be.

EPA’s proposed RFS requirements comingEPA’s proposed volume requirements for 2020 ethanol and 2021 biodiesel were not announced by presstime. Check www.profarmer.com for any late-breaking news.

Last chance to sign up for LEC!Join us at our Leading Edge Conference (LEC) July 15 in Cedar Falls, Iowa, to hear first-hand crop reports from across the country and our updated scenarios for ending stocks and commodity prices. LEC also will feature out-looks for Washington and trade policy, interest rates, the economy, weather, land and inputs. Call 1-800-772-0023 or go to www.profarmer.com/leading-edge-conference to register.

News this week...2 — Perspective on harvested acreage for corn.3 — China’s entire factory sector contracts in June.4 — Extended price outlook for fertilizers and fuels.

July 6, 2019 Vol. 47, No. 27

Go to ProFarmer.com

July 6, 2019 / News page 2

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@JWilson29@MeghanVick

@DavisMichaelsen@DoaneAg_Nelson

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Winter wheat harvest still laggingWinter wheat harvest doubled to 30% complete as of June 30, though that was still 18 percentage points behind the five-year average. Recent hot and dry conditions in the Southern Plains pushed harvest progress. Harvest advanced 23 points to 81% complete (82% on average) in Texas, 29 points to 72% done (92%) in Oklahoma and 23 points to 28% complete (61%) in Kansas.

Harvest reports signal protein quantities and qualities have been better than expected and are trending higher in Oklahoma as harvest has progressed north through the state. While there has been a wide range for test weights and yields, most farmers are pleased by the averages given heavy late-season rains. In Kansas, harvest reports signal yields are above average and quality is good. Test weight and protein levels are wide-ranging and have not been consistent.

May soy crush better than expectedU.S. processors crushed 165.3 million bu. of soybeans dur-ing May, which was a 3.7% decline from April and was 4.2% below last year. While the soybean crush pace was slightly better than expected, we still believe USDA’s 2018-19 estimate is 10 million bu. too high.

Soybean oil stocks totaled just 2.018 billion lbs. and sug-gest domestic demand remains strong. Soybean meal stocks were also below expectations at 312,000 tons.

Corn ethanol use slows again in MayCorn consumed for industrial purposes totaled 515.6 mil-lion bu. in May, including 459.6 million bu. used for etha-nol production. Those figures were down 1.7% and 2.3%, respectively, from last year. For the first nine months of 2018-19, corn-for-ethanol grindings totaled 4.014 billion bu., down 3.9% from last year’s pace. If the ethanol grindings pace matches year-ago levels over the final three months of 2018-19, it would fall 8 million bu. shy of USDA’s current forecast. Given weak production margins, a reduction in USDA’s corn-for-ethanol estimate is likely.

Armyworms marching across ChinaChina has detected fall armyworms in its third largest corn producing province of Shandong. This marks the 19th province armyworms have infested since they were first detected in early January. It’s just a matter of time until the highly destruc-tive pest spreads to the top two production provinces in north-east China, raising questions about the country’s corn crop.

More focus should be on harvested acresUSDA’s June planted acreage estimate of 91.7 million acres for corn grabbed a lot of attention, as it was more than 5 million acres higher than the average pre-report trade esti-mate. The number that should be getting more attention is the 83.595 million acres USDA estimates will be harvested for grain this year. That’s 91.2% of planted acres, which as we pointed out on News page 4 of your June 29 Pro Farmer, isn’t much below normal. However, this isn’t a normal year.

Since 2007, the average corn harvested acreage percent-age is 91.7% and the Olympic average is 91.8%. USDA made a downward adjustment to its harvested acreage percent-age because of the extreme circumstances this spring. But did it adjust down enough?

We looked at harvested acreage percentage in the years that had “good” to “excellent” corn ratings of 60% or less in late June. As with the yield study we had in last week’s newsletter, we threw out 1988, 1992 and 2012 because of their much different circumstances than this year. In the other four years with really low late-June crop ratings — 1993, 1995, 1996 and 2008 — the average harvested acreage per-centage was 90.2%. But that is skewed by 1993, which was only 85.9%. The other three years had harvested acreage percentages ranging from 91.2% to 92.0%. It’s going to take a poor finish to the growing season like 1993 to have a sig-nificantly lower harvested acreage percentage for corn.

The more harvested acres, the lower the yieldAs is the case most every year, the more low-yielding

acres that are harvested for grain, the lower the national average yield, and vice-versa. But in a year like this with so many “holes” in the crop, harvested percentage and acre-age abandonment are heightened. That’s why trying to peg acreage, yield and production is going to remain a major challenge through harvest and one that computer-generat-ed fund trading programs will be slow to grasp. It’s also why after the initial strong push up in price, it may take the market months to reflect the impact to supplies like it did in 1993 and 1995.

Yet to emerge: 6% of corn, 17% of beansUSDA said 94% of the corn crop was emerged as of June 30. Just 83% of the soybean crop was out of the ground. That’s still a lot of acres for which the growing season hadn’t started by the end of June. The acres that just emerged or are not yet out of the ground are going to need at least an extra month or more on the end of the growing season to reach maturity.

July 6, 2019 / News page 3

Producer Crop Comments...Please send your crop comments to editors@profarmer.com.Chase Co., (southwest) Nebraska:“Corn is looking good, but not as good as last year. Lots of little issues are presenting themselves.”

Northeast Iowa:“Second year in a row I’ve had 10 inches of rain in both May and June. Last year my corn was 30 bu. under my APH. Rain doesn’t always make grain.”

North-central Iowa:“Drove down U.S. 169 to 141 then I-35 to Kansas City. Returned along I-29 to St. Joseph, Missouri, then back to I-35 at Cameron, Missouri. Not much better looking corn than here at home, and a lot is behind us. Our corn looks good, despite what we put it into. Lots of variability.”

Central Iowa:“Drove from Ankeny, Iowa, to Wahpeton, North Dakota. Never seen that bad of crops before.”

ACTUAL DOANE FORECASTS*YearAgo

LastWeek

ThisWeek Aug. Sept. Oct.-

Dec. 6/29/2018 6/28/2019 7/2/2019 (Monthly & quarterly avg.)

CORN Central IL, bushel 3.21 4.36 4.09 4.30 4.40 4.30 Omaha, NE, bushel 3.31 4.39 4.11 4.40 4.50 4.40 Dried distillers grain, IA, $/ton 120.50 132.50 132.50 -- -- --SOYBEANS Central IL, bushel 8.31 8.55 8.52 8.90 8.80 9.00 Memphis, TN, bushel 8.73 9.00 8.90 9.30 9.20 9.40 Soymeal, 48% Decatur, IL, ton 341.90 321.20 310.20 320 320 322WHEAT Kansas City, HRW, bushel 4.75 4.81 4.39 4.50 4.60 4.85 Minneapolis, 14% DNS, bushel 6.82 6.50 6.39 6.45 6.30 6.60 St. Louis, MO, SRW, bushel 5.01 5.72 5.25 5.65 5.80 5.90 Portland, OR, soft white, bushel 5.85 4.81 6.02 6.00 5.90 6.10 Northeast MT, durum, 13%, bushel 5.27 4.77 4.77 4.75 4.65 4.85SORGHUM, Kansas City, cwt. 5.00 7.32 -- 7.25 7.25 7.30COTTON, 11/16 SLM, 7 area, ¢/lb. 80.91 60.28 60.26 60.00 60.00 62.00RICE, nearby futures, cwt. 11.42 11.14 11.21 11.80 11.95 12.10BARLEY, Montana, malting, cwt. 8.25 8.87 8.87 8.87 8.90 8.95OATS, Minneapolis No. 2 heavy, bushel 2.82 3.05 3.20 3.25 3.30 3.20ALFALFA, NW Iowa, lg. sq. prem., ton -- 185.00 176.25 170.00 167.50 162.50SUNFLOWERS, Fargo, ND, cwt. 18.05 17.52 17.52 17.50 16.75 16.50HOGS, Nat’l basecost cwt. 51%-52% 77.10 69.14 68.15 75.00 77.00 72.50FEEDER PIGS, 40 lbs., nat’l avg., head 39.89 54.04 53.57 55.00 60.00 75.00CHOICE STEERS, NE feedlots, cwt. 106.90 111.28 -- 113.00 115.00 120.00FEEDER CATTLE, Oklahoma City

Steers, 700-800 lbs./cwt. 145.53 139.00 140.02 142.00 143.00 140.00Steers, 500-550 lbs./cwt. 166.78 162.00 166.00 162.00 165.00 162.50Heifers, 450-500 lbs./cwt. 152.52 142.70 144.95 150.00 150.00 147.50

COWS, utility, Sioux Falls, SD, cwt. 63.50 64.76 -- 62.00 60.00 58.00MILK, Class III, CME spot MO, cwt. 15.24 16.27 16.27 17.50 17.75 17.50LAMBS, Slg., San Angelo, TX, cwt. 122.50 124.50 -- -- -- --ENERGY

Ethanol, IA, gallon 1.42 1.52 1.52 -- -- --Farm diesel, U.S., gallon 2.55 2.42 2.37 2.35 2.38 2.37

*Average prices expected for the indicated time periods based on available information. Forecasts will be revised as necessary to reflect changing market conditions. Diesel prices are from Inputs Monitor.

Posey Co., (southwest) Indiana:“Some mid-April planted corn is starting to tassel. Early corn is going to be really short this year.”

West-central Illinois:“Shortest tasseling corn I have ever seen. Who knows how it will turn out, but I wasn’t expecting it to tassel yet.”

Jefferson Co., (east-central) Missouri:“Drove from St. Louis to northeast Ohio along I-55, I-70 and I-71. Corn fields look like it’s May, not July. Ohio looks the worst. Definitely bare spots that were too wet.”

Kiowa Co., (south-central) Kansas:“Six days and we are over half done with our wheat har-vest! I thought yields would be better than they are. It’s a big range from 50 bu. to 85 bu. per acre. Corn is begin-ning to shoot tassels and generally looks very good.”

McLeod Co., (central) Minnesota:“Corn in our area is average at best. Some is better, but not much. Beans are the same.”

China factory sector slipsChina’s official purchasing managers index (PMI) that measures larger, state-run facto-ries held at 49.4 in June. The Caixin/Markit PMI that includes smaller, private factories dropped to a five-month low that was also 49.4 last month. With both PMI readings below the 50-point contraction level and orders declining, there’s increased pressure on China’s vast manufacturing sector.

China to shun big stimulusChina’s economy is likely to hit its growth target this year provided the trade war with the U.S. does not worsen, an advisor to the People’s Bank of China says. That would eliminate the need for “very big” stimulus to boost economic growth. Premier Li Keqiang echoed those com-ments, saying there will be no “flood-like” stimulus. Instead, China plans to cut bank reserve requirement ratios and lower real interest rates to help small firms deal with tightening economic pressures.

Vietnam: ASF vaccine ‘soon’Vietnam’s ag ministry says it has had ini-tial success with a vaccine to fight African swine fever (ASF) and it should be ready for use “soon.” However, experts are skep-tical given the complex nature of the virus and inability of hogs to build immunity to the highly transmittable disease.

July 6, 2019 / News page 4

Fertilizer prices have firmed steadily since placing a long-time low in November 2017, but the second quarter of

2019 was characterized by generally sideways to slightly higher price action. Prices began to ease during the waning weeks of the quarter with urea posting the most aggressive pullback. Both supply and demand are in question as flood-ing has hampered river transport and excessive rains have led some growers to opt against a full regimen of fertilizers.

Questions have also been raised regarding fertilizer sup-plies for fall. While some contend a surplus would weigh on fall prices, others note supplies currently in retailers’ coffers were purchased in an uptrending wholesale mar-ket, limiting their ability to discount product. As a result, fall prices may vary wildly across the Midwest.

Meanwhile, farm fuels tracked sea-sonal patterns through the quarter. The fuel price weakness comes despite tensions that flared in the Persian Gulf, supporting higher crude oil pric-es, and world economic factors pres-suring natural gas futures.

Upside price risk limited for anhydrousFarmers continue to increase their

reliance on NH3 for sidedressed nitrogen, but the price response has been minimal thus far. Upside risk remains for anhydrous until sidedressing is complete, but that risk will likely be mitigated by farmers refusing to spend extra money on inputs for late-planted and less-than-ideal fields. Our regional average anhydrous ammonia price has tracked the five-year average very closely since the first of the year, suggesting a Nov. 1 price around $580 per short ton.

Urea prices should fall in the months aheadChina curtailed urea exports in the past year. As the sec-

ond quarter came to a close, Midwestern urea prices began to fall, and we expect that trend to continue through summer as U.S. production continues to limit reliance on imported product. If urea continues to track the five-year average, we would expect a Nov. 1 price around $410 per short ton.

Sidedressing will limit near-term UAN price pressureFarmers who choose to sidedress will favor 32%, which

will limit price pressure through July. But if sidedressing activity falls short of expectations, Midwestern prices are

likely to sink quickly. At the end of the quarter, 28% was at a 4.4% discount to the five-year average and 32% was priced in line with its five-year norm.

Phosphate prices likely to declineDAP and MAP have been our most expensive fertilizers

when compared with expected new-crop corn revenue on the basis of higher manufacturing costs related to a rise in wholesale sulphur prices. Phosphate fundamentals sug-gest a move back down to the three-year average price, which would put DAP at a Nov. 1 price around $475 and MAP near $490.

Potash prices likely to firm into fallPotash remains priced well below the rest of the fertil-

izer segment and at a sharp discount to expected new-crop revenue. But it appears that potash is firming toward its five-year average, which would put the Nov. 1 price at a regional average of $400 per short ton.

Top off farm diesel needs Farm diesel placed a seasonal top

just a penny below and one week ahead of last year’s planting-season high. Since then, ruby red has soft-

ened 6.2% to end the second quarter in line with the five-year average price. Crude oil will remain volatile until tensions with Iran ease, but robust U.S. crude production should limit near-term fuel prices. The downturn in diesel prices gives an immediate opportunity to manage price risk, and we have recommended growers reward the set-back by topping off a portion of diesel needs. Diesel tends to surge through October, and we expect a Nov. 1 farm diesel price around $2.58 per gallon.

Propane buying opportunity ahead Dealers have begun issuing summer fill bids, with many

reported around $1.20 per gallon. We believe Midwestern propane prices will continue to ease. But propane demand is likely to be high for grain drying at harvest, so we advise growers to book LP ahead of harvest at a regional average around $1.15 per gallon. With demand for grain drying expected to be strong, we advise growers to aggressively book LP ahead of harvest and to fill total on-farm storage tanks at that time.

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Fall fertilizer prices likely to vary widely by Inputs Monitor Editor Davis Michaelsen and Editor Brian Grete

News alert and analysis exclusively for Members of Professional Farmers of America® 402 1/2 Main St. Cedar Falls, Iowa 50613-9985General Manager Joel Jaeger • Editor Brian Grete • Editor Emeritus Chip Flory • Sr. Market Analyst Jeff Wilson • Chief Economist Bill Nelson • Washington Policy Analyst Jim Wiesemeyer

Digital Managing Editor Meghan Vick • Inputs Monitor Editor Davis Michaelsen • Sr. Economist Dan Vaught • Sr. Economist Rob Hatchett • Sr. Economist Alan BarrettSubscription Services: 1-800-772-0023 • Editorial: 1-888-698-0487

©2019 Professional Farmers of America, Inc. • E-mail address: editors@profarmer.comFarm Journal CEO, Andrew Weber • Division President Grey Montgomery

Feed MonitorFEED

Corn Game Plan: You should have all corn-for-feed needs covered in the cash market into mid-July. You should have remaining needs through August hedged via long De-cember corn futures at $4.58.

Meal Game Plan: On July 1, we advised ex-tending coverage through July in the cash market. We will wait on any additional price weakness before extending coverage for the remainder of the summer.

Corn III’19 67% IV’19 0% I’20 0% II’20 0%

Meal III’19 33% IV’19 0% I’20 0% II’20 0%

DAILY AUGUST MEAL

Analysis page 1

$312.50

$321.10

$298.90

DAILY AUGUST LEAN HOGS

Position Monitor

HOGS - Fundamental AnalysisFutures responded positively to the U.S./China trade truce. With talks renewing, recent skepticism about Chinese purchases faded, especially as Chinese imports of previously purchased pork improved in the face of tariffs. Mexico and China along with several other nations are beginning to take advantage of the two-month drop in prices to add to purchases. Shipments since Jan. 1 are up 94% from year-ago, with total sales and shipments up 27%. Fresh pork prices are trying to stabilize. But bellies continue to weaken, pulling carcass values down 15.4% from last year amid record slaughter rates.

Game Plan: Fu-tures have start-ed to rally. We will wait for ad-ditional strengthening to consider hedges. The recent weakness may lead to a late-summer rally.

CASH HOGS ($/CWT.)

CASH CATTLE ($/CWT.)Position Monitor

CATTLE - Fundamental AnalysisFutures have been building a base of support for the past month and fed cattle supplies are beginning the seasonal reduction that will support beef and cattle prices for the next two months. Choice beef cutouts are trading more than $24 above Select, a reflection of extremely current fed marketings. Improved weather across the Midwest will aid grilling demand and beef sales. Exports have been sluggish the past few weeks but should improve now that slaughter rates are peaking and the dollar is weakening. Cash feeder quotes continue to lead higher amid better demand after the drop in corn prices.

Game Plan: The decline has been over-done. Beef de-mand should surpass market expecta-tions. Fed cattle producers should wait for a rally to consider short hedges.

Feds Feeders III’19 0% 0% IV’19 0% 0% I’20 0% 0% II’20 0% 0%

Initial resistance extends from the 40-day moving average (green line)near $105.825 to the May 15 low at $106.225.

Initial support remains at the June 4 low of $103.075. It’s closely backed by the May 31 low at $102.30.

The Dec. 20 low at $81.70 marks initial resistance. Key resistance is at $84.625.

The recent bounce turned $78.10 into support again. $73.95

$106.825

$106.225

$84.625

$109.025

$78.10$81.70

$102.30$103.075

DAILY AUGUST LIVE CATTLE

ANALYSIS July 6, 2019

Lean Hogs III’19 0% IV’19 0% I’20 0% II’20 0%

The 40-day moving average (green line) places initial resistance near $310.90.

The July 1 dive made the April 24 low at $304.40 initial support.

$327.60

$304.40

July 6, 2019 / Analysis page 2

DAILY SEPTEMBER SRW WHEAT

WHEAT - Fundamental AnalysisSRW - Egypt’s purchase of 60,000 metric tons of Romanian wheat confirms U.S. wheat is uncompetitive on the world market. Firming SRW basis suggests the crop may be smaller. USDA will update its numbers July 11. The trade is watching for quality issues as harvest progresses.

Position Monitor

Game Plan: You should have a standing order to sell 10% of 2019-crop in the cash market if Sep-tember SRW futures hit $5.60. Finish old-crop sales if you haven’t already done so. World prices will lead rallies amid new-crop concerns.

The July 2 drop flipped the 40-day moving average (green line) near $5.04 3/4 from support to initial resistance. Tougher resistance extends from the

Feb. 15 low at $5.14 to $5.26 3/4 and then to $5.48 1/2.

$5.26 3/4

$5.48 1/2

A dive below initial support at the Feb. 20 low of $4.95 would have bearish traders targeting stronger support at the Feb. 28 low of $4.75 1/4.

$5.14

$4.95

$4.75 1/4

CORN EXPORT BOOKINGS (MMT)AVERAGE CORN BASIS (SEPT.)

CORN - Fundamental AnalysisFutures held key gap support and rebounded, increasing the importance of last week’s low. The national average cash basis continues to firm, rising more than 20¢ above average for this time of year (see chart below). That’s the best signal that commercial firms are betting the crop is getting smaller and want to own more cash inventory. Traders will balance the reduced U.S. crop potential against slowing exports from an improving Black Sea corn crop and record South America production. The July 11 USDA supply and demand update is unlikely to provide much fodder for bulls, which means weather and weekly crop condition changes will remain the dominant price-moving forces in July.

DAILY MARCH CORN

The 40-day moving average (green line) places initial resistance near $4.37 3/4. Stiffer resistance remains at $4.59 1/2. $4.59 1/2

The top of the May 28 chart gap puts initial support at $4.31 1/2. The Dec. 14 high at $4.14 1/4 marks key support.

$4.14 1/4

$4.31 1/2

$4.76

DAILY DECEMBER CORNPosition Monitor

Game Plan: Use rallies to get current on both old-crop and new-crop cash sales advice. Vola-tility is high and should remain so, with trade driven by each new weather forecast. We plan to be patient on additional old- and new-crop sales, waiting for more clues to U.S. acreage and weather for pollination and crop potential. Weather markets can change very quickly, so make sure you get sales completed on rallies.

Initial resistance is at the 40-day moving average (green line) near $4.29 1/4. Key resistance at the May 31 high of $4.53 1/4 is backed by contract-high resistance at $4.73.

Last week’s breakdown and recovery confirmed initial support at the May 22 low of $4.22 1/2. Stronger support persists at $4.05 1/2.

$4.22 1/2

$4.05 1/2

$4.53 1/4

$4.73

’18 crop ’19 crop

Cash-only: 80% 30% Hedgers (cash sales): 80% 30% Futures/Options 0% 0%

’19 crop ’20 crop

Cash-only: 25% 0% Hedgers (cash sales): 25% 0% Futures/Options 0% 0%

July 6, 2019 / Analysis page 3

HRW ‑ Active harvest progress and better yields pressured HRW futures and weaken basis levels. However, some quality and protein issues are surfacing. Russian exporters seem unwilling to discount prices to Egypt last week; that may be a sign its southern crops were hurt by hot, dry weather.

HRS ‑ Overall U.S. export shipments have been better than expected to start the season, but HRS demand is trailing other varieties amid strong Canadian competition. Rains are improving conditions across the Northern Plains and Canada. It will take time to build a new base of support.

DAILY SEPTEMBER HRS WHEATDAILY SEPTEMBER HRW WHEATThe March 1 low at $4.53 1/2

is initial resistance. Initial resistance now rests at the April 5 low of $5.41.

$4.53 1/2

$5.15

$5.66 1/2$4.63 3/4

$5.41The April 27 low at $5.27 1/2 now marks initial support.

DAILY NOVEMBER SOYBEANS

$9.25

$9.42

$4.02 1/4

$5.80

Initial support is now at the April 16 low of $4.30 1/2.

$8.88 3/4

$9.10 3/4

$4.89 3/4

$4.30 1/2 $5.27 1/2

$8.80 1/2

Stiff initial resistance at the Nov. 26 low of $9.10 3/4 is backed by tougher resistance at $9.25.

Initial support at the 40-day moving average (green line) near $8.91 1/4 is reinforcedby stronger support at $8.88 3/4 and $8.80 1/2.

SOYBEAN EXPORT BOOKINGS (MMT)AVERAGE SOYBEAN BASIS (AUGUST)

WHEAT EXPORT BOOKINGS (MMT)

AVERAGE WHEAT BASIS (SEPT.)

SOYBEANS ‑ Fundamental AnalysisPrices slumped to a three-week low and bounced. Uncertainty remains elevated about the eventual U.S. crop size, with USDA planning to resurvey planted acreage and seeding progress the slowest on record. Weather data suggests no extended growing season that this year’s crop desperately needs to reach its full potential. Reports that China will engage in some goodwill buying of U.S. commodities as trade talks resume will need to be confirmed by fresh sales to lift prices. Brazilian shipments to China have slowed. That’s either a sign of reduced hog feed demand or a Chinese shift to more U.S. supplies. Domestic soybean oil use remains robust and is positive for crush margins.

The 40-day moving average (green line) near $8.72 is initial support. It’s closely backed by the September 2018 low at $8.68 1/4. Key support is at the May 2 low of $8.48.

$8.68 1/4

$8.96 1/4

$8.48

$9.44 1/2

$9.25 3/4

DAILY AUGUST SOYBEAPosition Monitor ’18 crop ’19 crop

Cash-only: 75% 30% Hedgers (cash sales): 75% 40% Futures/Options 0% 0%

Game Plan: Use rallies to get current with both old- and new-crop sales advice. We want to take advantage of supply-driven rallies during the next several months to increase cash sales for both 2018- and expected 2019-crop soybean supplies. You should have a standing order to sell 15% of 2018-crop in the cash market if Au-gust futures hit $9.30. We may advise new-crop sales if this order is triggered.

Initial resistance emerged at the April 18 low of $8.96 1/4 last week. Key resistance

remains at $9.25 3/4.

July 6, 2019 / Analysis page 4

’18 crop ’19 cropCash-only: 85% 35% Hedgers (cash sales): 85% 35% Futures/Options 0% 0%

75.61

Leading Edge Conference Position your farm for the policy and market impacts of this spring’s weather. Join us July 15 in Cedar Falls, IA. Call 1-800-772-0023.

USDA Crop Production ReportFirst spring wheat crop estimate.

THU 7/1211:00 a.m. CT

5

USDA Supply & Demand ReportLatest U.S. and world adjustments.

THU 7/1111:00 a.m. CT

4

USDA Export Sales ReportGrain sales slow with competition.

THU 7/117:30 a.m. CT

3

USDA Biofuel ReportApril ethanol, biodiesel output.

2

USDA Crop Progress ReportCorn, soy conditions struggling.

MON 7/82:00 p.m. CT

1

WATCH LIST

MON 7/83:00 p.m. CT

Ever since ASF was first discovered in August 2018, hog futures have been trad-ing counter-seasonally. Hogs may have established lows the last week of June when normally the market is forging sum-mer highs.

Funds cut their net-long positions to the smallest since March in the week ended June 25, CFTC data shows. The commercial long-only position remains just below the record set two weeks ago. They also cut their short hedges almost 20% since April 23. Both suggest a market low is at hand.

The cattle market also appears sold out, with funds cutting net longs to the small-est level in a year and commercials slash-ing net shorts 43% in the past two months, government numbers show.

The hog market responded with a rally after Trump and Chinese Leader Xi Jin-ping announced a trade truce at the G20 meetings on June 29.

While details on when the next talks will be held or what quantities of U.S. farm products China reportedly said it will buy are not yet known, pork would seem to fill the country’s need for more protein as a result of the outbreak of African swine fever (ASF). Remember, China has been buying and shipping in U.S. pork at a record pace in 2019, even with enormous tariffs in place.

Trump’s agreement to ease restrictions on China tech giant Huawei came as a sur-prise and could mean he sees real progress toward a deal after getting fooled by earli-er trade deal pledges from China.

By Sr. Market Analyst Jeff WilsonFROM THE BULLPEN

Crude oil: Benchmark Brent crude has rallied 25% this year after the White House tightened sanctions on Venezuela and Iran, slashing their oil exports.

OPEC agreed on Monday to extend oil supply cuts until March 2020 as 14 mem-bers overcame their differences in order to prop up the price of crude amid a weaken-ing global economy and soaring U.S. shale production.

The move will likely anger U.S.

President Donald Trump, who has demanded OPEC leader Saudi Arabia sup-ply more oil and help reduce prices at the pump if Riyadh wants U.S. military sup-port in its standoff with arch-rival Iran.

OPEC and its allies, led by Russia, have been reducing oil output since 2017 to pre-vent prices from sliding amid rising pro-duction from the U.S., which has overtak-en Russia and Saudi Arabia to become the world’s top producer.

GENERAL OUTLOOK

DAILY DECEMBER COTTON

Game Plan: Maintain orders at 71.90¢ in December futures to sell the remain-ing 15% of old-crop supplies in the cash market. Use rallies to catch up on sales.

Position Monitor AVERAGE COTTON BASIS (OCTOBER)

COTTON - Fundamental AnalysisThe market rose to a four-week high after the U.S. and China agreed to resume trade talks. The truce may boost U.S. exports that have slowed. Improving U.S. crop conditions may cap rally attempts. Traders are starting to watch developing dryness in India and China.

WEEKLY BRENT OIL FUTURES

COTTON EXPORT BOOKINGS (’000 BALES)

Key near-term resistance is at 68.60¢. Consecutive higher closes above that level

would open the upside to 72.24¢.

A close below initial support at 66.40¢ would have bears again targeting the June 10 contract low at 64.70¢.

72.24¢

74.00¢

68.60¢

66.40¢

64.70¢

The October 2018 high at $86.74 marks major resistance.

The long-term uptrend puts chart support around $55.00.

$86.74