Good Morning,

Overnight the markets were sharply lower with corn, soybeans and wheat all down 6-7 cents. This morning corn opened 5 lower while soybeans and wheat were 3 and 8 lower respectively.

President Trump announced significant sanctions on China Friday afternoon. The president formally withdrew U.S. membership, and therefore funding, from the World Health Organization for its role in helping China cover up the risks associated with the coronavirus. He formally removed “special status” for Hong Kong, which allowed both U.S. companies and the U.S. government to do business in Hong Kong as if it were a separate entity from China. That will have a notable adverse economic impact on both Hong Kong and on China. The president also called for increased scrutiny of Chinese companies doing business in our financial markets. This, combined with previous sanctions on government retirement accounts investing in Chinese businesses, is just the beginning of what he can do to control capital flowing into China.
Reports out of China are that the state buyers have been told to halt purchases of US pork and soybeans. These two commodities are what China has been buying the largest volumes of in recent months. China can manage short term on existing supplies and shipments that are on their way from Brazil, but will be back in the market later this summer when that supply dries up.
Favorable weather across the Midwest over the weekend and forecasts for the 7-10 day will keep weather from adding any life to the markets.
Continue to make sales on any small rally and take advantage of $3 cash and new crop sales when available. If we don’t see weather move this market in the next 4 weeks, we may very well be out of opportunity for the bulls. Historically we do not see weather rallies in the market after the 4th of July.

Have a Safe Day!

Garry Gard