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May 1, 2019

© 2018•Trilateral

Trilateral Grain and Market Weather Update

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© 2019 •Trilateral 2

Corn on page 3 Soy Complex on page 4Wheat on page 5 Related Market News on page 6 Weather Update on page 8 Feedstuffs on page 9

Contents

Commodity Month Last ChangeCorn July 3.6625 3.75

Soybeans July 8.5000 (4.00)Soybean Meal July 299.40 (0.70)Soybean Oil July 27.7600 (0.15)

Chicago Wheat July 4.3475 6.25 KC Wheat July 3.9875 5.00

MPLS Wheat July 5.1000 3.50

Commodity Month Last ChangeCrude Oil June 63.76 (0.16)

Natural Gas June 2.655 0.037 Gold June 1283.80 (2.50)

S&P Futures June 2951.25 2.75 Dollar Index Cash 97.44 (0.040)

Overnight Trade

Sep

Market Summary Highlights

Morning Trading

• Corn futures • Soybeans • CBOT Wheat

USDA, Government & Industry Reports

Market Headlines

Corn:

Soybeans:

Wheat:

Boosted by U.S. planting delays

Down, fresh contract lows

Up but prices capped by ample supplies

• Dow Jones: Higher• U.S. Dollar Index: Lower• Gold: Lower• Crude Oil: Lower•

HigherLowerHigher

• USDA Fats & Oils (USDA Crush Report)• PMIManufacturingIndex• ISMMfgIndex• EIAPetroleumStatusReport

© 2019 •Trilateral 3

CornSources: DTN and Reuters

• Corn futures are posting gains Wednesday morning, working on a fifth session in a row with a higher close.

• Planting delays and the massive fund short are all any-one wants to discuss at the moment. A lot of the re-cently added fund short positions were put on around $3.67 basis July futures which could place them in jeopardy with any continued price strength.

• The forecast looks far less than ideal, although as long as the corn is in the ground by May 10, then crisis should be averted. Otherwise, we continue to focus on the 2018/19 demand situation with plenty of concerns to monitor.

• After 1/2” to 1 1/2” of rain fell Tuesday in the upper Midwest, more storms are moving across the Corn Belt. A wet and cool forecast is in store Wednesday for the Southern Plains and much of the Midwest, with some snow in the northwest Plains. Heavy rains on the Illinois River have caused major delays in shipping there. The weather forecast for the next 15 days is for above normal precipitation and below normal temps, leading to planting delays for both corn and spring wheat.

• On the export front, USDA sees Argentine/Ukrainian/Brazilian corn production at 178.8 mil-lion metric tons (mmt) at the end of 2018/19. This would push total supplies up 20% from a year ago and be the largest on record by a wide margin. This competition should last all sum-mer, and without a deal on trade which results in China buying a massive amount of U.S. Ag products, the corn export forecast looks a bit rich.

• As African swine fever continues to have a devastating effect on China’s pork supply, China recently approved pork imports from Argentina and have agreed to increased poultry trade with Russia.

© 2019 •Trilateral 4

Soy ComplexSources: DTN and Reuters

• Soybeans are near unchanged on most contracts Wednesday morning trying desperately to put a foot in the ground and lay the framework for a basing reversal process. Fresh contract lows were set Tuesday as spot month prices fell to the lowest level since November.

• A dismal export picture, with sales and shipments still well under a year ago, along with sharply higher South American supplies and new fund selling has resulted in July soybeans falling 65 cents just since April 16.

• Old crop soybean futures fell again Tuesday to new contract lows, while new crop November came within eight cents of the low. November new crop soybeans are trading at 8.74 3/4 which is the lowest new crop bean price for late April since 2007. That trend is the same across the board as the fund sell pressure re-mains relentless. Funds are now thought to be short over 160,000 contracts of soybeans, a new record if confirmed.

• With weather likely to keep farmers out of the field for another 5-7 days, acreage shifting toward soybeans is undoubtedly still occurring.

• Soybean meal also made new lows Tuesday below the previous support of $300, but the weakness found some end user pricing interest. Argentina has also ramped up both soybean and meal ship-ments ahead of a possible tax increase, and totals for the month are 2.5 mmt of meal and 1.1 mmt of soybeans, according to Linn Group analysts.

Soybeans

Meal

Oil

© 2019 •Trilateral 5

WheatSources: DTN and Reuters

• Wheat contracts are higher Wednesday morning after most contracts got to enjoy a fresh round of contract lows Tuesday. Whether July, September or December, hard wheat contracts are at their lowest levels for late April since 2007.

• Farm marketing has ground to a halt, although the ability of the farmer to hold grain off the market will get increas-ingly difficult with harvest 4-6 weeks away in the south-ern plains.

• Kansas City July has fallen over 50 cents per bushel just since mid-April. The Wheat Quality Council Tour moves into its second day, with results from the first day glow-ing after 240 stops in north central, central and western Kansas, and revealing an average yield of 46.9 bushels per acre (bpa) compared to last year’s 38.2 bpa the first day.

• The wheat basis Tuesday fell ten cents in Kansas City, es-pecially in the higher protein.

• More rains are falling in the Southern Plains wheat ar-eas, and some heavy totals are expected in Kansas and Oklahoma, but heavy rains in the eastern soft red winter wheat areas are surely not welcome.

HRW

SRW

HRS

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Related Market NewsCME Globex Recap:• Mostly quiet financial markets overnight as investors await the decision from the latest FOMC

meeting. Expectations are almost unanimous the Fed will leave their interest rate policy un-changed this month. According to financial media, one of the major hang-ups to the trade agreement between the U.S. and China is post-agreement tariffs and the U.S.’s insistence on the ability to keep tariffs in place until the compliance mechanism can verify China is adhering to the agreement. This coupled with news about the Administration readying potential farm aid has raised fresh concerns about an agreement thought to be close at hand. Grain markets are mostly higher as weather and trade remain the primary drivers with planting progress all but stopped across the Midwest this week.

RJO• Grain markets post modest bounce following Tuesday sell off while soy market extends 2 day

selloff of 13 cents/bu. Start of a new month may usher in new buying although most global markets closed for May Day celebration.

• Weather delays suggest US on glidepath to have only 30 ma of corn planted by mid-May (vs. 60 ma normal)—similar to 2013 which posted 1.8 ma Mar to Final loss in corn area and final yield 4 BPA below trend. Market behavior suggests that any loss in 2019 US corn production potential is being mitigated by increasing S American corn production prospects with safrina corn slated for more rains through end of week and again next weekend.

• Weather leans bullish with more follow up Midwest rains following yesterday’s preicp across E KS, MO, and most of IL. CWG says biggest delays the next 2 weeks will be across KS, MO, IL, IL, KY and portions of TN. NW Midwest/HRS trend dry into mid-May although cool temps will slow needed drying. 16-30 day looks wetter across Delta. About ½ of Canada (mostly Saskatch-ewan) stays dry.

Reuters• China and the United States held “productive” trade talks in Beijing on Wednesday and will

continue discussions in Washington next week.

• Crop scouts in Kansas are likely to observe one of the best winter wheat crops the state has ever produced, even though the plants are behind in maturity. Kansas produces about a quar-ter of all U.S. winter wheat, and current conditions are among the best in recent memory. The annual Wheat Quality Council tour is under way in Kansas, and tour scouts are gauging yield potential for the hard red winter wheat crop prior to the first forecast of the season from the U.S. Department of Agriculture, due at the end of next week. As of Sunday, USDA had rated 58 percent of winter wheat in Kansas as good or excellent, the highest percentage for that week since 2012. That is sharply up from last year’s drought- stricken crop that was rated only 13 percent good-to-excellent at the end of April.

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• U.S. private employers added 275,000 jobs in April, well above economists’ expectations and the most since last July, a report by a payrolls processor showed on Wednesday.

• Raw sugar prices on ICE fell on Wednesday, depressed partly by weakness in energy markets, while London cocoa climbed to its highest in more than nine months. A retreat in crude oil prices has also added to downward pressure on sugar. “The sugar market has taken a bit of a battering in the past sessions as technical support levels have been breached in a background of weaker energy prices and a weaker Brazil real,” Nick Penney, senior trader with Sucden Fi-nancial, said.

• Oil prices inched down on Wednesday after an unexpected rise in U.S. crude inventories, but the fall was limited by an intensifying crisis in Venezuela along with tightened U.S. sanctions on Iran.

• The U.S. Federal Reserve, leaning back against pressure from President Donald Trump to slash interest rates, is expected to leave borrowing costs unchanged on Wednesday as it maintains a ‘patient’ monetary policy stance amid strong economic growth.

• The U.S. Environmental Protection Agency (EPA) said on Tuesday that glyphosate, a chemical in many popular weed killers, is not a carcinogen, contradicting decisions by U.S. juries that found it caused cancer in people. The EPA’s announcement reaffirms its earlier findings about the safety of glyphosate, the key ingredient in Bayer’s BAYGn.DE Roundup. The company faces thousands of lawsuits from Roundup users who allege it caused their cancer. “EPA continues to find that there are no risks to public health when glyphosate is used in accordance with its current label and that glyphosate is not a carcinogen,” the agency said in a statement.

Related Market News cont.

© 2019 •Trilateral 8

Weather UpdateMaps for the 6-10 and 8-14 day outlooks from the Climate Prediction Center see above normal precipitation and below nor-mal temperatures for the entire Midwest.

DTN Ag Weather Brief:

• NORTHERN PLAINS: Cold/unsettled weather will disrupt and delay spring wheat and corn planting during the next 5 days. Below normal temperatures but less precipitation during the 6-10 day pe-riod.

• CANADIAN PRAIRIES: Cold tempera-tures and in some areas recent snow will limit field work this week. Precipi-tation may help improve soil moisture somewhat during the next 5 days. Some-what drier during the 6-10 day period but still on the cold side. Even with re-cent and forecasted precipitation in the region more will be needed to support favorable germination and early de-velopment of crops during the coming weeks.

• MIDWEST (SOFT RED WINTER WHEAT, TRAVEL and TRANSPORT): Wet, weather and wet conditions will continue to delay corn planting during the next 10 days. The heaviest rains may shift into the south and east areas for a time before shifting back into central and a little of the west again later. Colder temperatures favoring north and west areas while the southeast is fairly warm at times.

• CENTRAL/SOUTHERN PLAINS (WHEAT/CORN/SOYBEAN/SORGHUM/LIVESTOCK): Adequate to sur-plus soil moisture for developing winter wheat. Mostly favorable conditions, except in areas of local severe weather or heavy downpours. Episodes of scattered thunderstorms will maintain adequate to surplus soil moisture for spring crops in the region, although some delay to planting at times.

© 2019 •Trilateral 9

Commodity IndicesFeedstuffsLinks to weekly USDA feedstuffs reports:

• National Weekly Feedstuffs Prices • Corn Belt Weekly Feedstuffs

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