HIGHLIGHTS

• MARKET TREND—China reciprocates—25% SB import tariff: CK, -$.1025; SK, -$.4250; WK, -$.05; KWK, -$.0150
• MACRO: Trade war tensions escalate as China announces additional tariffs less than 24 hours following the release of the White House’s list.  Asia: Mostly lower: Nikkei, +0.13%; Shanghai, -0.15%; Hang Seng, -2.19%.  EUROPE: Down: DAX, -1.31%; FTSE, -0.49%; CAC, -0.69%.  WALL STREET:  Buckle up, Futures are sharply lower:DOW, -471; S&P, -39.25; NAS, -126.50.  EXTERNALS: $ Index: -0.199 @ 88.825; AprGold: +$10.20 @ $1,343; May crude: -$1.20 @ $62.31

·       T-storm Weather: In the U.S., widespread coverage of above-normal precipitation occurs over the next two weeks as storm systems continue to parade eastward.  Coldness accompanies the setup over the next week, after which temperatures moderate but rains continue.  Areas of rain and snow focus just north and east of the driest HRW wheat in the southwest Plains area, maintaining the rainfall dichotomy where driest wheat stays dry and wettest wheat stays wet

·       CK, down $.1025 @ $3.7825; CN, down $.1050 @ $3.8675. Fund buying on Tuesdaywas 7 K           

• SK, down $.4250 @ $9.9550; SN, down $.42 @ $10.0725. Funds: Bot 6 SB, 5 SBM, 5 SBO. Board crush:  $1.54, +7; LY: $.86
• WK, down $.0525 @ $4.5225; WN, down $.05 @ $4.69.  Large funding buying yesterday, estimated at 15 K                  

CORN/SORGHUM

·       T-storm Weather: In Brazil, some thunderstorms dot Mato Grosso at times but much of the second-crop corn belt will be drier than normal over the next two weeks as areas of high pressure suppress rainfall  

• Consultant: Brazil corn crop est. unch at 86.0 MMT; neutral bias.  Planting of safrinha(double crop) corn is complete

·       Ethanol margins: $0.17 per gallon—down from $0.26 last week and below $0.38 last year.  EIA report at 9:30 am CDT

·       December 2018 corn futures on Tuesday closed at $4.12 ¼—the highest settlement price for the contract since Aug. 9

SOYBEANS/WHEAT

·       T-storm Weather: Some thunderstorms affect Argentina Fri.-Sat., but especially Sun.-Mon. when upper-level storm systems pass, producing 1.25”-2.50” across a wide area over the next week and temporarily slowing soybean harvest

·       Consultant: Brazil soybean crop est. is steady at 115.0 MMT with a neutral to maybe slightly higher bias going forward

·       ATI Research: Bias on near-term U.S. wheat exports is the 13-18 mbu per week range compared to 23.6 mbu last year

·       T-storm Weather: In the U.S., temps remain cold across driest HRW wheat over the next week, including widespread freezes this morning and Saturday, but will occasionally experience maximums in the 70s-80s (especially next week)

ENERGY

·       Lower: CLK18, -$1.20 @ $62.31; EBN, -$1.04 @ $66.63; EBN-QCLN, +$0.14; RBK,-.0230; NGK, +.006; HOK, -.0364

·       EIA Report Estimates (API): crude oil, +1.0 (-3.3); Gasoline, -1.9 (+1.1); Distillates, -1.3 (+2.2).  Estimates for ethanol prod. avg. 1.046 mil barrels/day (range 1.040-1.059).  Avg. est. for ethanol stocks is 23.8 mil barrels (range 22.5-23.1)

·       On Tuesday, cash ethanol markets were mixed: Chicago was quoted at $1.4175, up $0.00125; Basis to Chicago—New York, +10 ¼; Gulf, +11 ¼; Dallas, +7 ¾; Tampa, +20 ¾; and LA, +23 ¼ 

·       On Tuesday, ethanol RINs were significantly lower: 2017’s off 5 ½ at 35 ½-39; and 2018’s fell 5 to 36-43

·       The April RBOB/April ethanol spread gained $.0130 yesterday to close at+$.5691/gallon 

  LIVESTOCK/POULTRY                 &n​bsp;                   

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• Choice boxed beef values eased 12-cents on Tuesday to $219.68 and are $2.68 lower compared to last week 
• June live cattle futures on Tue. fell $1.325 to close at $99.625—lowest settlement for the contract since April 6, 2017
• USDA mandatory pork carcass cutout value declined 50-cents on Tue. to $70.09 but is 59-cents higher vs. a week ago
• CME Lean Hog Index was $0.72 lower on Tue. at $56.00.  April futures tumbled $2.60, and are $4.325 below the index

Sources: Bloomberg, Dow Jones, AP, DTN, T-storm Weather