Friday, February 28, 2020

Morning Markets: Corn -1. Beans -7. Wheat -1.

MARKET SUMMARY:
The focus of today's session will be month end positioning. All the spot contracts are now in delivery which has caused shifting of fund positions over the past few weeks. There is little doubt this will continue today. Once the calendar turns to March, we tend to see a shift in market attention. Until now most of the attention in the market has been on old crop production and demand. As we start to approach the spring planting season this shifts to more of a focus on new crop production and demand. While planting is still weeks away for much of the Corn Belt, this change in focus can have an impact on commodity futures. For one, this has historically brought about more attention to spring weather outlooks. In turn this has also elevated the amount of risk premium we see in the market in case adverse weather conditions develop. Given the size of last year's crop with the poor weather we had this may be muted this year, and for years to come for that matter. Even without risk premium being added trade will focus more on spring weather outlooks mainly to see if any disruptions will take place to fieldwork such as last year. The USDA is projecting lofty plantings on corn and soybeans and the US will need near perfect weather conditions to achieve these. We also need to remember that a larger amount of spring tillage will need to be done this year given the wet fall last year, not to mention we still have fields that need to be harvested in some regions. We also tend to see an increase in country movement of farm stored inventory at this stage of the year. This movement, or lack thereof, can easily have as much of an impact on the cash market over the next few weeks as futures. To see elevated volatility on a whole at this time of the year is not surprising.

Crude Oil is down $1.31 at $45.78.
US Dollar is down $0.110 at $98.398.
Global Equities: Japan -3.7%, China -2.4%, and Europe -2.9%.
Dow futures is down 1,191 points at 25,767.
EU MATIF Exchange: Corn -0.8% and Wheat -0.5%.
Malaysian Palm Oil: -5.9%.



WEATHER:
• Scattered snow lingers in the eastern Midwest this morning, with varied systems next week and in the 11-15-day time frame (around a drier 6-10 day), while temperatures remain warm throughout for all U.S. crop areas.

OTHER HEADLINES:
• WEEKLY EXPORT SALES: Corn: 865,000mt vs trade estimates of 800 – 1,300; sold 59% of USDA forecast vs 69% average. Soybeans: 339,000mt vs trade estimates of 600 – 900; sold 68% of USDA forecast vs 85% average.
• More than 83,000 cases of the coronavirus have now been confirmed in 52 countries. New Zealand and Nigeria reported their first coronavirus cases.
• Coronavirus fears continues to dominate the headlines. US equities are lower with the Dow down 200 points but nearly 500 points off the overnight lows, having lost nearly 14% since the mid-February highs. Asian markets are down the hardest this morning with China’s Shenzhen closing 5% while European markets were down 3.3%. Crude oil is down $1.45 this morning @ $45.62 while gold is down $20.
• The EPA said on Thursday the agency has not decided how it will respond to a federal court decision addressing exemptions to U.S. biofuel blending laws. The announcement came a day after a Bloomberg News report said the administration had decided to pare the number of exemptions granted to small refineries from U.S. biofuel blending laws in response to the court decision.
• The Buenos Aires Grains Exchange increased its soybean production estimate to 54.5 MMTs, up from 53.1 MMTs. The Exchange estimated 68.5% of the crop is going through the critical yield setting stages. The Buenos Aires Grains Exchange increased its corn production estimate to 50.0 MMTs, up from 49 MMTs.
• U.S. export sales of sorghum were the highest in more than five years last week, with top buyer China booking its biggest purchases of the grain in a month.
• Russia's agriculture ministry has proposed temporarily increasing the country's tariff for sunflower seed exports.

EXPORT NEWS:

• N/A

Have a great day!!!!

Chelsey White
Emery Branch Manager/Originator || Topflight Grain Coop
593 Emery Rd.
Maroa, Il 61756
217-794-2240
E-Mail: cwhite@topflightgrain.com

This material should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by Topflight Grain Cooperative, Inc. Topflight Grain is not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable but is not guaranteed as to its accuracy. Contact Topflight Grains designated personnel for specific trading advice to meet your trading preferences. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by Topflight Grain Cooperative, Inc. ... See MoreSee Less

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