Friday, March 27, 2020

Closing Markets: Corn -3. Beans +1. Wheat +2.

Due to the unfortunate circumstances with COVID-19 and that we are under a stay at home order, we are postponing Scott’s farewell party until further notice. Thank you

Due to the COVID-19 virus we are locking all outside doors at our offices and conducting business through mail, phone and email until further notice. We apologize for the inconvenience.

Market Recap:

Corn futures closed lower today. For the week, CK corn was up 2 ¼ cents while CZ was a penny firmer. Uncertainty continues to envelope the market regarding the coronavirus, demand, weather, U.S. spring acreage and yields. This week, the U.S. has become the world’s epicenter of the coronavirus pandemic. Today it was reported that the U.S. has the most COVID-19 cases in the world, topping 85,000 people confirmed. One of the main storylines dominating the corn continues to be ethanol profitability as crude oil & gasoline futures are well beneath ethanol futures, causing many corn plants to alter/slow production; with some even suspending operations on negative margins. Today, it was announced the EPA is considering delaying the March 31st deadline for oil refineries to comply with 2019 RFS, to help ease the fallout. On a positive note, corn export demand is improving as seen in yesterday’s weekly export sales where corn notched a marketing year high. In addition, USDA announced flash sales of 114,048 tons of corn for delivery to unknown destinations during the 19/20 marketing year this morning. Corn feed demand is also expected to improve as DDG production slows. Next Tuesday will bring the updated U.S. stocks and acreage reports. The trade expects to see March 1st corn stocks near 8.125 billion bu., well below the past three years while acres are expected at 94.3 million vs. 89.7 million acres last year. With spring planting season approaching, market participants are monitoring the weather- though it’s taking a backseat to other storylines at the moment. The Midwest forecast currently calls for a rainy/wet weekend throughout most of the region, followed by a 2nd system expected to move through the middle of next week (favoring the southern areas). A 3rd system is then expected late next week for the western growing areas.

Soybeans started the day firmer but ended the session mixed on position squaring in front of the weekend and next week’s USDA reports. For the week, the nearby SK contract was up 19 cents while SX improved 16 cents. Traders continue to monitor global supply disruptions for soybeans and soymeal due to the coronavirus outbreak. Brazil’s Mato Grosso is dealing with Covid19 issues while Argentine port inspectors are requesting a 15-day work stoppage. Per the Rosario Grain Exchange, the supply of soybeans to Argentine crushing plants is estimated to be down by half and falling, The timing of these delays is proving challenging for China, as their soymeal inventories are reportedly at their lowest level in 10 years, This disruption in output could change global trade flows, turning importers to the U.S. to fill the gap. Thursday’s weekly bean export sales were solidly higher on the week, with China listed as a primary buyer. In addition, USDA announced a flash sale of 63,290 tons of beans sold to Mexico in 19/20 this morning. Harvest continues to progress in Brazil, though weather maps indicate they will see more rainfall this weekend & next week. Most crop areas in Argentina have also seen scattered showers and they are expected to continue through next week. Tuesday’s upcoming USDA reports are expected to still show ample stocks of U.S. beans as of March 1st, near 2.241 billion bu. and an acreage projection of 84.7 million vs. 76.1 million last year (remember USDA put numbers together on acres before the market rearranged itself on ethanol demand.)

Have a great evening!!!!

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

2 days ago

Friday, March 27, 2020

Morning Markets: Corn -2. Beans +3. Wheat +11.
Due to the unfortunate circumstances with COVID-19 and that we are under a stay at home order, we are postponing Scott’s farewell party until further notice. Thank you

Due to the COVID-19 virus we are locking all outside doors at our offices and conducting business through mail, phone and email until further notice. We apologize for the inconvenience.

MARKET SUMMARY:
One of the most debated topics in the market right now is demand. The US has seen an increase in corn demand in the export market over the past few weeks with most interest on China. China was a main buyer of US corn in the weekly export sales data and a main reason for the marketing year high on bookings. While this is positive news, it may simply negate the losses that are expected to take place in domestic corn demand, mainly ethanol. Ethanol plants continue to close across the United States and drop projected demand. Right now, it appears as though 300 million bu of corn demand will be lost from ethanol this year which would push ending stocks above 2 billion bu. This will have a trickle effect and impact new crop ending stocks on corn as well. If production estimates on corn are correct a new crop carryout of 3 billion bu is not out of the question. There are many moving parts in these prediction models though, with acres and yields being the main ones. The same scenarios are being made in soybeans where the US is seeing heavy competition from South America. This is not uncommon as Brazil is in the midst of its harvest when it normally is the origination point of choice. Demand typically increases once the harvest in that regions passes. Unlike corn, we may be underestimating domestic soybean usage though as crush has been on the rise. The world's largest soy meal exporter, Argentina, is not exporting meal at the present time which may bring demand to the US. The US will also see more meal demand domestically as ethanol plants halt operations and distiller grains become scarce.

Crude Oil is down $0.06 at $22.54.
US Dollar is down $0.008 at $99.36.
Global Equities: Japan +4.3%, China +0.6%, and Europe -4.0%.
Dow futures is down 667 points at 21,681.
EU MATIF Exchange: Corn -0.2% and Wheat +0.7%.
Malaysian Palm Oil: +0.6%.
Dalian: Corn +0.5%, Soybeans +2.4%, Meal +0.6%.


WEATHER:
• NOAA’s 6 to 10 and 8 to 14-day maps are generally cool with below normal moisture forecasted for most off the central and eastern Corn Belt. Rains are expected to move across the Belt this weekend with rainfall totals of .5 to 1.0” expected, with heavier totals possible in the Southern Midwest into portions of the Eastern Belt.

OTHER HEADLINES:
• Farmers financially hurt by coronavirus will have an easier time getting federal loans after the USDA announced it will relax its loan process. The USDA's Farm Service Agency said it also is extending deadlines for producers to deal with loans, including allowing financially troubled or delinquent farmers to be considered for loan deferral.
• The U.S. EPA is considering whether to delay the deadline for oil refineries to comply with the nation's biofuel regulation past March 31, to help the industry cope with fallout from the coronavirus.
• Yesterday’s Hogs and Pigs Report showed all hogs as of March 1st at 104% of a year ago. Kept for market was reported at 104% and kept for breeding was reported at 100%. It is interesting to note farrowing intentions for March-May was pegged at 100% and June-Aug was estimated at 96% of a year ago. An indication pork producer is possibly preparing to scale back production.
• A labor union representing Argentine grains port workers on Thursday asked the government to suspend exports. The URGARA union said the coronavirus pandemic was severe enough to justify suspending port activities.
• Increased demand for eggs in the United States has sent egg prices soaring in recent weeks as consumers scramble to stock up on staples due to coronavirus shutdowns. Wholesale prices of "Midwest large" eggs hit an all-time high of $3.09 a dozen, triple their level in early March.
• A three-week lockdown in India aimed at stopping the coronavirus is preventing perishables from reaching its teeming cities, pushing up prices and forcing some farmers to feed their ripening produce to their animals instead.

EXPORT NEWS:

• 163,290 metric tons of soybeans for delivery to Mexico during the 2019/2020 marketing year.
• 114,048 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year.

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
Web: www.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

3 days ago