May corn down 1 ¾ at $3.7575
May beans up ½ at $8.7675
The DOW is down
USD is weaker
Crude oil down $1.18 at $33.18
Corn bulls are again talking about rumors of Chinese buying, some dry fields in portions of Argentina and a full-season of weather uncertainty ahead here in the U.S. Unfortunately, bears are quick to point towards the ongoing headwinds in China associated with coronavirus, the global macro market slowdown, the guts being ripped out of the crude oil market, CONAB now forecasting a record-setting corn crop in Brazil, and the USDA talking about +15.0 billion bushels of corn being produced in the U.S. during 2020 with +2.5 billion in ending stocks. The short term trend for May corn is neutral-negative. Stable action outside 373.75-386 is needed to provide fresh trending targets.
Soybean traders see no adjustments by the USDA to the U.S. balance sheet which is probably good news for the bulls as many believed the USDA could have taken a more negative view of U.S. exports considering the coronavirus headlines impacting China. Unfortunately, this could give the bears a bit of leverage as they now wonder if that move will be coming in the next report? The USDA did bump both its Argentine and Brazilian crop estimates higher by +1 MMTs each. Bulls are quick to point to the fact the USDA still hasn’t released the resurveyed data from the U.S. and or factored in what the Chinese might buy in accordance with the “Phase 1” trade deal, which could certainly be a massive bullish tailwind when the card finally crops. The trend for May beans is negative. A close under 859 should fuel a drop to 846.75. A close over 894.25 is needed to improve the outlook.
Beef production is pegged at 27.7 billion pounds, up +220 million from March, on a faster than expected slaughter pace and heavier weights. Per capita consumption was also up at 57.9 pounds per person. Imports were higher, up +35 million pounds to 2.915 billion, while exports were lower, down -35 million pounds at 3.265 billion. The average steer price was cut -$2.50 to $117 per hundredweight. Pork production is seen at 28.985 billion pounds, up +100 million from last month and based on first quarter slaughter data. Pork exports saw a big increase, up +375 million pounds to 7.75 billion, based on recent trade data and strong international demand for U.S. pork products. The hog price forecast is reduced -$1 to $48.00 on pressure from large hog supplies.
Bayer has opened a $100 million state-of-the-art corn breeding greenhouse facility in Marana, Arizona. The unique site will be crop-specific, serving as a global product design center for corn, bringing the breeding process indoors in order to accelerate the development of innovative and sustainable seed products and agricultural solutions through proprietary seed chipping, advanced marker technology, automation and data science. Despite focusing on corn, a typical Midwestern crop, this site has been located in the desert of Arizona to leverage more days of warmth and sunlight for year-round growing, and three-to-four crop rotations per year. The 300,000-square-foot greenhouses are the most advanced for the company, and are designed to sustainably use inputs throughout the research process. Water used will be recycled, 100 percent of the harvested materials will be composted, and beneficial insects will be used to reduce the rate of pesticide applications. Although costly, this facility could be key to a pivot for Bayer which has been beset by a range of challenges since it completed its acquisition of Monsanto for $63 billion in 2018. (Source: Oilseed and Grain)