May corn up ½ at $3.4425
May beans up 13 ½ at $8.76
The DOW is up
USD is weaker
Crude oil up $.27 at $22.90
CORN prices will be trying to recover this week after tumbling -20 cents and testing the $3.30 level. Goldman research was floating around early last week was also providing additional evidence for a short corn position. The massive break in crude oil and what looks to be a significant fallout in the ethanol space puts corn demand in question. In addition, strength in the U.S. dollar and what could be a decline in livestock demand into the teeth of a global recession also brings about demand uncertainties. The short term trend for May corn is negative but the market is nearing a trend turning point. Sustained action under 340.75 suggests a drop to new lows for the move. A close over 357 is needed to improve the outlook.
SOYBEAN bulls are keeping a very close eye on the coronavirus headlines and the impact it might have on transportation and deliveries out of South America. The trend for May beans is neutral. Sustained action outside 838-876.5 would provide fresh trending targets. Buy stops will be triggered above 873 in the day session.
Demand for oilseeds in China are expected to rise in 2020-21 as the country’s hog and sow herds begin to recover from the impact of African swine fever, according to a March 19 Global Agricultural Information Network report from the US Department of Agriculture (USDA). Total oilseeds demand is forecast at 148 million metric tons, up from 145 million in 2019-20, while the gradual recovery of the swine and soybean crush sectors will also increase soybeans imports to 86 million metric tons compared to an estimated 84 million on 2019-20 and up from 82.5 million in 2018-19, the USDA said. The projected increase can also be attributed to the recent phase one trade agreement between the United States and China, which includes elimination of the 25% tariff on US soybeans. The tariffs had been in place since July 2018, leading to reduced soybean imports to China from the United States for an 18-month period. The novel coronavirus (COVID-19) pandemic, which originated in Wuhan, China, and was first detected in December 2019, will have a significant impact on vegetable oil demand, according to the USDA. “Vegetable oil use, which has shown robust growth in recent years due to a booming hotel, restaurant and institutional sector, is expected to grow more slowly in both 2019-20 and 2020-21 due to the impact of COVID-19 on demand for hotel and culinary services,” the USDA said. The report said domestic oilseed production is forecast to increase very slightly, from 59.9 million metric tons in 2019-20 to 60.6 million in 2020-21, the USDA said. Soybean output is projected unchanged at 17.3 million metric tons, based on stable acreage and average yield. Likewise, rapeseed production is projected at an unchanged 13.2 million tonnes due to flat yield and planted area. (Source: World Grain)
The USDA’s Cattle on Feed numbers indicate tighter market ready numbers later this year. Placements into feedlots during February 2020 were 1.711 million head, down -8% from February 2019 on seasonal improvements in pasture conditions and concerns about profitability. Most of the cattle that were placed weighed between less than 600 pounds to as much as 900 pounds and will mostly head to market starting this summer. 1.775 million cattle were marketed in February as higher placements from last year were sold, including some at sharply lower prices late in the month. That’s a year to year increase of +5%. The total number of cattle on feed on March 1st was up slightly on the year at 11.806 million head. (Source: Brownfield Ag)
The USDA Food Safety and Inspection Service (FSIS) has updated its Export Library for China to reflect expanded access for U.S. beef and pork. These changes were among the provisions negotiated in the U.S.-China “Phase One” trade agreement. U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom in a statement said the changes “will benefit pork exporters looking to expand their business in China, as well as producers and everyone in the U.S. supply chain.” But he notes, U.S. pork and beef still face retaliatory duties in China, but a tariff exclusion process implemented by the Chinese government earlier this month is providing some level of relief. “While elimination of all retaliatory duties is still the best way for China to level the playing field for U.S. red meat, the exclusion process is expanding opportunities for importers and for the U.S. industry.” (Source: Successful Farming)