Morning Commentary

May corn down 7 ½ at $3.365

May beans up 4 at $8.2825

The DOW is down

USD is stronger

Crude oil down $2.29 at $24.66

Good morning,

Corn bulls are really feeling the pressure from the fallout in the outside macro space particularly the negative headlines associated with crude oil and now massive demand uncertainties. Keep in mind, several large funds and investment banks playing the extreme fallout in crude oil are cross-hedging in some capacity via short corn positions. The bears have their sights set on prices falling to sub-$3.30 levels. Also continuing to add to the headwind is a strong U.S. dollar in comparison to our global export competitors. For what it’s worth, the planters are starting to roll down south, Texas is close to 30% planted, Louisiana closing in on 5% planted, and Mississippi, Alabama and Georgia all getting started.  

Soybean bulls are pointing to crop estimates in both Argentina and Brazil pulling back a bit. Some are thinking the USDA might be +2 MMTs too high in Argentina and +1 to +2 MMTs too high with the Brazilian estimate. Bulls are also pointing to good crush demand here in the U.S. and the fact there could be more meal demand as the ethanol industry tries to work through serious headwinds. There’s also the Chinese “wild-card” that is thought to still be somewhere in the deck. Unfortunately, the spillover and contagion associated with coronavirus headlines and the massive setback in global growth could prove to be too heavy a burden and continue to keep a lid on most nearby rallies. Inc. said independent merchants would be unable to ship products other than medical supplies, household staples and other high-demand products to its warehouses until April 5 as the e-commerce giant prioritizes the delivery of these goods during the coronavirus pandemic. Amazon’s decision comes at a tough time for a number of sellers. Many struggled to replenish their stocks on the platform when Chinese factories shut down in response to the outbreak. Some of those factories have since reopened but now, sellers say they will struggle as they will not be able to rely on Amazon’s logistics network to store new batches of goods and ship to customers for three weeks. Independent merchants can sell on Amazon without relying on the company’s fulfillment centers, but that means making arrangements to stock their goods in other warehouses and independently arranging delivery for customers. Amazon said that products that are already on their way to its warehouses will be accepted. (Source: The Wall Street Journal)

The Renewable Fuels Association (RFA) is asking the White House to help the struggling biofuels industry. “With many ethanol plants on the verge of shutting down, we implore the Trump Administration to take action that equitably supports all liquid fuel industries—including ethanol producers—during this time of unprecedented  market uncertainty and unrest,” RFA CEO Geoff Cooper said in a new release. RFA chief economist Scott Richman tells Brownfield the easiest and most positive thing the administration could do for biofuels is to announce that it will not appeal the 10th Circuit Court decision on small refinery waivers. Richman says they may request other assistance from the administration as well. “There may need to be other steps as we go along, because the things that have happened in the last couple of days in the markets are not good—but we’re just going to have to see how that evolves.”(Source: Brownfield Ag)

Argentina’s export chamber on Monday reported delays in shipping cargo out of the country’s primary port in Rosario because of confusion over a government order to seal its borders to contain the coronavirus.  Argentina is a major exporter of soybeans and the world’s top seller of the processed beans as soy oil and meal, and Rosario port on the Paraná River handles about 80% of those exports. President Alberto Fernández announced on Sunday that Argentina’s borders would close to foreigners for 15 days in a bid to stem the spread of the coronavirus. Gustavo Idígoras, head of CIARA-CEC export company chamber, said that the measure had caused hiccups at Rosario. A source from the agro-export sector, who asked not to be identified, said the issue had been created by “health authorities strictly applying the border closure”, despite the ban not having been applied to cargo. The delays come at a time when the export season is not yet in full swing. Argentine farmers have just started harvesting corn and the soybean harvest will begin in the coming weeks. (Source: Reuters)


Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now