Morning Commentary

May corn up 5 ¾ at $3.41

May beans up 14 ¼ at $8.3975

The DOW is down

USD is stronger

Crude oil up $1.58 at $21.95

Good morning,

CORN continues to struggle as the ethanol industry is battling it on all fronts.  We have been told of three Iowa plants already shutting down for the foreseeable future, if not for good.  Margins are the worst they have ever been and this is due to RBOB futures (Gasoline) being 33 cents cheaper than Ethanol futures.  CORN LP continues to run; however at a reduced rate. The short term trend for May corn is bearish.  Sustained trade below $3.41 signals a drop to $3.215.  A close over $3.57 is the minimum needed to improve the outlook.

Soybeans: The trend for May beans is bearish.  Sustained action under 819.5 suggest a drop to 796. A close over 855.25 is the minimum needed to improve the outlook.

A bipartisan group of 24 senators is asking FEMA to coordinate with USDA and the Interior Department to deploy federal workers trained in emergency response to rural communities overwhelmed by the pandemic. The Forest Service and Bureau of Land Management are “uniquely qualified,” the senators wrote. And the Farm Credit Administration, which oversees a network of government-backed lenders for the ag sector, called on institutions to work with borrowers whose operations are affected by the virus. FCA Board Chairman Glen Smith said lenders can extend the terms of loan repayments, restructure debt obligations and ease some loan documentation terms for certain borrowers. USDA also announced an initiative to deliver 1 million meals per week to rural students whose schools have closed because of the virus. The department is partnering with PepsiCo and the Baylor Collaborative on Hunger and Poverty, a food logistics company, to provide boxes with five days’ worth of healthy, shelf-stable, individually packaged foods. (Source: Politico, USDA)

Malaysia has directed palm plantations to continue operations even as the country shuts businesses to prevent the spread of the coronavirus, a producer group said on Wednesday, ensuring steady supplies of the tropical oil to global markets. Malaysia is the world’s second-largest producer of palm oil, which is used in everything from cosmetics to cookies and accounts for about 65% of global edible oil exports. The country has closed its borders and restricted internal movement after infections climbed to the highest in Southeast Asia on Wednesday. Closure of palm plantations as a part of the measures earlier had caused concerns in top importers but the Commodities Minister on Wednesday agreed to exempt palm plantations from the restricted movement order.

With the spread of the novel coronavirus around the U.S., photographs circulating of empty grocery store shelves have caused some shoppers to worry about whether there are food shortages ahead. Short answer is NO! America is not going to run out of food. Leah Douglas over at Fern’s Ag Insider talked to Dr. Ananth Iyer, a professor of supply chain management at Purdue University and director of the university’s Global Supply Chain Management Initiative, to gain a better understanding of America’s grocery supply chain. The bottom line about the nation’s food supply, Iyer says, is optimistic: “Getting supply of the things people need should be the lowest in the list of worries at this point in time.” As he sees it, supply chains are still adjusting the massive disruptions and empty shelves will soon be “yesterday’s news.”

What’s in the U.S. Coronavirus Relief Bill
The U.S. government passed a more than +$100 billion coronavirus aid package yesterday that will provide free coronavirus testing, paid and emergency sick leave, unemployment benefits, and food and medical aid to people impacted. The exact cost has not been tallied, but the Joint Committee on Taxation estimated that just sick leave and family leave provisions alone would cost $105 billion. Here are the major elements:

Free Coronavirus Testing – The bill would provide free coronavirus testing for those who need it. The legislation would require private healthcare insurers to pay for all testing costs for beneficiaries with medical coverage. It also would cover testing costs for people who receive health care through government-run programs such as Medicare and Medicaid. It provides $1 billion to the National Disaster Medical System, a coordinated healthcare system and partnership involving several federal agencies, to cover costs for people without medical insurance.

Paid Sick Leave and Emergency Leave for Some Workers – Governments and private businesses with fewer than 500 employees are required to provide up to two weeks of paid sick leave for those who miss work due to coronavirus or for those who have to take care of family members affected by the outbreak. Workers could take another 10 weeks off, if needed, at two-thirds of their pay. Businesses and self-employed workers would be able to claim refundable tax credits to cover the expense.

The U.S. Labor Department could exempt companies with fewer than 50 workers if they risk going out of business. Additionally, it would not apply to large employers like McDonald’s that do not provide paid sick leave. Some large employers, including Walmart and Darden Restaurants, have announced they will do so voluntarily. The rules would only apply to coronavirus-related illnesses and would last only through the end of 2020.

Enhanced Unemployment Benefits – The bill would cover costs for states that extend unemployment payments for six months beyond the usual six-month time limit. The benefit would apply only to states that see their unemployment rates rise by at least +10%. They would get interest-free loans, if needed, to cover benefit costs under the bill. It also would encourage employers to avoid layoffs by reducing employees’ hours instead. Affected employees would get unemployment benefits to offset those lost wages.

Food Assistance – The bill provides $250 million or home-delivery meals to seniors, $400 million for food banks, and $500 million to help feed mothers and young children. It would allow schools that provide free breakfasts and lunches to low-income students to distribute those meals to go, rather than requiring them to be eaten in a cafeteria. (Sources: Reuters, Politico)


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