Morning Commentary

May corn down 3 ½ at $3.3725

May beans down 12 at $8.74

The DOW is down

USD is stronger

Crude oil down $.23 at $20.25

Good morning,

President Trump warned of a “painful” two weeks ahead and indicated as many as 240,000 Americans will die on account of coronavirus. After posting their worst quarter since 2008, global equities are beginning the new quarter with fresh declines. Traders are showing disappointment with the loss of dividend income. The US dollar rallied Wednesday as demand for riskier currencies declined.

Corn: Stocks in all positions on March 1, 2020 totaled 7.95 billion bushels, down 8% from March 1, 2019. Of the total, 4.45 billion bushels were stored on farms, down 13% from a year earlier. Off-farm stocks, at 3.5 billion bushels, are up slightly from a year ago. The December 2019 – February 2020 indicated disappearance is 3.45 billion bushels, compared with 3.32 billion bushels during the same period last year. Corn planted area for all purposes in 2020 is estimated at 97.0 million acres, up 8% or 7.29 million acres from last year. Compared with last year, planted acreage is expected to be up or unchanged in 38 of the 48 estimating states.

Soybean bulls were hoping to see a bigger jump in price after the USDA tossed out the 83.510 million planted acre estimate vs the 85 million most in the trade were anticipating. Bears point to the fact this is still aggressively higher than last year’s 76.100 million acres and there’s increasing talk in the farm communities of producers making some last-minute shifts to more soybean acres. Meaning the USDA’s recent estimate might prove to be a bit conservative after producers make some last-minute adjustments. Bears are also pointing to some demand headlines that might keep a nearby lid on rallies i.e. a strong U.S. dollar, China buying canola imports from China, no major logistical hiccups as of yet out of Argentina and Brazil, in fact, farmers in Brazil are enjoying record high soybean prices because of the meltdown in currency compared to the dollar. The USDA’s March 1 soybean stocks estimate of 2.253  billion bushels is 474 million bushels less than a year earlier and ending stocks could ultimately be tighter than many are forecasting, especially if the Chinese come back to the U.S. for any sizable demand.

JBS USA has announced that it will temporarily reduce beef production for two weeks at a Pennsylvania facility as a precautionary measure amid coronavirus concerns. The decision was made after several senior management team members displayed flu-like symptoms and marks the first U.S. meat plant to cut operations due to worries over the coronavirus pandemic. It is not known by what scale production will be reduced or whether JBS’ employees are being tested for Covid-19. The plant in Souderton, Pennsylvania, has more than 1,000 workers and is the largest beef facility east of Chicago. JBS said the facility will continue to run “fabrication and ground beef operations” and anticipated the facility will return to normal operations on 14 April. The announcement comes after JBS reportedly said it was considering suspending operations at some slaughterhouses in Brazil due to supply chain issues from China. In a previous report, meanwhile, Reuters cited that JBS SA said the coronavirus epidemic could cause container shortages, port disruptions and other logistics issues, yet trade flows should remain strong due to Chinese demand. (Source: FoodBev Media)

Ninety percent of farmers and ranchers say they expect COVID-19 to impact their businesses, according to The Coronavirus Impact Study, conducted by Farm Journal March 16-24. The exploratory survey garnered initial reactions from 679 farmers, ranchers and agricultural workers representing 43 states. While only 30% of respondents said they were concerned about becoming sick with the new coronavirus, farmers and ranchers say they are worried about the uncertainty of commodity markets, the financial outlook for their businesses and the health of their families and their labor force.

A bipartisan group of 19 senators are asking to delay the new NAFTA agreement from taking effect on June 1, calling the start date “highly aggressive” even if the coronavirus pandemic wasn’t taking up most of the attention in Washington and around the country. In a letter to U.S. Trade Representative Robert Lighthizer, Senate Finance Committee members said the trade deal shouldn’t enter into force until it is clear that the U.S., Canada and Mexico are all fully in compliance. The Trump administration was already seen as behind schedule for launching the USMCA in two months as planned, and all three countries have been singularly focused on containing the coronavirus and stemming the economic fallout. “We ask you to delay the proposed June 1 entry into force and work with Congress and stakeholders to determine a more feasible timeline,” Chairman Chuck Grassley (R-Iowa), ranking member Ron Wyden (D-Ore.) and other members wrote. (Source: Politico)

Two of Brazil’s largest fuel distributors said on Monday they are cutting the amount of ethanol they will buy from local suppliers to adjust to a slump in demand amid the coronavirus lockdown in Latin America’s largest economy. Brazil’s number 1 fuel distributor, BR Distribuidora, said it will reduce the amount of ethanol it buys from Brazilian mills to levels that are below the minimum defined in contracts, due to an “atypical situation” created by the COVID-19 pandemic. (Source: Reuters)


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