Morning Commentary

May corn down 2 at $3.2875

May beans down 4 ¾ at $8.495

The DOW is up

USD is stronger

Crude oil down $1.08 at $27.26

Good morning,

Corn bulls will be trying to pull the market off fresh contract lows as fears about coronavirus continue to circulate. The corn market lost another -15 cents last week, and since late-January, it has lost about -70 cents. Bulls are pointing to improved export demand as China purchased another round of  U.S. corn late last week. There’s also good demand coming from the livestock sector. Don’t forget, the USDA is out with its monthly supply and demand report on Thursday and the markets are closed on Friday. The short-term trend for May corn is negative. The market is poised for a drop to weekly support at 320. Sustained action over 345.75 is the minimum needed to improve the outlook.

Soybean prices hit their high water mark in 2020 on the first trading day of the year and have since tumbled by -$1.20 per bushel.  Perhaps bulls rally prices to the high end of the range if South America stumbles with exports or Chinese buyers start more aggressively purchasing U.S. supply. Bears could pressure prices lower if U.S. acres creep higher like many now anticipate and or the coronavirus headlines stay negative and keep global growth fears in the mix and the funds leaning bearish the macros. The trend for May beans is neutral-negative. Stable action outside 847.5-875.5 is needed to provide fresh trending targets. There will be sell stops in the day session around 840.

The U.S. Department of Agriculture’s Commodity Credit Corporation Friday announced the borrowing rate-based charge for April is 0.625 percent, down from 1.500 percent in March. The rate is effective April 1-April 30, 2020.

U.S. poultry company Sanderson Farms Inc on Thursday said it is reducing chicken processing to 1 million birds a week from 1.3 million over the next four weeks in Moultrie, Georgia, after ordering more than 400 slaughterhouse workers who seem healthy to stay home as a precaution against infection by the novel coronavirus. The move could eat into margins at the company and is an early sign of strain in the U.S. food supply chain at a time of surging consumer demand at grocery stores. Chief Executive Joe Sanderson said on a conference call said the workers live in Dougherty County, a “hotbed” of coronavirus cases, although there are no indications they are not healthy, he said. The county has more than 500 known cases of the illness and the most deaths of any county in Georgia, the top U.S. chicken-producing state. The United States is the world’s largest producer and second largest exporter of poultry meat. The country produced 9 billion chickens for meat in 2018, and 15% came from Georgia.(Reuters)

Kraft Heinz has moved to halt production at three different plants because of a decline in demand stemming from the new coronavirus outbreak, its Chief Executive Miguel Patricio on Friday. Patricio said all the factories, two in the United States and one in the United Kingdom, are in the food service segment and saw demand drop due to the pandemic, mainly in Europe. (Source: Reuters)

A bipartisan group of 80 House lawmakers on Thursday asked the Small Business Administration to ensure that farmers and agribusinesses qualify for the SBA’s Economic Injury Disaster Loan program. The lawmakers, led by Reps. Josh Harder (D-Calif.), Antonio Delgado (D-N.Y.) and Anthony Brindisi (D-N.Y.), said the stimulus expanded the SBA’s program so farmers could access emergency finance. However, the agency has since issued guidance that doesn’t grant them eligibility. The agency did make farmers eligible for a program that helps small businesses keep their employees paid, known as Paycheck Protection Program, which is open to those with 500 or less workers. One limiting factor is that payroll expenses can’t include salaries for foreign workers or independent contractors, according to the American Farm Bureau Federation . About 50 percent of farmworkers are not U.S. citizens or permanent residents, potentially leaving many fruit, vegetable and dairy operations ineligible for the aid. Recall that Congress allocated $9.5 billion for USDA’s coronavirus response fund , and farmers and ranchers will also qualify for any relief program the department deploys using its $30 billion borrowing authority from the Commodity Credit Corporation (the same financial institution that funded trade relief payments). USDA’s Farm Service Agency has relaxed the terms of its direct and guaranteed loans during the pandemic, as well. (Source: Politico)


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