Morning Commentary

May corn down 3 ¾ at $3.185

May beans down 5 ½ at $8.27

The DOW is down

USD is stronger

Crude oil down $6.77 at $11.50

Good morning,

Corn bears continue to point towards “demand” destruction with ethanol production thought to be down by about -35% to -45% and feed usage now suspect with many meat processing plants reducing production or in some cases temporarily closing their doors.  At the same time, bears are talking about +95 million U.S. corn acres being planted in 2020 vs. 89.7 million corn acres planted in 2019 vs. 88.9 planted in 2018 vs. 90.2 million planted in 2018. In other words, bears are pointing to extreme demand uncertainty, an overly burdensome balance sheet at +2.0 billion bushels, and U.S. producers about to plant a much larger number of acres than we’ve seen the past few years. The combination of weak demand, bulging surplus, and more acres going in the ground has pressured prices to fresh contract lows.

Soybean traders are trying to sort out a multitude of variables. On one hand, we have record-setting domestic crush numbers but with restaurants closed soybean oil demand is weak and supply is aggressively backing up in the pipeline. At the same time, DDGs supply is limited and prices high as several corn-based ethanol plants are closed and or operating under reduced capacity. Bulls argue that this should be increasing the demand for soybean meal, and it is overseas.

Responding to the economic impact on agriculture brought on by the coronavirus pandemic, the Trump administration will provide an initial aid package of roughly $16 billion in direct payments to farmers and ranchers and another $3 billion in food purchases. The program will provide $9.6 billion in direct aid to livestock producers, $3.9 billion for commodity crop producers, $2.1 billion for fruit-and-vegetable growers and another $500 million for farmers who grow various niche products. According to Senator John Hoeven, R-N.D., chairman of the Senate Agriculture Appropriations Committee, farmers will receive one payment based on a formula detailing price losses from Jan. 1 to April 15, and paid on 85% of that price loss. Commodities eligible for the program must reflect at least a 5% price decline within that time. A second part of the formula involves projection of potential losses from April 15 through mid-October and farmers will be paid based on 30% of those expected market losses.

China has confirmed a new case of African swine fever in the eastern province of Jiangsu, the agriculture ministry said on Friday. The outbreak, detected in Muyang county in Jiangsu, was founded in 17 hogs illegally transported from outside the province, the Ministry of Agriculture and Rural Affairs said in statement. (Source: Reuters)

With coronavirus severely affecting the potato supply chain, a farm in Idaho is giving away about 2 million potatoes so they don’t go to waste. First come, first served. Ryan Cranney, CEO of Cranney Farms in Oakley, Idaho, about 150 miles from Boise, told CNN the majority of his potatoes from the farm are typically sold to grocery stores and to restaurants to make french fries. Because of stay-at-home orders throughout the nation, Cranney said the food service demand is down significantly, leaving him with six months worth of crop. Cranney Farms also grows sugar beats, wheat, barley, mustard seeds, corn and alfalfa and they raise cattle, but Cranney said their potato crop and cattle have been hit the hardest. Initially, Cranney said he posted about the crop on Facebook, urging members of his community of about 700 people to show up at the farm and grab as many potatoes as they want. But now, people are driving hours to pick some up.


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