Coronavirus Concerns Push Markets Lower

Good Morning from Allendale, Inc. with the early morning commentary for March 9, 2020.

Grain markets dropped sharply as the fast-growing coronavirus continued to spread throughout the world, extending losses in corn and soybean futures for a third session in a row.  Energy and equity futures were also sharply lower as pandemic fears continue to rise.  The virus has infected more than 106,400 people in at least 95 countries and killed over 3,500 people.

Last week, May corn futures were up 8 cents, May soybeans down 3 cents, May wheat down 11.25 cents, May soymeal was down $0.70 and May soyoil was up 2 points.

US Acreage numbers will be updated later this month in USDA’s prospective plantings report. To help prepare for that report we are conducting our annual acreage survey, and we could use your numbers. Please take a moment to tell us your planting intentions, and register for the free results webinar too. Thank you!

Average estimates for tomorrow’s USDA Supply and Demand report were compiled by Reuters. Analysts expect 2019/20 corn ending stocks at 1.888 billion bushels, soybeans 0.426 bb, and wheat stocks at .944 bb. All of these numbers are close to USDA’s February numbers.

World ending stock numbers are expected to show corn stocks of 297.25 million tonnes, soybeans 99.33 MT, and wheat 288.47 MT. South American production numbers are expected to rise minimally.

China brought in 13.51 million tonnes of soybeans in January and February (11.83 million tonnes a year earlier), according to data from the General Administration of Customs.  China has already granted tariff exemptions to some crushers to import U.S. soybeans, Reuters reported.

Trump administration has requested an additional two weeks to respond to a federal court ruling that questioned the legitimacy of its controversial biofuel waiver program for oil refineries, according to a court filing.  The DOJ asked the court to extend its deadline to respond from March 9 to March 24.

CFTC Commitments of Traders showed funds new net position short -84,939 corn contracts, short -35,768 soybean contracts, long +15,404 wheat contracts, long +709 live cattle contracts and long +24,106 lean hog contracts.

The USDA said it would stop the transportation of pigs if the U.S. detects a case of ASF in an effort to stop the disease from spreading, the agency said in a statement. The halt would prevent farmers from delivering pigs to slaughterhouses where they are turned into bacon and pork chops.  “USDA plans to pay for virus elimination at a uniform, flat rate, based on the size of affected premises,” the agency said.

Dressed beef values were higher with choice up 0.22 and select up 1.51.  The Feeder cattle index was at 133.87.  Pork cut-out values were down 0.18.

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