Coronavirus Damage Dominates Markets

Good Morning from Allendale, Inc. with the early morning commentary for March 30, 2020.

Grain Markets were mixed overnight with soybean and wheat futures higher as Russia plans to cap exports, raising optimism of more U.S. wheat sales.  Soybeans jumped higher on increased supply tension in South America due to increased Coronavirus cases.  Corn futures slid lower as energy prices pushed lower on demand concerns.

Last week, May corn futures were up 2.5 cents, May soybeans up 15.25 cents, May wheat up 33.50 cents, May soymeal was down $1.84 and May soyoil was up 132 points.

President Trump said he was extending the administration’s social-distancing guidelines for another 30 days through the end of April, after saying for days that he was hoping to open up the country in the coming weeks.  He also said the peak of the death rate was expected to hit in two weeks. “Nothing would be worse than declaring victory before victory is won.  It’s very important that everybody strongly follow the guidelines,” he added.

The pandemic will not end until enough of the population is immune to the disease (at least 60%, experts say) – either by surviving it and becoming immune, which may or may not happen or through a found vaccination.  A high number of cases all at once though, could overwhelm our hospitals and experts say a vaccine likely will not be ready for more than a year.  (Fox News)

Average estimates for tomorrow’s Prospective Plantings and Grains stocks reports have been released by newswires. The Bloomberg poll shows corn acreage at 94.1 million, soybeans 85.0, and all-wheat 45.0. USDA’s Feb Ag Forum numbers were 94 million for corn, 85 million for soybeans and 45 million for all-wheat, so almost no change is expected.

Grain Stocks are estimated at 8,134 million bushels of corn, 2,228 million bushels of soybeans, and 1,430 million bushels of wheat. The reports will be released tomorrow at 11:00 AM CDT.

CFTC Commitments of Traders showed funds new net position short -108,549 corn contracts, short -2,444 soybean contracts, long +17,670 wheat contracts, short -3,055 live cattle contracts and long +23,130 lean hog contracts.

The supply of soybeans to Argentine crushing plants is down by half and falling as municipalities citing health concerns defied a government order that they allow cargo trucks to reach the plants, the Rosario grains exchange said.  “Some municipalities are closing themselves off to grains trucks while others are opening. The situation is changing day by day but the effect on the supply of soybeans to the crushing plants that are affected has clearly been negative,” said Emilce Terre, chief economist at the Rosario grains exchange.

The U.S. EPA unveiled measures to help oil refineries cope with fallout from the coronavirus outbreak, including waiving anti-smog requirements for gasoline and extending the deadline for small facilities to show compliance with the nation’s biofuels law.  The American Fuel & Petrochemical Manufacturers cheered the EPA’s decision to allow for sales of winter-grade gasoline past the cutoff.  “Refineries are already transitioning to producing summer grade gasoline, but with the unprecedented decline in gasoline consumption, there is simply not enough consumer demand to draw down existing inventory by the summer RVP deadline,” said Derrick Morgan, AFPM’s senior vice president of federal and regulatory affairs.  (Reuters)

Last week, April live cattle futures were up $2.30, June live cattle futures down $0.17, while May feeder cattle futures were up $2.67.  Allendale noted previously the strong end user buying from 3/12 to 3/23 pushed choice beef up to $51.31. Over the last five days, choice beef showed losses of $5.21 was removed from the peak price.

Dressed beef values were mixed with choice down 0.73 and select up 0.21. The Feeder cattle index is 130.44. Pork cut-out values were down 3.82.

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