Demand Concerns Drag Down Grain Markets March 2, 2020
Good Morning from Allendale, Inc. with the early morning commentary for March 2, 2020.
Grain markets moved slightly higher as any hopes of market support was capped by remaining fears of the spread of coronavirus. Trade will continue to watch for progress in containing the spread of the coronavirus and reducing the negative impact on the global economy.
Last week, May corn futures were down 12.50 cents, May soybeans down 6.75 cents, May wheat down 25.25 cents, May soymeal was up $10.80 and May soyoil was down 232 points.
The U.S. will start screening travelers for coronavirus and ramp up production of masks and test kits as the government scrambles to reassure Americans the virus is under control. Trump administration officials tried to calm market panic that the coronavirus could cause a global recession, also indicating the public had over-reacted and stocks would bounce back due to the underlying strength of the U.S. economy.
CFTC Commitments of Traders showed funds new net position short -95,510 corn contracts, short -75,130 soybean contracts, long +41,987 wheat contracts, long +14,008 live cattle contracts and long +18,506 lean hog contracts.
2020 US corn crop insurance prices are set at $3.88 (12 cents lower than last year) and soybeans at $9.17 (37 cents lower than last year) for a soybean/corn ratio of 2.36/1 (2.39/1 last year).
NOPA Soybean crush report (for February) will be released today at 2 p.m. CST. Analysts estimate crush at only 187.9 million bushels (184.7 million bushels last month). Oil stocks estimated at 2.365 billion lbs. (2.013 billion lbs. last month, 1.757 bil. lbs. end of December).
Private exporters reported to the USDA on Friday export sales of 135,000 metric tons of soybean cake and meal for delivery to the Philippines during this marketing year.
Malaysia and India will work on improving ties that crippled under former Malaysian Prime Minister Mahathir Mohamad and badly affected palm oil trade between the countries, officials from both nations said. “Can we just renegotiate? It’s for my country as well as for my people,” said Wee Ka Siong, expected ministerial post. “Since we are a new government, let the PM, the new government deal with it. We treasure the friendship with India,” he added.
Since the start of the coronavirus outbreak (1/22), April live cattle futures have fallen $19.30. Last week, April feeder cattle futures dropped $10.05. From 1/22, April feeder cattle futures have fallen $13.97.
Dressed beef values were lower with choice down 0.24 and select down 0.78. The Feeder cattle index was at 135.60. Pork cut-out values were down 0.17.
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