March 11 Afternoon Comments

By Steve Freed | ADM Investor Services, Inc.

Grains traded lower following lower financial markets. US financial markets want to see quick and decisive stimulus to offset the economic outlook by the spread of the coronavirus.


Soybeans tried to rally on talk of China buying a few cargoes of US PNW soybeans. Market also supported by talk of lower Argentina crush and soymeal supply. Still for June, Brazil Soybean export prices are lower than US. USDA continues to estimate US 2019/20 soyoil end stocks near 1,515 mil lbs versus 1,775 last year. This includes domestic use near 22,900 vs 22,874 ly. Biodiesel use is est near 8,000 vs 7,863 ly. Exports are est near 2,100 vs 1,941 ly. Most analyst agree with USDA US 2019/20 soybean numbers. Key will be China buying US soybeans. Some feel parts of Brazil and Argentina soybean growing areas could use additional rains to meet trade crop estimates. USDA now estimates all South America 2020 soybean production near 190.0 mmt vs 181.0 last year. Weekly US soybean export sales are est near 400-800 mt vs 345 last year.


Corn futures traded lower following lower energy prices. Trade still concerned that spread of the coronavirus outside of China could slow global food, feed and fuel demand. Argentina corn export prices are lower than US. This could slow new demand for US corn. Weekly US corn export sales are est near 600-1,200 mt vs 769 last week. Some feel that USDA est of US corn demand could be too high. USDA est feed/residual near 5,525 mil bu vs 5,430 ly. Concern is that virus could reduce domestic meat use. USDA est ethanol demand 5,425 vs 5,378 ly. US ethanol producer corn basis has slipped lower on talk producers may soon take downtime due to poor margins. USDA est US exports near 1,725 vs 2,065. Some fee this could be high. Some could see final US 2019/20 corn carryout above 2,000 vs USDA est of 1,892. USDA also sees US 2020/21 corn carryout near 2,637. They est export demand to increase to 2,000. Some feel that is too high and final carryout could be closer to 3,300.


Wheat futures traded lower following lower Russian wheat prices. Confirmation that World 2019/20 Wheat crop will be bigger than last year continues to offer resistance to prices. Concern that continued spread of coronavirus outside US will slow economies and food demand also offers resistance. Most feel in the US the spread of the virus will get worse before getting better but the virus spread could be over sooner than later. Weekly US wheat export sales are est near 200-600 mt vs 542 last year. USDA estimated World 2019/20 wheat end stocks near 287.1 mmt vs 277.5 last year. USDA estimates World 2019/20 wheat production up 33 mmt from last year. World 2019/20 wheat end stocks less China is est at a record 182.5 mmt vs 137.8 last year.

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2020-03-11T19:32:31+00:00 March 11th, 2020|