March 24 Afternoon Comments

By Steve Freed | ADM Investor Services, Inc.

Soybeans, soyoil and corn are higher. Soymeal and wheat are lower. US stocks are higher on hope of a new stimulus package from Congress. Cattle and hogs continue to surge higher on increase US demand.  


Soybean futures started lower on some long liquidation. Talk of increase Brazil soybean exports may have weighed on prices. Brazil has shipped a record amount of soybeans to China. USTR said they are making progress with China on Phase 1 deal but so far China has not been a large buyer of US soybeans. There is talk that China soybean plants are 30-40 pct on line and protein factories are 80 pct back. Talk of increase hog numbers is supportive. Wuhan is starting to get back to normal 2 months after the first case of the virus. Argentina is reported to open all ports and have stopped any restrictions on trucks into ports. Argentina did drop their rating of their soybean crop due to a dry summer. Surge in US meat demand has triggered big jump in futures as processors try to satisfy the new demand.


Talk of a lack of farmer selling may have triggered some short covering in corn. Corn futures have been under pressure on talk of lower US domestic corn use  and lower export demand. There is also talk that US farmers have what they need to plant the 2020 corn crop and talk of increase acres from last year could increase supplies. There is some talk now that April could also see above normal rains across most of the South, SE and Midwest. This could slow early planting. Brazil corn crop could now be below 100 mmt due to dryness in the southern areas. Concern about drop in US ethanol production and corn use offsets talk of lack of farmers selling and lower US March 1 corn stocks. In the past US stocks from the 2019 crop have been 300 mil bu below average trade guess. Some feel this could be evidence that USDA est of the crop could be too high. Trade est US March 1 corn stocks near 7,900 mil bu vs 8,613 last year.


Wheat futures closed mixed. Fact USDA increased weekly US Winter wheat crop ratings offered resistance. Talk of large increase in US flour demand has helped rally wheat futures. There is talk that US millers are running at full capacity totry to get product to grocery stores. Prior to the US virus cases, 52 pct of US food demand was outside the house. Fact restaurant are closed to in dining suggest the demand for flour products have shifted more to grocery stores. USDA rated the 2020 KS crop 48 pct good/ex vs 46 last week, TX 49 vs 36, OK 77 vs 67, CO 55 vs 46 and AR 43 vs 39 last week. Trade is looking for US 2020 wheat acres near 44.5 mil vs 45.2 last year. March 1 US wheat stocks could be near 1,400 mil bu vs 1,593 last year.

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2020-03-24T19:26:20+00:00 March 24th, 2020|