Floor Talk, March 12, 2020
At the close:
At the close, the May corn futures finished 8 3/4¢ lower at $3.65 1/4. July corn futures ended 7 3/4¢ lower at $3.68 3/4.
May soybean futures settled 13 1/2¢ lower at $8.59 3/4. July soybean futures ended 14 3/4¢ lower at $8.65 1/4.
May wheat futures settled 7 1/4¢ lower at $5.05 3/4.
May soymeal futures closed $1.20 per short ton lower at $302.80. May soy oil futures are $1.15 cents lower at 26.48¢ per pound.
In the outside markets, the NYMEX crude oil market is $1.96 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 1,994 points lower.
At 9:45 a.m., the Dow Jones Industrials plunged 2,100 points (8.0%), triggering the stock market’s circuit breaker. After restarting, the market continued to fall.
Greg Lumsden, Cargill MarketGuide, says that this week has been dominated by broad-based selling across all asset classes.
“As the coronavirus outbreak worsens, we have seen wide spread fear of global economic slowdown. Given the recent developments around travel restrictions and limitations on sporting events the outside markets have taken another big leg down," Lumsden says.
Lumsden added, "On top of the macro uncertainty and fear selling, we are also seeing a large drop in the Brazilian Real (touched 5/USD) which is making our beans very uncompetitive. While it may not feel like it today, the ag markets are holding up pretty well giving the 20%+ drop in equities and energy markets. Until there is relative calm in the outside markets, grains will be subdued but there are a few things that bear watching as we enter into spring. The weather outlook still does not support an early start to the planting season. China, who is ahead of the curve in terms of containment on coronavirus can still buy ag products, giving us a lift. Lastly, the South American Safrina crop is far from made and the weather will be watched more closely over the next few weeks.”
At midsession, the May corn futures are 9 1/4¢ lower at $3.65 1/4. July corn futures are 8 3/4¢ lower at $3.67 3/4.
May soybean futures are 18 1/2¢ lower at $8.54 3/4. July soybean futures are 19 3/4¢ lower at $8.60 1/4.
May wheat futures are 13¢ lower at $4.99 3/4.
May soymeal futures are $2.50 per short ton lower at $299.10. May soy oil futures are $1.08 cents lower at 26.45¢ per pound.
In the outside markets, the NYMEX crude oil market is $1.60 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 2,094 points lower.
In early trading, the May corn futures are 6 3/4¢ lower at $3.67. July corn futures are 6 1/4¢ lower at $3.70.
May soybean futures are 19 1/4¢ lower at $8.54 1/4. July soybean futures are 20¢ lower at $8.60 1/2.
May soymeal futures are $3.50 per short ton lower at $298.10. May soy oil futures are $1.17 cents lower at 26.36¢ per pound.
May wheat futures are 10 1/2¢ lower at $5.02 1/4.
In the outside markets, the NYMEX crude oil market is $2.31 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 1,231 points lower.
Al Kluis, Kluis Advisors, says that the grain markets are weighed down by the coronavirus.
“The WHO (World Health Organization) declared the coronavirus was a pandemic. As a result, the stock market sold off and pulled commodities with it. Fundamentals for US grain are stagnant, since demand is still lacking. As we wait in uncertainty over the coronavirus, we will continue to see money flow to the sidelines,” Kluis told customers in daily note.
Kluis added, “We have lower interest rates and cheaper gas prices, Once we get the coronavirus under control, we could see a nice boost to our economy. People will have some extra spending money. ”
On Thursday, the USDA released its Weekly Export Sales Report.
Corn= 1.59 million metric tons vs. the trade’s expectations of between 600,000-1.2 million metric tons.
Soybeans= 304,200 mt. vs. the trade’s expectations of between 400,000-700,000mt.
Wheat= 480,800 mt. vs. the trade’s expectations of between 350,000-650,000 metric tons.
Soybean meal= 171,900 mt. vs. the trade’s expectations of between 125,000-400,000 metric tons.
Specifically, here's how the soybean exports broke down:
Soybeans: Net sales of 302,800 MT for 2019/2020--a marketing-year low--were down 12 percent from the previous week and 34 percent from the prior 4-week average.
Increases primarily for Japan (120,000 MT, including 61,000 MT switched from unknown destinations and decreases of 600 MT), Indonesia (95,400 MT, including 68,000 MT switched from unknown destinations and decreases of 2,600 MT), the Netherlands (64,700 MT, including 65,000 MT switched from unknown destinations and decreases of 300 MT), Colombia (33,700 MT), and Mexico (22,000 MT, including decreases of 900 MT), were offset by reductions primarily for China (90,300 MT).
For 2020/2021, total net sales of 1,400 MT were for Japan. Exports of 567,600 MT were down 18 percent from the previous week and 21 percent from the prior 4-week average.
The destinations were primarily to China (139,700 MT), Japan (118,300 MT), Indonesia (92,400 MT), the Netherlands (64,700 MT), and Mexico (54,400 MT).
What say you?