February 27, 2020

CORN

The song remains the same as coronavirus uncertainty weighs on commodities and equities. Chinese infection rates seem to be slowing but they are increasing in other parts of the world. As concern grows over U.S. infection rates, the market responds accordingly. Corn closed 6 cents lower in an 8-cent trading range, though it started the day trading quietly before weakness in beans seemed to prompt additional selling pressure (beans recovered but corn/wheat could not follow.) CH made new contract lows today. Funds were sellers of 12,000 contracts as of mid-day and held an estimated short position of 116,000 contracts this morning. Weekly export sales were disappointing at 34.0 mln. bu., bringing YTD commitments to 1,019 mln. bu. vs. 1,557 mln. bu. last year. Buyers of note were Japan, Mexico, and central America. Our export window is closing in March as it would appear S. American supplies become more plentiful. Farm Futures survey has corn acres at 96.6 mln. vs. USDA forum estimate of 94.0. The DOW is in the process of putting in its worst week since 2008 and was down almost 1,000 points earlier today and is currently 680 points lower. Crude is currently down a buck 50 at $47 – also having a rough week. Not a good week for commodities.

SOYBEANS

Soybeans closed 5 cents higher in SH and 1-3 cents higher in deferred contracts. SH traded a 21-cent range today. Funds were buyers of 3,000 contracts mid-day and held an estimated short position of 96,000 contracts to start the day. News that China is possibly looking for U.S. bean exports on slow Brazil loadings, and economic activity showing some improvement in China, seemed enough to rally soybeans today. (It’s interesting that a couple days ago the storyline was China would slow soybean exports from Brazil – things change in a hurry.) Brazil bean harvest is progressing in spite of rainfall, though not as quickly as last year. Weekly export sales were 12.5 mln. bu. and bring YTD commitments to 1,239 mln. bu. vs. 1,429 mln. bu. last year. Buyer of note is Japan, with China, Germany, Costa Rica, and S. Korea buying roughly a cargo each. Farm Futures survey has U.S. bean acres at 80.6 mln. vs. USDA forum estimate of 85.0.
Wheat pressured by weakness in corn and demand uncertainty, closing 11 cents lower in WH and 6-8 cents lower in deferred contracts. Funds continue to liquidate their long position, selling 7,000 contracts as of mid-day and estimated long 38,000 contracts this morning. Weekly export sales at 14.0 mln. bu. bring YTD commitments to 832 mln. bu. vs. 807 mln. bu. last year. Few if any wheat deliveries expected.