AgriVisor Morning MarketWatch

Wednesday, March 25, 2020
Congress has approved the US economic stimulus package to help negate losses from the Coronavirus. While the bill is providing nearly $2 trillion in relief, economists claim the total bill could end up providing $6 trillion if fully utilized. The initial reaction to this was friendly, but we are now seeing market soften as the long-term support from funding is being questioned. The main underlying factor in the market right now remains the Coronavirus and the impact it is having on attitude, both near term and long term. It is not out of the question that the worst has yet to come from this virus, both from a health stance and from an economic point of view as well. From the health side it all depends on how well the US population listens to travel restrictions and contamination ends. The economic fallout from Coronavirus may be longer lasting, possibly much longer. This is from the fact the US equity markets were trading at all-time highs and due for a correction. Many indicators pointed to a market that was overinflated to begin with and selling was needed to bring it back into line. The fact many Americans are losing their jobs and some positions will be eliminated altogether will be an issue we will have to contend with as well. One shift we have started to see is more interest in safe haven buying in the market. At the start of the outbreak this did not happen. We are now starting to see more buying interest in commodities, mainly gold. It is not uncommon for this to support all commodities as buyers want a physical product in time of market uncertainty. 

* Stimulus package passes
* China to inject $7 trillion into economy
* US ethanol industry continues to shutter
* 2 billion gallons of demand could be closed by week end
* Stay at home orders to reduce fuel demand even more
* Available employee numbers a concern for US businesses
* US weather not favorable for early planting
* Summer forecasts more favorable
* Market economics impact acreage
* Debate continues over RFS waivers

* China to raise corn grower subsidies
* More US ethanol plants slow/stop
* Closures to cut production 2 billion gallons
* DDG values in china +2.4%
* Global corn demand questioned

* Chinese demand on the rise
* Doubts on SAM exports
* Shrinking DDG stocks to benefit meal demand
* Brazil exports getting back to normal levels
* Brazil March soy exports could top year ago 

* US flour supply shrinks
* China may have bought more US wheat
* Global supply questioned
* Buying interest surfacing in global market
* US wheat overbought/overvalued

* Cattle futures undervalued to cash
* Spread has widened to $22.00 at times
* Cattle supply to tighten
* China’s Jan/Feb pork imports +158%
* Stored pork volume in China questioned