AgriVisor Morning MarketWatch

Thursday, March 26, 2020
Corn, soybeans, and wheat are taking a break from the recent strength we have seen. This is especially the case for soybeans and wheat where values have started to reach the top end of recent price ranges. Wheat is more so due for a correction as values are approaching recent highs and are over-extended on the charts. May wheat is above all moving averages as well as the upper Bollinger Band. These are indications that the contract is due for a correction. Trade on a whole is also starting to question the actual benefits of the stimulus package that passed Congress and if it is enough to benefit the economy. While it will be beneficial, there are indications total relief may need to total closer to $6 trillion to actually get the economy back on track. A topic that is quickly moving to the forefront of the market from the news side is acreage. Firms across the US are predicting corn plantings of 94 million acres this year and 85 million acres on soybeans. These are in line with what the USDA projected in both last year’s baseline data and the Ag Outlook Forum in February. These numbers are highly suspect though, as recent and forecasted weather conditions do not support high corn plantings. Many of the regions of the Corn Belt that suffered from excessive rainfall last year are still wet, with some even forecasting more precipitation. Historically, years with wet springs do not lead to high corn plantings. The analysts are basing their expectations on the return of prevent plant acres from last year though and feel they will be seeded mostly with corn. While this is possible, and weather forecasts can change quickly, it seems like a bit of a reach to see actual plantings as high as what are being estimated. The USDA will release its prospective plantings next Tuesday, March 31st. Given the lack of actual fieldwork across the US, these numbers may be cast aside until the revisions are released in June, when hopefully planting has concluded.

* $2 trillion stimulus package passes
* Stimulus may need to total closer to $6 trillion to be beneficial
* Chinese GDP -10% from Coronavirus
* Soybean crush in Argentina slows
* Equipment dealers feeling impact of Coronavirus
* US ethanol production -2.9% last week; up 3.1% on the year
* More US ethanol plants going off-line
* Brazil ethanol also impacted by lack of demand
* US crude oil production remains record high
* Brazil lock downs may impact exports

* More US ethanol plants idled
* Gasoline futures nearly 40 cents under ethanol
* US becoming more competitive in global market
* Brazil crop lowered to 98 mmt
* US sees flash sales to unknown

* Chinese soy meal supply shrinking
* Chinese crush margin at 16-week high
* Crush plants may slow in Brazil, Argentina
* Brazilian Real weakens to US dollar
* Brazil expected to export 73.5 mmt soybeans 

* State crop ratings improve
* Texas jumps 13% in one week
* Chinese specifications may limit imports
* US rally pushes wheat above global market
* Global wheat demand on the rise

* Wholesale beef continues to rally
* Slaughter numbers down on cattle
* Animal weights on the rise
* Hog inventory report after the close
* Futures continue to chase cash market