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Afternoon Market Recap for April 2, 2020

Wheat extends losing streak.

Corn and soybeans also land in the red in Thursday’s session

Grain prices slumped again today, with wheat taking the biggest hit after a lackluster set of export data from USDA this morning triggered another round of technical selling that pushed prices lower for a fourth consecutive session. Corn and soybeans faced a more moderate decline today, as traders remain focused on larger-than-expected acres for both crops.

A corridor near the Mississippi River could see some additional rain and snow through Monday, per the latest 72-hour cumulative precipitation map from NOAA. Some areas could see 1” or more total accumulation through next Monday. NOAA’s latest 8-to-14-day outlook calls for mostly warmer, wetter weather from April 9 to 15.

On Wall St., the Dow showed plenty of volatility today, moving several hundred points higher this morning, then dipping briefly into the red before trending 60 points higher to 21,003 as of 1:45 p.m. CST. Traders were attempting to balance several big news items. Most worrisome was the latest weekly jobless claims report that showed another surge in unemployment that exceeded 6 million last week alone.

On the positive side of the ledger was speculation that Russia and Saudi Arabia could come to a truce regarding their oil production standoff. That news had oil prices soar 24% higher to climb back above $25 per barrel. Gasoline and diesel also notched significant gains today. The U.S. Dollar firmed moderately.

Yesterday, commodity funds were major sellers of corn (-30,000) soybeans (-15,000), soymeal (-5,000), soyoil (-10,000) and CBOT wheat (-12,500) contracts.

Corn prices fell slightly on some technical selling partly spurred by spillover weakness from wheat, despite posting another solid round of export sales this past week. Traders are also still worried that farmers could plant as much as 97 million acres of corn later this spring. May futures slipped 1.25 cents to $3.3350, with July futures down just 0.25 cents to $3.3850.

Corn basis bids continued to weaken at Midwestern ethanol plants Thursday but held steady to firm elsewhere across the central U.S. today.

Corn export sales were down significantly from a week ago, but that was largely to be expected after last week’s tally reached a marketing year high. Sales slid 41% lower last week to 42.3 million bushels in old crop sales plus another 800,000 bushels in new crop sales. Mexico was the No. 1 destination, with 12.4 million bushels.

Corn export shipments climbed to a marketing-year high after netting 49.5 million bushels last week, which topped the prior four-week average by 42%. Japan led the way with 18.8 million bushels.

“While aquaculture enterprises, agricultural cooperatives and nurseries are eligible for SBA disaster assistance, farms are specifically excluded,” notes Farm Futures policy editor Jacqui Fatka in her latest D.C. Dialogue column. “The actual text of the CARES Act does not exclude agricultural producers and states that all businesses with fewer than 500 employees can participate in the program.” Click here to learn more about how farm groups are reacting.

A grain traders union in Ukraine expects the country to harvest 1.449 billion bushels of corn in 2020 and export nearly 82% of that total. Ukraine’s total grain exports for 2019/20 are on pace for a record-breaking year so far.

Algeria purchased 1.6 million bushels of corn from optional origins (likely from the U.S.) in an international tender that closed yesterday. The grain is for shipment between late April and early May.

Preliminary volume estimates were for 329,463 contracts, drifting 10% below Wednesday’s final count of 366,162.

Soybean prices moved moderately lower Thursday, as traders shrugged off a round of better-than-expected export sales from USDA this morning. Prices peaked midmorning before eroding steadily until the close. May futures lost 4 cents to $8.5875, with July futures down 3.25 cents to $8.64.

Soybean basis bids were largely unchanged across the Midwest Thursday but did firm 5 cents at an Indiana processor today.

Soybean exports turned in another bullish performance for the week ending March 26, firming 6% week-over-week to reach 35.2 million bushels in old crop sales plus another 4.2 million bushels in new crop sales. That tally also landed on the high end of analyst estimates.

Soybean export shipments were down 23% from a week ago and 20% below the prior four-week average, meantime. Mexico was the No. 1 destination, with 4.6 million bushels.

The Buenos Aires Grains Exchange has lowered its estimates for Argentina’s 2019/20 soybean production by 4.8% from an earlier forecast to 1.819 billion bushels, citing adverse weather. Argentina is the world’s No. 3 soybean exporter and No. 1 soymeal exporter.

Preliminary volume estimates were for 197,274 contracts, ticking slightly higher than Wednesday’s final count of 186,053.

Wheat prices have fallen every session this week, with Thursday’s losses totaling between 1% and 2%. A poor round of export data this morning from USDA spurred another round of technical selling, with a strengthening U.S. Dollar applying additional headwinds. May Chicago SRW futures dropped 8.5 cents to $5.4175, May Kansas City HRW futures fell 9.25 cents to $4.6575, and May MGEX spring wheat futures lost 5.5 cents to $5.1825.

Wheat export sales underperformed last week. While analysts estimated a wide range that stretched between 9.2 million and 34.9 million bushels, actuals fell all the way to 2.7 million bushels in old crop sales plus another 6.8 million bushels in new crop sales – a marketing-year low. Mexico was the No. 1 buyer, with 3.1 million bushels.

Wheat export shipments also faded, moving 34% lower week-over-week and 42% below the prior four-week tally. Indonesia and Mexico were the top two destinations, with 2.7 million bushels each.

Russia will limit grain exports from April to June, selling only 7 million metric tons over the next three months. But the market impact from this move is likely minimal, as that volume is already in line with what Russia likely would have exported without the restrictions. Russia is the world’s No. 1 wheat exporter.

Egypt, one of the world’s top wheat importers, is planning to raise its strategic reserves of grain and other “staple commodities” to six months to guard against potential shortages due to the coronavirus pandemic. Domestic wheat purchases could exceed 132 million bushels during that period.

A grain traders union in Ukraine expects the country to harvest 948 million bushels of wheat in 2020 and export roughly 70% of that total.

Preliminary volume estimates were for 94,019 CBOT contracts, falling moderately below Wednesday’s final count of 142,256.


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