Corn: Prices closed slightly higher this holiday-shortened week after falling to new 3 1/2-year lows to start trading on Monday. May corn was up 1 3/4 cents on Friday to close at $3.31 ¾ and December was up 1 1/2 cents to $3.50 ¾. Corn prices held together well after crude oil swung 20% from session highs to making new lows near the close despite signs OPEC, Russia and other oil producers agreed to large production cuts. The problem for oil and ethanol is inventories are at or near records and demand remains restrained by shelter-in-place guidelines for about 70% of the world population. Corn futures also rebounded from midsession lows after USDA raised its old-crop carryover forecast 200 million bu. after slashing its corn use for ethanol by 355 million bu., offsetting that with a 150-million bu. hike in feed use. Next week’s focus will be on the first USDA corn planting progress update on Monday.
Soybeans: May soybean futures closed up 9 cents at $8.63 1/2 today. Prices closed at a technically bullish weekly high close, as the markets are closed on Good Friday. For the week, May soybeans rose 9 1/4 cents. USDA Thursday raised its old-crop soybean ending stocks forecast by 55 million bu. from last month and raised its crush projection by 20 million bu. to a record 2.125 billion bushels. That was more than offset by cuts of 50 million bu. to exports (to 1.775 billion bu. Today’s strong finish for the week in soybean futures will be tempered early next week by the very poor price performance this week in the soybean meal futures market. Market rallies in the coming weeks will remain tentative without strong new business from China and with Brazil exports are ramping up.
Wheat: Wheat futures finished mostly 6 to 9 cents higher in SRW contracts, mostly 13 to 14 cents higher in HRW contracts and 2 to 5 cents higher in HRS contracts. For the week, May SRW futures firmed 7 1/4 cents, May HRW futures rallied 20 cents and the May HRS contract rose 8 cents. HRW futures led gains into the extended weekend on forecasts calling for freezing temps as far south as West Texas early next week. The U.S. winter wheat crop is rated stronger-than-normal as of early April. Historic data indicates a reasonable correlation between the initial winter wheat condition ratings of the spring and final yields. While there is a lot of time and weather between now and harvest, U.S. yield potential appears to be better than the five-year average of 49.9 bu. per acre.
Cotton: Futures extended losses a bit in the wake of USDA’s reports, but that gave way to some bargain buying that helped the market to reverse course and finish high range. May futures strengthened 339 points for the week, but the market still has a long way to go to erase the past month of heavy losses. USDA hiked its old-crop cotton carryover projection by 1.6 million bales from March to 6.7 MMT on a 1.5 million-bale cut to its export forecast and a 100,000-bale trim to domestic use. The cuts exceeded market expectations by a long shot, in part because cotton export commitments are running 16% ahead of year-ago levels as of April 2. USDA is now calling for just a 1.6% year-over-year increase in export sales due to an unprecedented global economic slowdown Treasury Secretary Steven Mnuchin today indicated the U.S. could be “open for business” again during May, with some European nations also considering steps for a return to normalcy in the weeks and months ahead.
Hogs: April lean hog futures closed down $0.325 at $42.80 today, while June hogs finished $2.775 lower at $48.675. For the week, June hogs rose 35 cents. Look for some follow-through selling pressure early next week following the very disappointing price action to end this week. The fears that Covid-19 will slow processing at the nation’s meat plants will likely continue to weigh on prices in the near term.The pork cutout value Thursday at midday rose $1.50, led by hams and loins. Movement was 191.60 loads. This morning’s weekly USDA export sales report showed a new high in business. Pork sales jumped to 55,900 MT, up 47% from a week earlier. China bought 38,700 MT and shipped 16,300 MT.
Cattle: Cattle and feeders ended mixed on Friday and higher for the week. April rebounded $5.675 and June rose $1.30 this week. Meat packers face a difficult challenge keeping plants running as meat demand continues strong at local groceries. Supplies of cattle may be plentiful but with production slowing, the consumer will see much less meat available in stores for a few weeks. Reports of absenteeism is high at some plants due to fear, while other plants have had workers stricken with Covid-19 and that has slowed production. Instituting social distancing at plants has resulted in slower speeds, too. Slaughter the first four days of this week is down 50,000 head from last week and 58,000 below last year. Look for higher trends next week amid the production slowdown. That should help to boost cash bids and futures.
Corn: May corn futures closed down 1 1/2 cents at $3.30 today and December futures fell 1 3/4 cents at $3.49 1/4. Prices were pressured after the latest weekly U.S. ethanol data that confirmed the drastic cuts in production amid talk cash crude oil prices are near zero or, in the case of cash Canadian oil, trading negative—meaning producers are paying someone to take away supplies. Ethanol production tumbled 168,000 barrels per day to a record low 672,000 barrels per day last week. Inventories surged another 1.374 million barrels to a record 27.091 million barrels as gasoline demand fell to a record low.There have been rumors this week of China buyers shopping for U.S. corn, but USDA made no such announcements Wednesday morning, which was a disappointment.
Soybeans: Soybean futures saw two-sided action overnight, spent most of the day session in positive territory, but was only able to muster a midrange close, with May futures down a quarter cent and deferred contracts ½ cent to 3 ¾ cents higher. Corrective buying in the soybean market faded as the day progressed, with traders looking ahead to USDA’s Supply & Demand update that is expected to include increases to its U.S. soybean carryover estimate. Global carryover is expected to decline from March, however, in part due to smaller soybean crop estimates out of South America. While Brazilian exports of soybeans and other commodities have continued to flow (albeit with some delays) in the face of the coronavirus pandemic, Argentina has had issues getting supplies to crushers and ports.
Wheat: Mixed to mostly higher finishes but down from session highs. May SRW fell a penny to $5.48 1/4 and May HRW rose 4 3/4 to $4.78. Spring wheat futures gained about a nickel. Wheat rose early on weather concerns but pared the rally into the close ahead of the three-day holiday weekend. The export story is building with several nations tendering for inventories. However, tomorrow’s weekly export sales report is unlikely to show any big improvement in U.S. sales last week. Tomorrow at 11 a.m. CDT the USDA will provide its monthly global supply and demand update. Traders are not looking for the government to make many big changes to its old-crop U.S. and world carryover projections. On May 12, USDA releases its first 2020-21 balance sheets.
Cotton: Futures extended the rally to a nine-session high. July futures rose 94 points to 53.84 cents and December gained 89 points to 55.37. Futures rose on hopes for the shelter-in-place guidelines to slowly disappear by early May and get consumers back to work and spending again. Much will depend on consumer confidence the Covid-19 disease has been beaten and people can return to normal lifestyles. The White House is developing plans to get the U.S. economy back in action that depend on testing far more Americans for the coronavirus than has been possible to date, according to Bloomberg News, citing people familiar with the matter. The effort would likely begin in smaller cities and towns in states that haven’t yet been heavily hit by the virus.
Hogs: Lean hog futures finished 92 1/2 cents to $2.475 lower through the December contract, with most contracts ending in the lower portion of today’s range. The hog market was unable to build on gains posted earlier this week as a gap-higher open in many of the contracts failed to trigger followthrough corrective buying. Once this morning’s upside gaps were filled, fresh sellers emerged. Selling in the lead April contract was somewhat limited by its wide discount to the cash index with four trading days left and just six days until it expires. April hogs finished today $9.845 below where the cash market is projected for Thursday.
Cattle: April live cattle futures rose the expanded $4.50 daily limit to $92.825 today. June live cattle futures gained $1.875 to $86.675. May feeder cattle futures rose $5.575 to $119.375. Heavy short covering by speculative traders, especially the big “funds” has been featured the past two trading sessions. Cattle market traders are somewhat encouraged by reports the Covid-19 infection curve is flattening in the U.S. and Europe—even though the death toll in the U.S continues to rise. The White House is developing plans to get the U.S. economy back in action, but that depends on testing far more Americans for the coronavirus than has been possible to date. Researchers are working at full throttle to get more testing and quicker results.
Corn: Corn futures enjoyed a long overdue upside day of trade and settled with gains of 2 ¼ to 3 ¾ cents for the day. This was in the upper half of the market’s daily trading range, but well off session highs. But the market’s downtrend remains in effect. Aggressive fund selling the past four sessions finally gave way to the lifting of some of those short positions today, with a more encouraging narrative on the Covid-19 saga this week helping to ease aggressive selling across a number of markets. The market is also hopeful that a Thursday meeting between Saudi Arabia, Russia and other major oil producers will bring an end to the oil price war. But those countries are demanding the U.S. join in the cuts.
Soybeans: Soybeans ended narrowly mixed, down from earlier highs. May futures fell 3/4 cent to $8.54 3/4 and November gained 1 ½ to $8.66 3/4. After falling to two-week lows and closing higher yesterday, buyers were unwilling to chase the strength in early trading today. While the Brazilian currency strengthened against the U.S. dollar, there was little talk about Chinese buying interest. U.S. equities soared in early trading, building on a 7% gain Monday, but gave back much of today’s gains by early afternoon. The U.S. will still have at least two more weeks of negative news on the Covid-19 outbreak, with hopes for a peak in new cases and deaths during that timeframe.
Wheat: May soft red winter wheat futures prices closed down 6 1/2 cents at $5.49 1/4 today, while May hard red winter wheat futures were down 2 1/2 cents at $4.73 1/4. Winter wheat futures today were pressured a bit from better U.S. crop ratings that came out Monday afternoon. In its first weekly crop progress report of 2020, USDA rated 62% of the U.S. winter wheat crop in “good” to “excellent” condition, up from 60% a year ago and above an average of trade expectations. Top winter-wheat-producing state Kansas reported 49% of its crop in “good” and “excellent” condition, slightly below 55% at the same time last year. Traders are awaiting the monthly USDA supply and demand report out on Thursday, which will implement the March 1 stocks report into its numbers. Traders are looking for mostly steady U.S. and world wheat ending stocks from a month ago.
Cotton: May cotton futures closed down 15 points at 52.90 cents and December cotton was up 36 points at 54.48 cents. Prices closed near midrange. Cotton bulls were disappointed in today’s price action, given that world stock markets enjoyed a second day of solid gains Tuesday amid signs of progress against the coronavirus outbreak in both Europe and the United States, and more government stimulus programs keeping stock market investors in a buying mood. However, a big drop in crude oil prices late today limited buying interest in the cotton market.
Hogs: Hog futures surged to limit up and trading limits expand to $4.50 Wednesday. June hogs were up $3 to $52.65. Trading remains fast and volatile with limit moves now possible in both directions. Today felt more like an exhaustion rally as shorts rushed to cover positions after pushing futures to deep discounts to the cash market. Tyson Foods suspended operations at its pork-processing plant in Columbus Junction, Iowa this week after more than two-dozen workers tested positive for Covid-19. Supplies of market-ready hogs remain heavy and cash prices were slightly lower this morning. Pork cutout values fell 95 cents at midday with lower picnics, loins and hams offsetting gains in ribs and bellies. Demand remained active.
Cattle: Live cattle futures ended up the expanded daily $4.50 limit today, meaning the market will have those expanded limits again on Wednesday. Feeder cattle finished up its normal daily $4.50 limit today, meaning limits expand to $6.75 for tomorrow. The huge spread between live cattle futures and the cash market was significantly narrowed today. Traders did their part by rallying futures $4.50. Meanwhile initial cash cattle trade started in the Southern and Central Plains around $105, which would be down around $6 from last week’s average of $111.08. While sales as of early this afternoon were still relatively light, we anticipate more active cash trade around this level to finish up the week.
Corn: Prices fell for a seventh consecutive session, hitting new contract lows. May futures fell 3 cents to $3.27 3/4 and December fell 2 1/2 cents to $3.48 ¼. Futures fell again today on rapidly slowing ethanol production and use, with inventories already at a record as gasoline demand is down 70%. Prices also fell with livestock futures in free-fall, reducing margins and potential demand for corn. Easing shipping and trucking logistics in Argentina offset news that U.S. corn inspected for export rose to a new marketing-year high last week. While the pace of U.S. exports has improved and China has been buying some U.S. corn for old-crop and boosting new-crop purchases, it is not enough demand to change the downward trend.
Soybeans: May soybeans closed up 1 1/4 cents at $8.55 1/2 today and July gained 1 3/4 cents to $8.61 1/4. May soybean meal fell $6.20 at $297.00 and May bean oil rose 40 points at 26.83 cents. While the soybean futures market saw tepid gains today, bean bulls should be concerned about the very poor price performance in the soybean meal futures market, which has dropped around $25.00 the past week. Meal has been pressured on reports of better shipments out of Argentina, and the funds are also active on the short side of meal. Brazil shipped 3.35 MMT of soybeans last week. Soybeans saw some light support from the surge in U.S. stock indices Monday, amid hopes for a de-escalation of Covid-19 infections and deaths across the globe.
Wheat: SRW wheat settled midrange and up 5 ¾ to 6 ½ cents; HRW wheat finished low range and down 3 ¼ to 3 ¾ cents. Spring wheat futures settled in the lower half of their daily trading range and up 1 ¾ to 2 ½ cents. Gains in European and Russian markets overnight helped the wheat market to strengthen during the session, with wheat benefitting from efforts to ensure adequate food supplies amid the coronavirus pandemic and some regions restricting grain shipments and/or encountering logistic problems due to the virus. The latter is of particular note in Russia. Winter wheat futures also got a boost from some freezing temperatures on the Central Plains over the weekend. But the market eventually pared gains on recognition damage was likely pretty minimal.
Cotton: Cotton futures finished high range with gains of 204 to 221 points through the December contract. Prices were boosted by general strength in the commodity sector and a strong rally in the U.S. stock market today. While attitudes toward risk-based markets improved today, suggesting maybe investors see a light at the end of the tunnel, it’s too early to say today’s price action was anything more than corrective buying in the cotton market. Follow-through buying will be needed to signal a potential low in the cotton market. Fundamentally, the world must get back to its feet with textile mills ramping up production before cotton futures can embark on a sustained price recovery.
Hogs: April lean hog futures closed up $0.90 at $41.125 today, while June futures gained $1.325 at $49.65. Both contracts finished nearer their session highs after dropping sharply to contract lows early on today. Short covering by speculators was likely featured in the futures market today, as fundamentals remain very depressed. April lean hog futures are presently trading around a $17 premium to the projected CME lean hog index. There are also worries about a slowdown in hog slaughter rates amid record market-ready supplies. At least one major Iowa processor is reported to be down this week, the first shutdown of a major plant, with others slowing their pace. Pork product prices did rebound today after cutout dropped $16 the past week. Monday’s pork cutout value was up $2.63, led by hams and bellies. Movement was moderately active at 248.11 loads.
Cattle: Cattle futures closed widely mixed with feeders rebounding Monday. June cattle were down $1 to $79.85 and August rose 52.5 cents to $84.825. May feeder cattle rose $1.20 to $109.30. Front-month futures continued to fall to new lows with nearby April closing down the $4.50 limit at $83.825, or $20 below late-week cash prices. It was inevitable that processing plant workforces would show cases of Covid-19, and we’re faced with that today. Some smaller plants have stopped operations, while larger plants are attempting to remain operational but safe for workers. Last week’s slaughter totaled 626,000 head, at least 20,000 smaller than expected and 50,000 smaller than the prior week. Today’s slaughter was down 7,000 head from a week ago. Reports and rumors of which plants are operating, and which are facing high absenteeism will dominate the conversation for several weeks.
Corn: May corn futures closed down 2 3/4 cents at $.3.30 3/4 today and hit a new contract low. For the week, May corn lost 15 1/4 cents. December corn futures gained a penny today to close at $3.50 3/4. For the week, December corn fell 13 1/2 cents. Nearby May corn futures dropped below important near-term chart support and to a new contract low today, which will likely embolden the funds to further play the short side of the market next week. However, December corn held above this week’s contract low of $3.46 3/4 on new sales to China and wet U.S. forecasts suggesting a slow start to the planting season. Plunging oil prices the past three weeks have put a dagger in the ethanol industry, which will make it very difficult for the corn market to mount a sustained recovery—barring a major weather market during the planting and/or growing seasons.
Soybeans: Soybean futures posted losses of 1 1/4 to 4 1/2 cents through the January contract amid bear spreading. Meal futures finished $2.30 to $5.90 lower on bear spreading. For the week, May soybeans dropped 27 1/4 cents to $8.54 ¼ and May soymeal fell $19.90 to $303.20. To halt the selling in the soybean and meal markets, bullish news must develop out of South America. Brazilian and Argentine soybean crop estimates are dropping, but it would likely take major backlogs or strikes at ports to spur a round of active buying in the soybean market. The Brazilian real posted a new low versus the U.S. dollar today and the Argentine peso is also very weak. That gives South American supplies a strong competitive advantage without some sort of export delay.
Wheat: Prices ended higher, paring weekly losses from two-month highs. May SRW wheat rose 7 1/2 cents to $5.49 ¼ on Friday, paring the weekly decline to 22 cents. May HRW wheat fell 14 1/4 cents this week to close at $4.72. Spring wheat futures fell about 7 cents this week. Prices held support on early-week long liquidation by fund managers to start the new month. Bouncing back today is a positive signal for next week. The focus next week will be on world demand and the season’s first crop ratings for U.S. winter wheat. The growing exporter bans or quotas on wheat and flour may spur additional stock-building purchases by importers. Brazil flour millers are asking for relief from the 10% import tariff. They may want US HRW wheat. The Russian government approved by decree the Ag Ministry proposal to limit its grain exports to 7 MMT through June amid the Covid-19 outbreak.
Cotton: May cotton futures closed up 99 points at 50.98 cents today and for the week lost 35 points. December cotton gained 96 points to 52.08 cents and for the week fell 141 points. The coronavirus pandemic has had most of the business world off balance now for weeks. Textile and clothing makers are nervous about the length of the shelter-in-place orders and retailer orders for the upcoming summer and fall clothing lines. U.S. unemployment claims the past two weeks surged nearly 10 million and that may be just the beginning of job losses. The market found some support from a late-week rebound in oil prices. OPEC and other oil producers will hold a video conference Monday and a deal to curb output would help to stabilize oil prices, down more than 70% before this week’s sharp rebound.
Hogs: Mostly sharply lower to limit down price action today, except in the far deferred futures. April hogs fell $4.475 to $40.225 and June fell the expanded $4.50 limit to $48.325. Since March 24, April plunged more than $26 and June tumbled almost $25. The biggest challenge is keeping slaughter plants running and workers happy in the middle of a pandemic. Slaughter this week fell to 2.618 million head, down 136,000 head from a week earlier but still up from 2.464 million a year ago. Concerns about processors’ ability to maintain a needed slaughter pace have reached a fevered pitch. Packers have cut next week’s kill, and some have increased spacing on the fabrication line. There are some talking that packers are backing off forward commitments in favor of spot negotiated purchases. The good news going home tonight was midday pork cutouts rose $1.51 on good sales.
Cattle: April live cattle futures closed down the $4.50 daily trading limit Friday, at $88.325. June live cattle fell $2.225 at $80.85. For the week, April futures plunged $12.625. May feeder cattle futures on Friday fell $3.55 at $108.10 and for the week lost $12.825. All three futures contracts hit new lows today. Next week will see more gloom setting in over the U.S. and global economies, as the Covid-19 pandemic continues to strangle global commerce. Such will continue to be very bearish for livestock markets. The cattle markets are likely to remain pressured by declining wholesale beef prices and lighter grocer demand to refill coolers. There are also concerns regarding slaughter capacity should Covid-19 shut down packing plants. Choice grade beef fell another $0.69 and Select cutout dropped $1.11 Friday at midday. Choice cutouts are down $25 since last week, giving back about half of last month’s surge.
Corn: Corn futures finished 1 1/4 cents lower in the May contract to 2 1/2 cents higher in the December contract and closed low-range. Corn futures rode the coattails of corrective buying in the crude oil market this morning, but it was a struggle to hold onto gains into the close. The inability to hold gains in old-crop contracts and the bear spreading suggest the market could face more near-term pressure. Without a bullish catalyst, funds have no incentive to actively cover their hefty net short position. Even if funds don’t add a lot of new shorts, the upside is capped unless they cover shorts. Demand destruction in the ethanol industry continues to hang over the corn market as more plants are expected to slow production or shutter amid highly negative margins.
Soybeans: May beans fell 4 cents to $8.58 3/4 and November slipped 1/2 cent to $8.63. May meal fell $5.80 to $309.10 and May soyoil rose 19 points to 26.24 cents. Soybeans were lower most of the session, enjoying a brief rally when petroleum futures spiked 30% higher. Prices backed off into the close as weakness in soybean meal led the way lower. More talk about Chinese buying of Brazilian beans limited support from a solid week of USDA export sales this morning. Sales of soybeans in the week ended March 26 rose to 957,400 MT, 6% higher than the prior week and 75% more than the four-week average. Mexico picked up 388,000 tons and China purchased 131,000 tons
Wheat: May SRW wheat futures closed down 8 1/2 cents at $5.41 3/4 today, while May HRW wheat futures lost 11 cents at $4.64. Spring wheat futures fell 4 to 5 cents. It appears the wheat market this week is giving way to the reality of a severe global recession that may significantly curb world commerce, including reducing demand for grains. The weekly U.S. jobless claims report this morning that showed a rise of over 6 million was a grim harbinger of very tough times that lie just ahead. This morning’s weekly USDA export sales report also showed disappointing U.S. wheat sales, falling to a marketing-year low of 72,900 metric tons (MT)--86% below the prior four-week average. However, China did buy 60,000 MT for new-crop delivery.
Cotton: May cotton futures closed up 158 points at 49.99 cents today and December cotton gained 71 points at 51.12 cents. The cotton market saw support today from a big rally in the crude oil market on reports Saudi Arabia and Russia had reached a truce in their oil-price war. However, earlier solid gains in cotton were eroded as a massive increase in weekly U.S. jobless claims of over 6 million reminded traders of the dire conditions of the U.S. and global economies—meaning significantly less demand for cotton. Today’s weekly USDA export sales report showed U.S. cotton net sales of 147,500 running bales (RB) for the 2019-20 marketing year--down 61% from the prior 4-week average.
Hogs: Hog futures closed down the expanded limit. June hogs fell $4.50 to $52.825 and July dropped $4.50 to $57.225. Fears of slowing demand amid large market-ready hog supplies continued to keep the funds in a sell mode. There is increasing concern that domestic demand has plateaued for the time being and that could be the case until the social distancing restrictions are lifted. However, packers may have to slow down slaughter as cooler capacity fills. With heavy supplies, that could push cash hog prices lower as futures are sharply discounted to current cash prices. Pork values were sharply lower at midday, down $2.42 at $59.63. Butts dropped $21.48 and picnics dropped $11.37. Bellies were lower and hams were weak. Ribs and loins were higher.
Cattle: Live cattle futures gapped lower on the open and quickly extended losses to hit new contract lows in several contracts, with futures settling at or near their $4.50 expanded limit lower. Concerns about the coronavirus disrupting operations at the nation’s slaughterhouses continue to weigh on the cattle complex. There have been cases of the virus in several plants, but impact on processing has thus far been minimal. Adding to negative attitudes is the ongoing retreat in beef prices. Choice and Select boxed beef values initially soared as consumers filled freezers with beef as social-distancing policies went into effect. But demand has since faded, leading to a relatively quick reversal off those highs. And just as concerning, the roughly $20 price drop over the past week has failed to spur strong movement.
Corn: Futures ended at session lows. May corn fell 6 cents to $3.34 3/4 and December plunged 10 1/4 cents to $3.47 1/4. Futures were pressured by fresh fund selling to start the new quarter, on rising fears economic conditions will deteriorate further. The Covid-19 and the ongoing oil price war between Russia/Saudi is battering the U.S. biofuel industry and shuttering more ethanol plants. Weekly ethanol production fell an unprecedented 17% to consume about 86 million bu. of corn, the smallest since September 2013. More depressing, ethanol stocks swelled to a record, which will be pressing up against storage capacity. U.S. gasoline consumption was down nearly 30% from a year ago as gasoline stocks were up 7.5 million barrels. Cash basis continued to weaken. December corn fell to a new contract low.
Soybeans: May soybean futures closed down 23 1/4 cents at $8.62 3/4 today. May soybean meal futures were down $6.60 at $314.90 and May bean oil lost 96 points at 26.05 cents. The big speculative “fund” traders appear to be loading up on the short side of the grain futures to start the new trading month and second quarter. At mid-week, the marketplace took a dimmer view of the Covid-19 situation and its ultimate impact on the global economy. Once again, grain trader focus is on a crippled global economy, and that’s fully bearish. Brazilian soybean exports in March are on track to hit a record 13.1 MMT, Lucas de Brito, an executive at the National Association of Cereal Exporters (Anec), told Reuters on Tuesday. That would break the previous monthly record of around 12 MMT.
Wheat: Wheat futures faced pressure for most of the day and the market settled low-range and just off session lows, with all three flavors posting losses between 13 and 18 ½ cents. Broad-based selling weighed heavily on the wheat complex today, despite any real fundamental reason for the decline. Fund liquidation to start the month and the quarter sent most commodity markets lower today. SRW wheat futures uncovered support at the 100-day moving average today, but followthrough selling after today’s low-range close could set the stage for another challenge of that level tomorrow. Yesterday, USDA said that planting intentions signaled U.S. wheat acreage would likely hit its lowest level in more than a century.
Cotton: Cotton futures finished sharply lower to down the daily limit of 300 points today. Traders continue to hammer the cotton market amid the dire outlook from the Covid-19 pandemic. Cotton followed most other risk-based assets lower today as President Donald Trump on Tuesday warned of a “painful” couple weeks ahead as death tolls from the virus rise. Cotton traders fear textile mill consumption will be greatly reduced not only by the global economic hardship but also by increased demand for synthetic fibers once textile factors start actively producing again given the dive to 18-year lows in crude oil futures.
Hogs: April and June lean hog futures prices closed down the daily trading limit of $3.00 today, at $49.20 and $57.325, respectively. The daily trading limit will rise to $4.50 on Thursday. The mood of the marketplace turned more somber at mid-week, following a grim assessment late Tuesday afternoon by President Trump regarding the Covid-19 outbreak. Over the next two weeks things are going to get “really bad,” he said. New York governor Mario Cuomo followed up Wednesday morning, saying the situation in New York continues to deteriorate rapidly. Few buyers are stepping in to participate on the long side of any commodity futures markets under these circumstances.
Cattle: Live and feeder cattle closed limit down. Cattle limits will remain expanded at $4.50 and feeders will expand to $6.75 on Thursday. June cattle fell $4.50 to $87.575 and May feeder cattle dropped $4.50 to $118.40. Futures tumbled on the expected retreat in beef prices and continued selling on fears an outbreak at a packing plant would lead to a sharp drop in packer demand for live supplies. Packers have purchased a large number of cattle the past three weeks, many with time, so nearby demand is light. Today’s Fed Cattle Exchange on-line auction reported 6 loads traded at $111.50 to $113, down from $119 to $120 last week. A few loads traded in Texas at $112. Unconfirmed rumors circulated this morning that some packers might put in place a cash floor at $110 for April. If confirmed, that would give the cash market some stability and provide a positive boost to the heavily discounted futures.
Corn: May corn futures closed down 1/2 cent at $3.40 3/4 today, while December futures were down 2 1/4 cents at $3.57 1/2. Prices finished near mid-range. Bull spreading was featured in futures today. One of the most anticipated USDA data releases of the year today saw the agency peg U.S. corn plantings at 96.99 mil. acres versus trade expectations of 94.328 mil. acres, and compares with 89.700 mil. acres planted in 2019. Importantly, USDA’s survey work for March planting intentions was conducted the first two weeks of the month and are as of March 1. A lot has changed over the past month. Also, USDA reported U.S. corn stocks at 7.953 billion bu. as of March 1 versus trade expectations of 8.125 billion bu. and compares to 11.402 bil. bu. on Dec. 1 and 8.613 bil. bu. on March 1, 2019.
Soybeans: Soybean futures saw a relatively quiet day of trade, continuing the market’s consolidation trend. Futures settled in the upper half of their daily trading range with gains around 3 cents. Soymeal settled 60 cents to $4.00 lower, with nearbys leading losses. Soyoil finished 8 to 14 points higher. Reaction to USDA’s Prospective Plantings and Grain Stocks Reports was pretty limited today, as Covid-19 continues to dominate the market’s attention. The report data was a mixed bag. On one hand, producers signaled intentions to plant 83.510 million acres to soybeans this year, which was 1.355 million acres lighter than analysts surveyed by Reuters anticipated. Also limiting any bullish response were March 1 soybean stocks of 2.253 billion bu., which topped expectations by 12 million bushels.
Wheat: Prices rallied to new session highs late. May SRW closed down 3/4 cent at $5.68 3/4 while May HRW rose 6 1/4 cents to $4.93. Spring wheat was up 3 1/2 to 4 1/2 cents today. All three markets closed higher for the month. Futures rose after USDA reported March 1 inventories and planting intentions slightly below trade estimates. Total wheat stocks came in 20 million bu. below the average pre-report trade estimate. Wheat stocks in all positions on March 1 were down 11% from year-ago and the lowest in four years. Farmers indicated to USDA they intend to plant 70,000 fewer acres to other spring wheat this year, with intentions coming in 41,000 acres less than the average pre-report estimate. Total U.S. wheat acreage is projected to be the lowest since data began in 1919.
Cotton: Futures rebounded from early lows to close mixed but in the upper 25% of today’s trading ranges. May futures rose 43 points to 51.13 cents and December fell 3 points to 53.41 cents. USDA’s March cotton planting intentions are down only 35,000 acres from last year and roughly 1 million acres more than traders expected. USDA estimates 13.7 million acres of cotton this year. Prices fell near the contract lows set on Monday but could not make new lows, quickly triggering several small rounds of short covering by funds into the close for the month and quarter. Acres probably will be lower but may not fall as much as traders had expected earlier. It looks like growers have made investments to produce cotton and that limits switching to other crops.
Hogs: Lean hog futures finished widely mixed, ranging from losses of $1.75 in the lead April contract to gains of $3.20 in the December contract. The daily trading limit reverts back to $3 for Wednesday’s session after limit moves the prior three sessions. Traders extended the discount April lean hog futures hold to the cash index. With just 11 trading days left until the lead contract expires and 13 days until it settles, April hogs are nearly $13 below the cash index. That suggests traders anticipate heavy pressure on the cash market over the next two weeks. Over the past five years, the cash index has firmed an average of 55 cents from now until April 17 – this year’s contract settlement date. A large part of the reason for traders’ pessimism is a plunging pork cutout value, which was down sharply again this morning.
Cattle: April live cattle futures closed up $2.625 at $101.825, while June live cattle futures closed up the $3.00 daily limit at $92.075. Trading limits will expand to $4.50 for live cattle futures on Wednesday. May feeder cattle futures finished the day up $2.00 at $122.90. Live cattle futures opened lower but reversed course on short covering and perceived bargain hunting. Still, the cattle futures markets are likely to remain pressured by declining wholesale beef prices from record seasonal highs amid lighter grocer demand to refill coolers. Today’s noon beef report showed Choice grade down another $2.67 and Select down $3.81 on light movement of 40 loads. Last week, the kill jumped to 676,000 head, pushing beef production up nearly 13% from a year earlier. The speed of the erosion in beef and cash bids will be key to when futures prices bottom out.
Corn: May corn fell 4 ¾ cents to $3.41 1/4. December corn was down 4 ½ cents to $3.59 3/4.The corn market continued its March decline on sliding U.S. ethanol production and demand. The Renewable Fuels Association estimates that as much as 19% of ethanol capacity has been shut in, reducing the monthly corn grind by about 90 million bushels. Oil prices fell sharply on Monday, with U.S. crude briefly dropping below $20. When we come out of these two Black Swan events -- the price war in oil and now the coronavirus -- we will probably look differently as an industry,” Todd Becker, chief executive officer of U.S. ethanol producer Green Plains Inc., told Bloomberg. “There are definitely plants out there that are going to run out of capital.” Trade focus tomorrow will be on the corn and soybean acreage mix and March 1 corn inventories.
Soybeans: May soybean futures closed up 3/4 cent at $8.82 1/4 today May soybean meal gained $2.40 to $325.50. May soybean oil futures were up 2 points at 26.87 cents. Monday morning’s daily USDA export sales reporting service announced private exporters sold 285,000 MT of soybeans for delivery to Mexico in the new-crop season. That follows sale announcement of 163,290 MT of soybeans on Friday to Mexico for delivery this season. USDA weekly export inspections in the latest reporting week, reported this morning, showed 413,957 metric tons (MT) compared to 587,398 MT inspected in last week’s report. The rally in prices is pausing, as traders want to see evidence of new Chinese purchases after increasing bets logistical issues in South America would shift some business to the U.S.
Wheat: SRW wheat futures ended 1 3/4 cents lower to 5 3/4 cents higher through the March 2021 contract. HRW contracts finished steady to 2 3/4 cents higher through the March 2021 contract. HRS futures finished steady to 2 1/4 cents lower. Futures finished mid to low-range. Today’s price performance in the wheat market was disappointing for bulls. Not only was the market unable to hold onto overnight gains, but traders bear spread futures. That suggests the recent runup may have run out of steam. Price action the remainder of the week will likely give stronger clues as to whether that’s the case or if the market is just pausing after the strong rebound from the mid-month lows. At least some of the focus Tuesday will be on USDA’s March 1 stocks and spring planting intentions, though it would likely take a strong surprise for the wheat market to react sharply.
Cotton: Futures closed lower but well off the early session lows. May cotton was down 63 points to 50.70 cents and December fell 5 points to 53.44 cents. Fear continues to run high regarding COVID-19 and its unknown impact on daily life over the next several months. Prices tumbled as the U.S. plans to extend the stay-at-home order until the end of April. That further delays consumers returning to shops and leading to backlogged spring inventories. Funds increased their net-short position to the largest since October as of March 24, CFTC data on Friday showed. Current short positions in the past have marked significant bottoms. But funds will need a fundamental reason to cover shorts.
Hogs: April lean hog futures closed down the $4.50 trading limit at $53.95 today and the June contract dropped $4.475 at $59.775. Both careened to new contract lows and trading limits will remain the expanded $4.50 on Tuesday. Futures are in a free fall and the cash market fundamentals are in bad shape, suggesting the cash hog market may have another dismal week this week. Hog slaughter last week was 2.74 million head, down from a record 2.790 million in the prior week but still up 8.9% from a year ago. The April futures contract is now about $12 under the cash index, which suggests the cash hog market will collapse in the coming few weeks. Cash hogs down $3.11 today at midday, on a national direct basis.
Cattle: Live cattle closed mixed and in the upper 25% of the daily range. June cattle slipped 35 cents to $89.075. August cattle rose 17.5 cents to $90.625. May feeder cattle fell 2.5 cents to $120.90. Talk that beef cutout values could fall as much as $20 this week kept pressure on futures to start the week. After surging the prior two weeks, beef cutouts were mixed last week. The choice cutout value last week was down 91 cents to $252.84 and the select value was $2.21 higher at $242.38. Last week’s kill jumped to 676,000, pushing beef production up nearly 13% from a year earlier. Boxed beef opened lower to sharply lower on moderate demand for moderate to heavy offerings. Choice was $1.17 lower and Select dropped $3.86 at midday on Monday.
Corn: Corn futures finished 2 1/2 to 3 1/2 cents lower through the March 2021 contract today. For the week, May corn futures firmed 2 1/4 cents and the new-crop December contract rose a penny. Typically, there would be heavy market attention on next Tuesday’s Prospective Plantings and Quarterly Grain Stocks Reports. But with all the Covid-19 concerns and impacts that’s having economically and to global supply chains, along with the major ethanol sector struggles, those reports likely need to be highly bullish to entice a strong upside price response. The source of any price support in the corn market near-term is more likely to be a continued rally in wheat. If that happens, corn may follow. The drop to long-term price support around $3.30 triggered a fresh wave of export demand, led by China.
Soybeans: Soybean futures came back late in the session to close mixed for the day but still posting the best weekly rally since October. May soybeans gained 1 1/4 cents on Friday to close the week up 19 cents at $8.81 ½. Soyoil also posted small gains for the week but May meal closed lower. Prices extended their rally away from contract lows for a second week on concerns that exportable supplies may be curtailed from South America, boosting demand for U.S. soybeans. China should soon start securing U.S. new-crop soybeans. In an ag world that has been bashed by coronavirus and low crude oil values, the arrival of China as a U.S. ag buyer is welcomed news this week.
Wheat: May soft red winter wheat futures closed up 2 1/4 cents at $5.71 1/4. Prices did hit a two-month high early on today. For the week, May SRW wheat gained 32 cents. May hard red winter wheat futures closed down 1/2 cent at $4.86 3/4. For the week, May HRW gained 17 3/4 cents. The wheat bulls had a very good week despite losing some steam as it wound down. Trader concerns regarding limits on exports from some key global shippers should continue to support the wheat futures markets next week. Also, importing nations have begun and may further increase purchases and shipments to maintain adequate inventories. When uncertainty rises, millers and governments like to have more stocks on hand.
Cotton: After trying to consolidate in recent sessions, cotton futures sold off to close out the week, with futures settling 110 to 155 points lower. May cotton dropped 235 points for the week. USDA’s Prospective Plantings Report will arrive Tuesday, which could shift some attention back to market fundamentals. Analysts polled by Reuters expect USDA to report farmers intend to plant around 12.7 million acres to cotton, which would be down just marginally from year-ago levels. Our survey work signals an even bigger drop to 12.3 million acres is likely. Demand has been a bright spot for the cotton market, and China is expected to purchase more of the fiber from the U.S. as it works to fulfill its Phase 1 purchase commitments.
Hogs: Futures reversed early-week gains and closed sharply lower to limit down on Friday, with most months touching new contract lows. April hogs fell $3.12 to $58.45 this week, while June futures fell $3.70 to $64.25. Next week’s trade will hinge on Covid-19 headlines and daily updates on pork demand and the weekly export sales report on Thursday to gauge global demand. The market was pressured this week by fears meat demand will taper offer after the initial panic and hoarding and worries an outbreak of Covid-19 at a packing plant would shut in operations. China is buying U.S. agricultural products. China is likely to remain active pork buyer as long as the economy continues to mend. More workers going back to work, and restaurants reopening will quickly put new upside pressure on food prices.
Cattle: June live cattle futures closed down $4.125 at $89.425 Friday. For the week the market lost a dime, after at one point being up by around $10 in intra-day futures trading Wednesday. May feeder cattle futures closed down their $4.50 limit at $120.925. For the week, May feeders did gain $2.675. What started out as a promising week in the cattle futures markets ended with a thud. It’s tough for consumers (and cattle traders) to be upbeat after watching the evening news on TV each night and seeing the grim developments on Covid-19, which are worsening significantly in the U.S. Importantly, it appears the global stock and financial markets have somewhat stabilized. While the boxed-beef buying frenzy may have passed, quarantine periods mean an unprecedented number of consumers will be eating at home for some time, which could lift consumption of meat like ground beef for several weeks