10:30 a.m. Market Snapshot

Posted on Thu, 03/26/2020 - 10:34

Corn futures are down 1 to 2 cents and near the lower end of the today’s range.  

  • Futures opened steady and pushed lower overnight after the May contract failed to clear resistance near $3.53. 
  • Prices did not get much bounce from the stronger weekly export sales tally this morning.
  • The market continues to be pressured by slowing corn demand from ethanol producers.
  • Weekly corn sales rose to a marketing-year high of 1.814 MMT, up 81% from the four-week average and above the 900,000 MT to 1.8 MMT expected. Increases to China were 756,000 MT, which was already reported in the daily USDA reporting service. 
  • There were no new large sales reported by USDA this morning. 
  • Weekly ethanol production fell 30,000 barrels per day (BPD) to 1.005 million BPD last week. Stocks also fell 458,000 barrels to 24.140 million barrels.
  • Valero Energy Corp. is declaring force majeure in at least two of its biofuel plants as the spread of the coronavirus hits gasoline demand globally.

Soybeans are steady to down 3 cents as old-crop futures pare premiums to the new-crop contracts. Soymeal futures are up $1.00 to $3.50. Soyoil futures are down about 30 points.

  • May soybean futures opened steady to weak and slowly pared losses overnight before pushing into the green shortly after the opening. Soybeans followed soybean meal higher, with better export data adding to the buying interest.
  • This morning’s weekly USDA Export Sales Report showed soybean sales rose 43% to 904,300 MT from a week earlier. More than 400,000 MT sold to unknown destinations, with almost 200,000 MT sold to China. Soymeal sales rose 39% above the prior four-week average.
  • Soymeal futures rising for the first time in three days after taking a pause after touching 19-month highs on Monday. Look for steady demand to emerge on pullbacks on reduced competing supplies of DDGs from lower ethanol production.   
  • The town of Canarana, Mato Grosso, Brazil announced yesterday it amended a decree that halted operations in most industries, now allowing global trading companies to ship grains out of the city.
  • Meanwhile in Argentina, anti-coronavirus measures are slowing the transport of grains to the country’s export hubs, and farmers are starting to hang on to corn and soybeans as infrastructure clogs and domestic prices drop below year-ago and Jan. 1 levels.
  • All Brazilian ports are working normally, with the flow of trucks and barges carrying agricultural products also running normally into all ports, according to Cargonave Group. 
  • Tight soybean supplies in China continues to push up futures prices in Dalian but meal prices pulled back after strong gains that sharply boosted crush margins. Soybean supplies in China fell to 10-year low this week. 

Winter wheat futures are trading 4 to 5 cents lower after failing to extend gains overnight above Tuesday’s highs. Spring wheat futures are down 3 to 5 cents.

  • Wheat futures are pausing after rising near the winter highs yesterday. 
  • World wheat prices have recently rallied after consumers cleared out grocery shelves in most nations as stay-at-home directives led to buying of bread, pasta and flour. Flour millers have moved from “just-in-time” inventory management to “just-in-case” stockpiling.
  • The market should remain well supported as importing nations have begun and may further increase purchases and shipments to maintain adequate inventories.
  • The U.S. reliability as a global grain exporter is improving. Some countries are moving to employ export controls and other barriers to food movement.    

Live and feeder cattle are sharply lower, extending Wednesday’s weak closes. 

  • Live cattle futures opened sharply higher to up the expanded $4.50 trading limit and then closed lower on Wednesday.
  • Futures ran into some profit-taking selling as beef prices did not extend the record surge the past week.
  • Nearby futures still have more than a $12 discount to cash prices, and that should limit selling.    
  • This morning’s weekly USDA beef export report showed sales were down 12% from the prior four-week average at 14,500 MT, led by new sales to South Korea.
  • Boxed beef closed lower on light to moderate demand and offerings yesterday. Choice closed $1.01 lower at $255.30 and Select closed $2.39 lower at $243.09. 
  • Cash cattle trading developed across the three major feeding areas Wednesday. Live deals are ranging from $118 to $120, mostly at $120, which is about $10 higher than last week’s weighted averages. 

Lean hogs are sharply lower and near session lows.

  • Futures are in full retreat, erasing much of this week’s early gain.
  • Worries about sustaining the rally in pork prices and consumer demand have limited buying interest amid large slaughters.
  • USDA said 38,600 MT of pork sold for export last week, up 8% from the previous week with Mexico and China the top buyers. Shipments rose to a new high of 48,600 MT, up 12% from the prior four-week average, with China taking 23,000 MT.
  • Pork cutout values fell $3.02 to $79.03 yesterday. Butts dropped $18 and bellies closed $12.52 lower.  Loins were sharply higher. Hams closed firm. 
  • The national hog price was down 19 cents yesterday.
  • USDA’s Hogs and Pigs Report after the close today is expected to show all hogs up 3.4% from a year ago on March 1 as the number of market hogs rose 3.5% and hogs kept for breeding rising 1.4%. The number of pigs per litter is seen up another 2.5% in the December-February quarter.  Farrowing intentions may rise 0.6% and June-August up 0.4%.