Watch this video. Today was a SICK market that factored in fear and potential worst case scenarios. But we do have to realize that we trade food….not shoes.
Overnight trade has SRW down roughly 3 cents, HRW down 1, HRS Wheat up 1, Corn is up 1 cent, Soybeans up 2, Soymeal up $1.00, and Soyoil down 30 points. Weak technical signals could offer further resistance to Ag futures.
Chinese Ag futures (May) settled down 1 yuan in Soybeans, up 1 in Corn, down 11 in Soymeal, down 90 in Soyoil, and down 134 in Palm Oil.
The Malaysian Palm Oil market was down 104 ringgit at 2,439 (basis May) on virus demand fears.
Overnight trade started higher but have since backed off the highs. Lack of new buying in equites, energies and commodities limited the rebound in prices. POTUS has asked US Congress for $2.5 billion to fight coronavirus with half will come from repurposed funds and half from new funding.
China reports another 508 cases on new infections and death rate increased 68 to 2,663. S Korea infection increased 68 with fatality rate reaching 9. Iran, Italy and Japan infection rates continue to rise and globally. More than 80,000 have been infected and nearly 3,000 deaths. Coronavirus is reportedly delaying China domestic supply chains reopening.
There is indications that global food and feed trade has slowed due to concern about the virus slowing economy and demand. Some feel large September through January global trade of wheat and corn may have been to increase stockpiles because of the virus.
The South American weather forecast for Brazil continues with decent rains in the 6 to 10 day forecast mainly north of Parana with the south dry. The Argentine weather forecast remains mostly quiet, dry for the week ahead. Argentina will need rains soon to insure normal 2020 crops.
The player sheet had funds net sellers of 15,000 contracts of SRW Wheat; net sold 15,000 Corn; sold 12,000 Soybeans; net sold 3,000 Soymeal, and; sold 10,000 Soyoil.
We estimate Managed Money net long 36,000 contracts of SRW Wheat; net short 107,000 Corn; net short 107,000 contracts of Soybeans; net short 80,000 lots of Soymeal, and; net long 29,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 9,300 contracts; HRW Wheat down 1,500; Corn down 15,500; Soybeans down 115 contracts; Soymeal up 9,900 lots, and; Soyoil up 1,300.
There were no changes in registrations—Registrations total ZERO contracts for SRW Wheat; ZERO Oats; Corn 35; Soybeans 131; Soyoil 2,793 lots; Soymeal 1,714; Rice 565; HRW Wheat 10, and; HRS Wheat 788 contracts.
Tender Activity—S. Korea bought 69,000t optional-origin corn—S. Korea seeks 60,000t optional-origin feed wheat—S. Korea passed on 60,000t optional-origin soymeal—
Yesterday’s U.S. weekly export inspections had
—Wheat exports running 10% ahead of a year ago (13% last week) with the USDA currently forecasting a 7% increase on the year
—Corn 53% behind a year ago (49% last week) with the USDA down 16% for the season
—Soybeans 15% ahead of a year ago (up 19% last week) with the USDA having a 4% increase forecasted on the year
President Trump’s tweet Friday stating that further aid for farmers may be provided by the USDA if needed, may incentivize US farmers to plant even more acres this year; noteworthy that Trump–not Perdue–will make [the] final decision on whether to grant another round of MFP payments–a development that may trigger [an] even larger 2020 acreage; currently, the USDA is projecting that farmers will plant 94M acres of corn, 85M acres of soybeans, and 45M acres of wheat, says the USDA
February 24, 2020 Cold Storage Report
—Total red meat supplies in freezers were up 5 percent from the previous month and up 3 percent from last year.
—Total pounds of beef in freezers were up 2 percent from the previous month but down 4 percent from last year.
—Frozen pork supplies were up 8 percent from the previous month and up 11 percent from last year.
—Stocks of pork bellies were up 6 percent from last month and up 32 percent from last year.
Canadian Oilseed Processors Association Monthly Crush – Feb 24
Crushing statistics of major oilseeds in Canada for the month of January 2020
Figures are in metric tons.
Year Ago 2019/20 2018/19
Canola Jan 2020 Dec 2018 To Date To Date
Seed crushed 854,686 829,640 5,063,065 4,724,763
Oil produced 375,307 359,742 2,211,362 2,056,896
Meal produced 476,979 468,249 2,830,663 2,644,748
Seed crushed 161,618 176,303 896,599 1,082,230
Oil produced 28,703 34,027 164,401 205,420
Meal produced 126,442 135,386 698,075 833,159
China will auction another 20,000 tons of frozen pork from its state reserves on Feb. 27, said the China Merchandise Reserve Management Center
—China will release another 10,000 tons of frozen pork from state reserves to Hubei province, the epicentre of the coronavirus outbreak
—Pork prices in China dipped last week as hog production increased and demand softened, official data showed
—From Feb. 17 to 21, the average pork price index in 16 provincial-level regions tracked by the Ministry of Agriculture and Rural Affairs came in at 50.85 yuan (about 7.1 U.S. dollars) per kg, down 0.7 percent week on week
—The price retreat came as the Chinese government has been taking multi-pronged measures to boost supply, including increasing subsidies to restore hog production, releasing frozen pork reserves and expanding pork imports
Malaysia’s palm oil exports during the February 1-25 period are estimated down 4.4% on month at 970,094 metric tons, cargo surveyor SGS (Malaysia) Bhd. said
—Exports of Malaysian palm oil products for February 1 – 25 fell 5.0 percent to 970,764 tons from 1,022,023 tons shipped during January 1 – 25, cargo surveyor Intertek Testing Services said
—Malaysia’s palm oil exports during the Feb. 1-25 period are estimated down 3.0% on month at 981,073 metric tons, cargo surveyor AmSpec Agri Malaysia saidBack