Mid week Matt Bennett comments 040220

Good Morning!

I hope all is well on your operation.  Things are starting to get really close around my place.  In fact, some guys an hour or so west of us were planting corn and that wasn’t an April fool’s joke.  Our ground is really firming up right around here, but we’re still too wet today.  I would imagine by Saturday some guys will be doing a few different things in my immediate area…maybe planting.  I have to think getting in the field is going to be just what the doctor ordered.  Maybe not literally but I think producers getting the chance to get their crop in the ground will improve many spirits.  Simply getting some nice sunny days have been good for me and my family.  I’ve heard from quite a few of you in the last week or so…please keep me posted on what’s going on in your part of the world with regards to weather, planting conditions and how you’re surviving this pandemic. Be on the lookout for a video Channel had put together. It is Larry Adams, a central Illinois FSR, and me discussing the markets and how we see things moving ahead. matt@agmarket.net

The corn and bean markets got killed on Wednesday…and again, this is not an April Fool’s joke.  I really wish it was.  With the start of the month, the funds stepped in and sold about everything they could sell.  With weather issues in Brazil cutting their bean crop slightly and talks it could impact their corn crop, the trade seems disinterested as demand destruction due to Coronavirus is dominating the market.  President Trump announcing the next two to three weeks could be brutal for Americans with mass casualties seemed to spook investors as well.  The outside markets were anything but supportive on Wednesday as the DOW was down over 1,000 on the close. The Dollar was in rally mode while crude was mixed on the day.  May Crude oil was the only oil contract that settled the day higher…May was up 72 cents at $21.20.  The close was 35 cents off the high and $1.30 off the low.

Corn – The corn market had a rough day all the way around.  May corn settled 6 cents lower at $3.34 ¾.  This was 8 cents off the high and a penny and a quarter off the low. The EIA report from the Department of Energy was down again as we would assume.  We saw a huge decrease in corn usage of about 17 million bushels.  At just under 84 mb, usage was off and ethanol stocks were understandably sharply higher. With 1.6 million barrels more ethanol on hand, it’s obvious the lack of driving is taking a huge toll. With the report on Tuesday showing US farmers planting 97 million acres, a person doesn’t even want to look at a supply and demand balance sheet.  Given current numbers, it’s tough to come up with a scenario where we don’t see a 3-billion-bushel carry-out with this crop we’re about to plant.  My thought on corn right now is it’s plenty early in the marketing year.  While finishing old crop sales doesn’t look great at this point, there’s a ton of time with regards to new crop.  I’m not interested in selling much at these levels given most of us haven’t turned a wheel yet.

Soybeans – Soybeans had a really bad day on Wednesday as sellers piled on as the day went on.  May beans settled 23 ¼ lower at $8.62 ¾.  The close was 14 ½ cents off the high and two cents off the low of the day.  The bean market has looked solid of late, but really fell on its face on the first day of the month. With talks the US is better equipped to handle bean and bean meal exports, we’ve seen some strength of late…strength that evaded the market completely yesterday partially due to talk that Argentina is seeing more port activity as some workers are able to return to work.  With Brazil down-grading their crop a bit as well and a smallish acreage estimate at 83.5 million acres, I’d think the bean market would have support in here.  As we talked a week ago, selling some beans after a good rally is tough to argue with.  I know as we get close to $9, people get their vision distorted, but we can’t lose sight of what pays the bills.  Base hits in a year like 2020 could be tough to come by, but in my opinion, they should be the goal rather than the thoughts of a home-run.  I’m not bearish beans after a sharply lower day, but at the same time, it’s tough to forecast prices given the unrest we see in most global markets.  Keep your marketing plans simple and focus on profit margins.

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Matt Bennett

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