Morning Comments April 2, 2020

Soybeans Farnhamville

Opening Calls:

Corn: 1 to 2 higher

Soybeans: 3 to 4 lower 

Yesterday, grain followed financial and other commodities lower. The continuing strength in the dollar is a hurdle that may have prices shackled for the time being. Traditionally, gold had been the safe haven for investors during times of uncertainty. It appears that a transition has moved that safe haven into the US dollar. 

Ethanol hit its lowest production since the fall of 2013 which is a 17 million bushel, per week, decrease in demand. Gasoline demand was down to levels not seen since 1994. There seems to be a lot of speculation that prices could continue to fall. There seems to be some support around $3.32 in the May contract but that may be tested before the week is up. New crop prices took the brunt of the damage yesterday as traders are wrapping their heads around a potential of 97 million acres planted this spring. These numbers are likely to be challenged. There are still plenty of obstacles to overcome to reach that number.

Beans hit a large sell off yesterday as it seemed the market was waiting for an excuse to end the recent rally. The meal market continues to be a point of strength as DDGs are harder to come by given the weakness in ethanol. South America is realizing its huge harvest as it looks to be on track to reach a record export number for the previous month. Beans were up on the overnight but have dipped this morning in premarket trading.