Morning Comments March 18, 2020

Corn Emerging 360X240

Opening Calls:

Corn: 3 to 7 lower

Beans: mixed; 1 lower to 4 higher

Corn:

COVID-19, the oil war between Saudi Arabia and Russia, the negative margin environment for ethanol, drier areas of Brazil having rain in the forecast and a strong dollar are all weighing on the corn market. The trade continues to be uneasy as the uncertainty of COVID-19 effects both equity and commodity markets are not known. Everyone is looking at China to see the effects on their economy and the early numbers are not encouraging. Ethanol margins are being negatively impacted by low oil and gasoline prices. Increases in ethanol stocks will be closely watched as will any slowing or shuttering by ethanol plants. South America grain continues to be cheaper than the U.S. and with all the uncertainty in the world, the U.S. dollar looks like it will remain strong.

Beans:

Beans are being helped by good crush demand in the U.S. and the thought that crop estimates in both Argentina and Brazil ore overstated and may have to be pulled back by 1 to 2 MMT’s. Even with this, the factors I mentioned above in corn are also weighing on the bean markets and capping any rallies.

The U.S. government is discussing a trillion-dollar-plus stimulus package in order to help the economy and those that are being affected and will be affected by layoffs as the U.S. practices social distancing to fight COVID-19. The main takeaway for the grain markets is that the trade is being very cautious, and money is moving to the sidelines. With the busy time of fieldwork and planting just around the corner contact your local Grain Marketing Advisor for assistance on marketing strategies today. 

Please note, our Grain Marketing Advisors are just a phone call away. Let us know if you have ANY concerns/questions about grain marketing.