Morning Comments March 19, 2020

Grain Marketing

Opening Calls

Corn: 3 to 5 higher

Beans: 12 to 14 higher

Oil and ethanol continue to be front and center in the trader’s minds, with the trade expecting ethanol margins to remain under pressure with Saudi Arabia and Russia continuing to keep a high supply of oil on the world markets. This combined with the expected drop in gasoline usage has everyone scratching their heads as to what the expected slowdown will be and how long it will last. Corn is following the crude oil market and is trading a little higher, but the concern is that corn demand will soften due to reduced ethanol demand and poor export numbers. The last bearish factor to keep in mind is the potential for a large corn crop being planted in the U.S. which with 94 to 96 million acres and trendline yields could result in the carryout approaching 3.0 billion bushels.

Like corn, beans are also oversold and the up in the energy market is helping beans today. The issues facing beans right now is that like ethanol, biofuel demand is also falling, and current bean demand is being met by South America which is resulting in poor U.S. exports. Also, the trade is closely watching China to see if they will honor the phase 1 trade deal, as more time passes there is increasing uncertainty if China will buy U.S. beans. 

They say we normally kill the crop three times before harvest so putting realistic offers in before you get too busy in the field to watch the markets could be beneficial. Call your local GMA today to discuss marketing strategies or for any other assistance you need.