Weekly Market Recap February 1, 2020

Sillouette Harvest Sunset

Last night, March 2020 corn ended at $3.81 1/4, up 1 3/4, losing 6 for the week. 

December corn finished at $3.90 3/4, up ¼, but for the week is down 7 1/2.

March soybean futures ended the day at $8.72 1/2, down 3 3/4 for the day, and losing 29 1/2 for the week. 

November soybeans ended at $9.12 1/4, off 3 3/4, and for the week lost 26 1/2.

The big story driving prices lower all week is the ever-widening issue of Coronavirus. With more than 200 confirmed dead, and the World Health Organization declaring it a global public health emergency, the developments continue to escalate quickly. There are now more than 9,800 confirmed cases. Most major airlines have suspended flights between the U.S. and China starting next week. While not as deadly as the Sudden Respiratory Syndrome, or SARS, outbreak in 2002-2003, it has already outpaced the spread of SARS. 

Major stock exchanges, as well as commodity values, have dropped significantly this week. In addition to the changes in corn and soybean futures above, the Dow Jones Industrial Average is down more than 700 points this week. Crude Oil continued its long slide, now down more than $14 since January 8th. Chicago wheat is down about 20 cents this week. The Chinese stock exchange is set to re-open on Monday after being closed for 6 sessions for the Lunar New Year observances. There is a lot of apprehension about this and just how big of a sell-off we might see then. 

Beyond that, one bright spot lately has been corn export sales and loadings. Sales from last week were reported at 48.6 million bushels, which was above the high end of expectations. This was also the 3rd largest weekly number so far this marketing year. Actual inspections (or loadings) were reported at 26.3 million bushels, within market expectations, and much above the previous week of 15.6 million. 

With March crude oil futures now below $52/barrel, a 3 1/2 month low, ethanol margins continue to be under pressure. Last week, ethanol production dropped to 303 million gallons, which was down from 308 million the previous week. Ethanol stocks also increased slightly and continue to be above 1 billion gallons. This is the highest level in 26 weeks and the 6th highest since June of 2010. 

For soybeans, exports, while declining, continue to be up more than 23% over last year, with a cumulative number of 927 million bushels so far.

U.S. soybean crush has been running at a record pace this year, partly because of a need for soy oil, due to issues with palm oil production. However, this week, palm oil prices have been declining. Since January 2nd, March soybean futures have lost more than 88 cents, while November futures are off more than 70 cents. 

Here are a couple of items to keep in mind: 

  • Our women in ag event, Ventures, is only 2 weeks away. This will be on Saturday, February 15th in Ankeny. Here is a link for more info: https://www.landuscooperative.com/news-events/blog/ventures-2020
  • We continue to see quite a bit of interest in the averaging contracts for 2020. The deadline for sign-up is in a few weeks, so you still have some time to learn about this contract. Please contact your local GMA for complete details. 

As we end this week, we’d like to pass along some info regarding grain quality. We’ve seen more than the usual amount of issues for both corn and soybeans delivered during the month of January. So, please make sure you are checking your bins and staying on top of any issues. There is a lot of demand for good quality corn and soybeans, and many buyers are looking to Iowa to find what they need. If you are experiencing any issues, please talk with your local facility and/or GMA to see if we can work together to stay ahead of this. We do have FREE price later at many of our locations. We’d much rather have you bring it in now and address the issue(s) than have a bigger problem for both of us later.