Weekly Market Recap March 27, 2020

Grain Podcast

May corn futures finished the day down 2 3/4 at 3.46, but up 2 1/4 for the week. Dec corn lost 3 today, closing at 3.64 1/4, and gaining a penny from last Friday’s close. 

May soybeans gained 1 1/2 today, ending at 8.81 1/2, up 19 for the week. Nov beans lost 2 1/4 today to finish the week at 8.76 3/4, but that is up 16 since last Friday.

As it was last week, Covid-19 remains front and center this week in most news stories. 

But, it might be worthwhile to take a look back at some charts and see not only how far we’ve fallen in a relatively short period of time, but also how some of these commodities have bounced back this week. What follows is the most recent highs and lows: 

Starting with the Energy sector, on January 8th, West Texas Intermediate (the benchmark for U.S. crude oil), traded at $64.39 per barrel, before falling to $20.52 by March 18th. That’s a drop of about 68%, and given where it ended the week, is still down about 67%. Another benchmark, for other parts of the world, is Brent crude. It fell about 65% in the same time frame, and finished this week near the low it set last week. 

Gasoline futures as quoted in Chicago, are known as RBOB. It also had a recent high on January 8th, at $1.99 per gallon. It hit a low this past Monday at 37.6 cents per gallon, that’s down 81%!! It rebounded some this week and is now down about 71%. 

Finally, ethanol futures had a recent high on December 26th, at $1.48 per gallon, and fell 42% to 86 cents, with the low also set on Monday. It’s bounced a little and finished the week down about 37% from that day after Christmas. However, to focus only on ethanol futures doesn’t tell the whole story, as gasoline futures have been the biggest loser in this free fall, starting about 60 cents above ethanol futures on January 8th, and currently trading about 35 cents below them. 

On the grain side, corn and soybean futures all had a recent high on January 2nd. May corn dropped 17% by March 18th, and have rebounded a bit, currently off about 13% from that high. December futures dropped about 12% in the same time frame, and are currently down about 10%. May soybeans dropped about 16%, hitting a low on March 16th, and now sit about 9 1/2% below that Jan 2 high. November beans lost 15% and are now about 11% lower. 

Keep in mind that none of these include any of the basis changes that we’ve seen in the cash markets. 

Next Tuesday, March 31, is the USDA’s Prospective Plantings report as well as the Quarterly Stocks report. Since there will not be an update on supply and demand data, the April 9th WASDE report will take on more importance than is usually the case for a report in April. 

For more information about bullish and bearish factors in the corn and soybean markets this week, please tune into our latest Bull Bear Banter podcast: https://landuscooperativeexperience.podbean.com/

This week’s podcast also features interviews with both Ron DeJongh, head of our grain department, and Matt Carstens, CEO of Landus Cooperative. 

Stay safe and healthy.