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Morning Comments

Friday, April 3, 2020      
Morning Markets: Corn +3Beans +3.  Wheat +12.

Due to the COVID-19 virus we are locking all outside doors at our offices and conducting business through mail, phone and email until further notice.  We apologize for the inconvenience.

Trade has now fully digested the early week USDA data and is focusing on more traditional fundamentals. One factor that is quickly moving to the front of the market is what we will see in next week's updated WASDE report. On the domestic side trade will see how the USDA incorporates the quarterly stocks data into balance sheets. At the same time, we have seen a considerable change in domestic demand since the March data was released that will have an impact on ending stocks. To see a sizable shift in balance sheets would not come as a surprise. The same is true on the global side. Several private firms have updated their production estimates on South America, and these could easily surface in next week's report. A combination of adjustments would indicate a 6 to 8 million metric ton reduction to South American soybean production. While this seems like a stretch and is unlikely to happen all at once, it is possible. Major adjustments to crops may come after harvest, which will be in the next few weeks on Brazilian soybeans. Reductions to the corn crop are just as likely in South America but will likely come at a later date. Trade will also focus on demand, with an emphasis on China. Chinese soybean stocks have been greatly reduced in recent weeks and buying has followed. China has even lifted restrictions on Canadian canola to try and satisfy demand for protein feeds. Trade on a whole continues to be driven by the outside markets, and likely will be even if we do see friendly numbers in next week's WASDE update.

Crude Oil is up $1.31 at $26.63.                           
US Dollar is up $0.132 at $100.69.
Global Equities: Japan -0.4%, China -0.2%, and Europe -0.9%.
Dow futures is down 212 points at 21,061.
EU MATIF Exchange: Corn no change and Wheat +1.2%.
Malaysian Palm Oil: -2.6%.
Dalian: Corn -0.3%, Soybeans +0.2%, Meal -1.6%.
  • NOAA’s 6 to 10 and 8 to 14-day maps are trending away from the above normal temperatures and now suggest well-below normal temps will push southward through most of the central Corn Belt. The active weather pattern continues for the Delta and Southeast while the Midwest looks relatively calm during the same timeframe.
  • WEEKLY EXPORT SALES: Corn: 1,075,000 mt vs trade estimates of 700 – 1,200.  Soybeans: 957,000 mt vs trade estimates of 400 – 900.
  • The Department of Labor’s official March jobs report set for release today is expected to reflect just modest impacts from the coronavirus since the survey period ended the week of the 12th. Some economists estimate more than 20 million jobs could be lost in coming weeks.
  • Sanderson Farms is cutting chicken processing to 1 million birds a week from 1.3 million over the next four weeks in Moultrie, Georgia. The firm has ordered more than 400 slaughterhouse workers who seem healthy to stay home as a precaution against infection by the novel coronavirus.
  • Purchasing managers’ indices (PMI) for Italy, France, Germany, Spain and the UK dropped to record lows in March. The 19-member eurozone composite PMI was 29.7, dropping almost 50% from February’s 51.6.
  • The Russian government has approved an agriculture ministry proposal to limit grain exports to 7 million tons from April through June amid the coronavirus outbreak.
  • Brazil mills are requesting the government to temporarily drop the 10% import tariff on wheat from outside the South American trade bloc Mercosur.
  • Buenos Aires Grains Exchange lowered their Argentine soy crop estimate to 49.5 MMTs, down from its previous estimate of 52 MMTs. The exchange maintained its 50 MMTs corn production forecast.
  • Shipments of beef from Argentina to the European Union have plunged to almost zero amid the global coronavirus outbreak, while sales to top buyer China have tumbled from last year's levels. The slump in exports underscores how the pandemic is affecting global food supply chains, with demand dented by widespread closures of restaurants and transportation of goods stymied by measures to control the virus' spread.
  • Exporters sell 567,000 metric tons of corn for delivery to China.  63,000mt for delivery during 2019/2020 marketing year, and 504,000mt for delivery during 2020/2021.
Have a great day!!!!
Chelsey White
Emery Branch Manager/Originator || Topflight Grain Coop
593 Emery Rd.
Maroa, Il 61756
E-Mail: cwhite@topflightgrain.com
Web: www.topflightgrain.com

This material should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by Topflight Grain Cooperative, Inc. Topflight Grain is not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable but is not guaranteed as to its accuracy. Contact Topflight Grains designated personnel for specific trading advice to meet your trading preferences. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by Topflight Grain Cooperative, Inc.