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Evening Comments

Friday, April 3, 2020
 
Closing Markets: Corn -3Beans -4.  Wheat +7.
 
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.  
 

Market Recap:
 
Corn rallied a bit off session lows but still closed 2-3 cents lower nearby and steady/1 cent higher in the deferred months. For the week CK fell 15 cents. Funds were sellers of 5,000 contracts mid-day to add to their estimated short position of 163,000 contracts. The announcement that China bought 567tmt of U.S. corn (63tmt for 19/20 and 504tmt for 20/21) is a positive but didn’t impact the market much, though it is interesting to see China buying U.S. corn for 20/21. It was a tough week for animal agriculture this week too, as cattle futures lost $13, hogs $18, and cheese/milk/butter were all sharply lower. The loss of demand at restaurants, schools, and general slower economic activity given credit for the defensiveness - not good from a feed demand angle. Sanderson Farms in GA announced the slowing of chicken production in the near term on Covid19 problems. The one bright spot is the RBOB/Ethanol spread fell from a 30-40 cent premium ethanol to “only” 15 cents at week’s end. Crude futures have rallied $7/barrel this week as Saudi Arabia and Russia have supposedly agreed to slow production. Offhand comment is that summer vacations (if they happen) most likely will be by auto and not air – hopefully raising fuel usage.
 
Soybeans also able to rally off session lows but closed 4½ cents lower nearby and 1½ cents lower in new crop. SBM down almost $6/ton while SBO a bit firmer. Funds were sellers of 4,000 soybean contracts at mid-session to add to their estimated short position of 26,000 contracts. For the week SK lost 27 cents as soybeans caught in the general negative attitude in the market. S. American soybean production estimates are down roughly 5 MMT, but this is not viewed as problematic. China continues to buy Brazil origin (no surprise) and while logistics issues remain in Argentina and Brazil, their influence on futures seems less as the week ends. Brazil’s president said the country will not follow guidelines much of the rest of the world in following regarding Covid19, so that should be interesting moving forward regarding logistics and vessel quarantine issues.
 
Wheat rallied 6-7 cents today on both technical considerations and Russian announcement exports would be limited though June. Still, for the week Chicago wheat fell 22 cents. The support in wheat futures from food hoarding has possibly run its course.
 
 
Funds Daily
C -166,000 (-7,000); S -10,000 (-7,000); W +2,000 (+6,000); SM +12,000 (-6,000); BO -31,000 (-)    
 
 
 
 
 
 
Have a great evening!!!!
 
Chelsey White
Emery Branch Manager/Originator || Topflight Grain Coop
593 Emery Rd.
Maroa, Il 61756
217-794-2240
E-Mail: cwhite@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.