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Afternoon Market Recap for April 3, 2020

Wheat rises nearly 2% Friday.

Corn and soybeans track moderately lower as rough week draws to a close

Grain prices were mixed but mostly lower Friday, with corn suffering another moderate setback as traders shook off news of a massive sale to China this morning as they remain focused on whether U.S. farmers will plant the third-most corn acres on record this year, as USDA projected earlier this week. Soybeans also took a moderate hit on a round of technical selling today. But wheat prices rebounded nearly 2% Friday as bullish global demand butted up against logistical challenges in some countries.

A round of wet weather this weekend will bring another 0.5” to 1” of additional accumulation to the upper Midwest and eastern Corn Belt through April 6, per the latest 72-hour cumulative precipitation map from NOAA. Further out, the agency is expecting widespread seasonally cool, wet weather to prevail across much of the central U.S. between April 10 and 16, per its latest 8-to-14-day forecast.

On Wall St., fallout from the latest dismal U.S. jobs report (jobless claims reached a record 6.6 million for the week ending March 27) kept the Dow on its heels, falling 481 points in afternoon trading to 20,931. Energy futures made some much-needed inroads, meantime, as oil climbed more than 10% higher this afternoon to clear $28 per barrel. Diesel rose another 8%, with gasoline up 5%. The U.S. Dollar firmed moderately.

Need a feelgood story as the global coronavirus pandemic continues to dominate the daily news cycle? Carhartt, Texas A&M University, ADM and many others have been hard at work with goodwill efforts that will help our neighbors all across the country. Here’s the latest roundup compiled by the Farm Progress staff – click here to learn more.

Yesterday, commodity funds were net sellers of corn (-1,500), soybeans (-6,000), soymeal (-4,000) and CBOT wheat (-6,500) contracts but were net buyers of soyoil (+1,500).

Corn prices spilled into the red again Friday, despite USDA’s news of a large export sale to China this morning. Technical selling prevailed over worries about poor ethanol demand and the potential for 97 million acres getting planted later this spring. May futures dropped 2.75 cents to $3.3075, with July futures down 1.75 cents to $3.3675. For the week, May futures lost a total of 3.6%.

Corn basis bids fell 1 to 4 cents at multiple interior river terminals Friday but held steady across most other Midwestern locations today.

Private exporters reported to USDA the sale of 22.3 million bushels of corn for delivery to China. Of the total, only about 11% is for delivery this marketing year (through August), with the remainder for delivery in 2020/21.

Biofuel trade groups are asking the Trump Administration for funds from USDA’s Commodity Credit Corporation as the industry tries to weather a severe demand slump in the wake of the global coronavirus pandemic. May ethanol futures lost 28% last month, following other energy prices substantially lower.

Further, Renewable Fuels Association CEO Geoff Cooper says RFA expects to see between 2 billion to 3 billion gallons worth of capacity come offline as of April 3 “in an attempt to rebalance supply and demand.” There are about three dozen ethanol plants around the country that have “completely idled” their capacity, plus another two or three dozen facilities that have “greatly reduced” their output, Cooper says.

A South Korean milling group purchased 2.6 million bushels of corn, likely sourced from South America, in a private deal earlier this week. The grain is for shipment between late June and mid-July.

Preliminary volume estimates were for 345,025 contracts, trending slightly above Thursday’s final count 329,321.

Soybean prices absorbed moderate losses on another round of technical selling Friday. May and July futures both dropped 4.5 cents to close at $8.5425 and $8.5950, respectively. For the week, May futures lost 2.9%.

Soybean basis bids were steady to slightly firm Friday, ticking a penny higher at an Illinois river terminal and firming by 2 cents at an Ohio elevator today.

Brazilian soy crushing group Abiove is keeping its estimates for 2020 soybean production and exports steady from its February projections of 4.545 billion bushels and 2.701 billion bushels, respectively.

U.S. farmers will be watching mid- and long-range weather forecasts carefully as the season unfolds. And while some areas are off to a rough start, there’s plenty of evidence that shows farmers will be able to achieve trendline yields in 2020 after stumbling through multiple weather challenges last year. Matthew Kruse, president of Commstock Investments, walks through the details in the latest Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 158,358 contracts, trending moderately below Thursday’s final count 329,321.

Wheat prices fell enough over the last four sessions to prompt a round of technical buying and short-covering Friday, pushing some contracts nearly 2% higher. Panic buying in recent weeks prompted some substantial short-term gains, although long-term demand could be put in jeopardy if the coronavirus pandemic ends up triggering a global recession. Today, May Chicago SRW futures gained 7.5 cents to $5.4925, May Kansas City HRW futures added 9 cents to $4.73, and May MGEX spring wheat futures picked up 5.5 cents to $5.2725.

Kazakhstan has approval to export more than 7 million bushels of wheat in April, according to its agriculture ministry. The country currently has 9.2 million metric tons of grain in stock (the equivalent of 338 million bushels of wheat).

Egypt, which is often the world’s No. 1 wheat importer, currently has strategic wheat reserves that will last more than four months, per the country’s government. Egypt’s domestic wheat harvest will begin later this month.

Need a quick catchup of the top ag news headlines over the last few days? Click here to read the latest edition of “7 ag stories you may have missed this week.”

Preliminary volume estimates were for 94,083 CBOT contracts, up fractionally from Thursday’s final count of 94,019.

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