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Afternoon Market Recap for Feb. 28, 2020

Grains wobble in choppy Friday session.

Soybeans finish lower again, with corn and some wheat contracts picking up small gains today

Grain prices attempted to pull out of the ongoing “coronavirus spiral” that has kicked a broad range of commodity prices lower this week. Friday offered the chance for some grain prices to move higher, with middling success. Corn and wheat futures finished the session narrowly mixed but mostly higher, with soybean futures dropping about 0.25% lower on worries about the virus’s impact on short-term Chinese purchases and overall global demand. Some end-of-month short-covering kept losses partly in check.

The eastern Corn Belt could gather some additional light moisture through next Monday, with the upper Midwest and Plains expected to be fairly dry over the next three days, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s latest 8-to-14-day outlook, meantime, shows warmer weather likely from March 6 to 12, with drier conditions continuing to play out in the Plains, while portions of the upper Midwest and Great Lakes region could see wetter-than-normal conditions.

On Wall St., this week’s financial selloff continued in earnest, with the Dow tumbling another 901 points this afternoon to 24,864 and is likely to close with the biggest weekly losses since the financial crisis more than a decade ago. Energy futures also spent today firmly in the red, with crude oil plummeting another 5% this afternoon to fall back below $45 per barrel for the first time since December 2018. Gasoline was down another 1% to 2%, with diesel narrowly mixed. The U.S. Dollar softened slightly.

Corn prices overcame moderate overnight losses to finish Friday’s session with small gains on some bargain buying, although traders remain concerned over the spreading coronavirus’s impact on the global economy. March futures added 2 cents to $3.6650, with May futures inching ahead 0.25 cents to $3.6825. But May futures opened Monday’s session at $3.80, suffering a 3.1% drop this week.

Corn basis bids held steady across most Midwestern locations Friday, with farmer sales remaining relatively slow this week as they await a stop to falling futures prices.

According to the newest Farm Futures grower survey out earlier this week, U.S. farmers could plant as much as 96.6 million acres of corn. If realized, that total moved 7.7% ahead of last year and would become the second-largest corn planting on record. Assuming a return to the five-year average of 173.4 bushels per acre, the U.S. could be looking at a total production of 15.3 billion bushels, which would be a record-breaking haul if it can reach that benchmark.

USDA announced earlier today it will provide up to $100 million in grants for renewable fuel infrastructure, including ethanol. “The goal is to increase “significantly the sale and use of higher blends of ethanol and biodiesel by expanding the infrastructure for renewable fuels derived from U.S. agricultural products,” the agency noted in a press release this morning. Not surprisingly, biofuel associations applauded the move in multiple statements soon after, while drawing criticism from oil industry advocates.

U.S. Agriculture Secretary Sonny Perdue spoke to attendees of this year’s Commodity Classic on a variety of subjects this morning, including trade, technology, markets, sustainability and more. Click here to learn more about what was discussed.

Preliminary volume estimates were for 329,709 contracts, falling substantially lower than Thursday’s final count of 612,629.

Soybean prices were caught by spillover weakness in financial and energy markets today, although traders are still monitoring the situation in Argentina, where grain sales have ground to a halt ahead of an expected announcement from its government that it will increase export taxes to counteract its fiscal deficit. Futures moved briefly higher today but finished the session with small losses. March futures dropped 2.75 cents to $8.8350, with May futures down 2.25 cents to $8.9275 – finishing the week 0.4% lower.

Soybean basis bids remained largely unsteady across the central U.S. but did tick a penny higher at an Illinois river terminal today.

Private exporters reported to USDA the sale of 135,000 metric tons of soymeal to the Philippines for delivery during the 2019/20 marketing year, which began October 1.

According to this week’s Farm Futures grower survey, U.S. farmers intend to plant 4.5 more million acres of soybeans this spring, compared to the overly wet spring of 2019 that featured nearly 16 million prevent plant acres. Total plantings could exceed last year’s tally by 5.6% to reach 80.6 million acres. Worth noting: the survey data was collected the last week of January, before the latest coronavirus outbreak threw China’s ability to snap up more soybeans into question.

Ahead of USDA’s next soybean crush report, out Monday afternoon, analysts expect the agency to report January’s soybean crush total at 187.3 million bushels, which would be the largest monthly tally on record, if realized, breaking December’s mark of 184.7 million bushels.

In Brazil, the 2019/20 soybean harvest has reached 43.1% completion through today, per ARC Mercosul. That’s mostly in line with the historical average of 44.2% but moderately behind last year’s pace of 56%.

Preliminary volume estimates were for 257,419 contracts, falling moderately below Thursday’s final count of 339,292.

Wheat prices suffered heavy losses earlier this week, but bargain buyers emerged late Friday to push some contracts back into the green today. March Chicago SRW futures slipped 0.25 cents lower to $5.29, while March Kansas City HRW futures added 2.75 cents to $4.46 and March MGEX spring wheat futures gained 3.5 cents to $5.1075. For the week, March CBOT futures lost nearly 3.9%.

French consultancy FranceAgriMer slightly lowered its assessment of the country’s soft wheat crop, moving from 65% in good-to-excellent condition down to 64%. That remains significantly below last year’s pace of 85%.

The Philippines purchased 10.1 million bushels of feed wheat from optional origins (but likely from the Black Sea region) in a series of tenders yesterday. The grain is expected to be shipped between May and July.

Preliminary volume estimates were for 134,974 CBOT contracts, sliding just below Thursday’s final count of 140,550.


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