A little hope was provided to grain farmers this week with corn closing up 1 ¼, soybeans up 9 1/4 cents and wheat up 8 1/4 cents.

Traders started the week out with the understanding that coronavirus infection and death rates were leveling off in New York, France, Italy and Spain. This provided traders with a potential timeline and hopes that the United States could return to work soon. More discussions of further legislative aid, clarification on the payroll protection program and further commitments of liquidity from the Federal Reserve bank and other central banks all provided support to equity markets which also lent support to grain traders. POET's announcement that it was shutting down three plants and delaying the opening of a fourth, limited gains.

On Thursday, USDA released the updated the supply and demand report. USDA reduced corn for ethanol use 375 million bushels and offset some of that demand destruction with an increase in feed use of 150 million. AgMarket.Net expects a further reduction in ethanol will be necessary. Some estimates suggest an additional 500 million bushels could be lost if driving does not resume soon. Offsetting some of this loss would be a further increase in feed use by as much as 300 million bushels as well as potential exports to China. USDA left exports unchanged, however China did buy 504K tons of new crop corn this week.  World ending stocks were revised up 5.8 MMT as a result of the decline in ethanol usage. All corn numbers were close to trade expectations and the report was considered neutral.

USDA raised U.S. soybean carryover by 55 million bushels to 480 million bushels. USDA reduced exports by 50 million bushels and increase crush by 20 million bushels resulting in a total usage decline. World soybean stocks fell 2 MMT as a result of Brazil and Argentina crop reductions.  U.S. soy stocks exceeded trade expectations, however, the reduction in world stocks offset the negative tone and resulted in a mostly neutral report.

Wheat stocks rose by 30 million bushels to 970 as a result of reduced demand. This was considered slightly negative to the wheat market since most analysts are watching world exporters delay or hoard inventories from the marketplace putting more emphasis on U.S. sales. After attempting to sell off following the report, wheat futures caught a bid and then ended up closing on the highs for the week.

Cattle and hog futures ended up on a negative close Thursday as traders debate logistical problems being touted by packers who cannot sell product, while consumers are complaining that there is no product on the shelf. April cattle going into delivery are at record discounts to cash. Convergence should occur in the final trading days of April futures.

The macro picture continues to build a strong foundation for investment money to enter the commodity markets as soon as confidence stabilizes. We expect Retail CPI and Consumer Confidence reports should provide the catalyst investors need to start buying. We will update all supply, demand and fund position charts in our Weekly Video released on Monday.

Reach Bill Biedermann at 815-404-1917 or [email protected]

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