March 20, 2020
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Ag Marketing IQ
Fallout from the coronavirus pandemic flattened hopes for a grain market rebound in the first half of March. Misery loves company, and farmers weren’t the only ones steamrolled. Markets finally bounced on Friday, but not before Wall Street officially entered bear market territory and new crop futures for corn and soybeans slumped to new contract lows.
I’ve been fortunate enough to serve farmers’ risk management needs for 37 years. I have seen volatile markets before, and there are lessons to be learned from past volatility during these trying times.
The price targets lower for May corn futures and May soybean futures that I wrote about last week were hit this week. Upon hitting those price targets, I figured corn and soybean futures might trade sideways for a couple weeks until we received fresh news from the USDA on the March 31 Planting Intentions Report and Quarterly Stocks report. That notion lasted for all of 24 hours.
Chris Barron Ag View Solutions, and Duane Lowry, Silver Creek Commodities, discuss what is going on with the coronavirus developments and what people need to take into consideration as we head into planting season and beyond.
USDA’s weekly grain export inspection report, out Monday morning, showed a moderate boost in corn volume for the week ending March 12. Other grains didn’t fare so well, meantime, with soybeans showing a moderate week-over-week drop, while wheat volume was down slightly this past week.
USDA offered another mixed bag of results in its latest weekly export sales report, out Thursday morning. Corn volume led the way again but fell 39% from a week ago. Wheat sales were also down week-over-week, while soybean sales firmed 41%.
May corn futures rose as global stocks posted a modest recovery Friday morning. July corn futures were up ahead of Friday’s trading session. May soybean futures continued higher this morning, underpinned by strength from soybean meal. May soymeal prices. May soyoil futures prices rose. The dollar lent strength to the wheat complex this morning.
Soybeans were the clear winner in the grain markets today, as prices saw a more than 2% boost on another round of technical buying and short-covering due to general trade and demand optimism. Wheat prices also saw solid gains on rising export prospects. But traders are worried over cratering energy futures (which could put a serious dent in ethanol demand), leaving corn with moderate losses today.
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