Markets are slightly higher this morning with corn and soybeans up 2 and wheat up 5. Traders will be closely watching today’s unemployment report, the OPEC+ meeting and the USDA midday report. Estimates for today’s unemployment report range between 5 and 7 million. These numbers are staggering and are expected to grow. The question is how many of these are temporary vs. permanent.
Expectations from today’s OPEC+ meeting are for production to be cut by 10 million barrels per day. This should support crude oil, but offer very little help to ethanol which is in need of a demand increase. Even with the dramatic decline in production we continue to see stocks increase as social distancing has all but eliminated consumer travel. At the current pace we have cut corn for ethanol demand by about 40 million bushel per week. If this continues thru the end of May (which is a modest expectation) we will add 320 million to the balance sheet. Most expectations are that even if we come off of the “Safer at Home” and consumers are allowed to travel, they will do so at a very low rate well into the fall or next winter given the unknowns.
The USDA will release their S&D report at 11am this morning. The key number in today’s report will be corn carryout which is expected to increase from 1.892 billion to 2.004 billion due to the drop in ethanol grind.
April 9 Average Est. March #
Corn 2.092 2.004 1.892
Soybeans .480 .430 .425
Wheat .970 .940 .940
Today is the last day of trade for the week as the markets will be closed tomorrow in observance of Good Friday.
Have a Safe Day!