Good Morning,
Prices over at the CBOT are trading lower again this morning with many traders happy to be turning the page on the calendar from February to March.
Panic around the Globe over more evidence that the coronavirus is spreading outside of China has investors diving for cover into safe-haven assets like Treasuries. There has been and will continue to be a major “Risk Off” attitude amongst traders for the weeks and months to come.
The South American weather models are basically unchanged from yesterday in calling for above normal rain for Brazil and arid weather for Argentina over the next 10 days. There is a chance for some showers in Argentina in the extended outlook, but at this point our confidence is low in the forecast. Yield losses will begin to mount if the pattern continues into late March. Central Brazil still looks wet with expectations for another 3″ to 5″ of rain over the week or so. Farmers in southern Brazil will welcome the drier weather there as the combines get rolling over the next 2 weeks. The forecast for Brazil looks favorable.
Current USDA S&D data shows ample supplies of corn and wheat available while bean supplies are getting tight. With so much grain still available it is tough to talk fund managers into stepping up to buy the grains. In my opinion the chances of China following thru on their phase 1 agreement to purchase $40 billion in ag products will not happen. The Coronavirus has resulted in them spending significant money to fight the disease and has reduced the timeframe for them to buy. This is going to keep prices in check and make any sort of rally into the spring very difficult to obtain.
Have a Safe Day!
Garry Gard
920-348-6844
ggard@didionmilling.com
