Markets are mixed this morning with corn down 7, wheat down 15 and soybeans up 4. Favorable weather forecast is weighing on corn and wheat while soybeans are trading higher on hopes of additional Chinese demand.
Both the weather and Chinese demand are expected to be the main driving forces behind this week’s trading. The trade is looking to see another 1.5+ MMT of bean sales as Beijing looks to fulfill its Phase 1 pledge. This should be about how much they will need to secure weekly if there is any hope of them holding up their end of the bargain.
Corn and wheat are both suffering from burdensome supplies and offers into the export market that just are not competitive. The US Dollar has received a little help from the EU overnight as they appear ready to unveil a new stimulus package for their economy.
Global infections of COVID-19 will top 15M this week with US cases easily surpassing the 4M mark. The global mortality rate is now 4.2% with the US sitting at 3.7%. Regional hot spots have local politicians threatening new “stay at home” orders. Florida’s COVID-19 outbreak is “totally out of control,” according to a Democratic representative, and the mayor of Los Angeles said his city is “on the brink” of new restrictions, comments that suggest the country’s months of trade-offs between the health of the community and the economy are far from over.
Look for a 1 point bump when we get a look at crop ratings this afternoon. With the weather forecasters still calling a progressive pattern that holds the possibility for daily showers/storms, this should be easily attainable. Seasonally cool temperatures are expected this week before things begin to heat up again heading into the weekend with highs in the low to mid-90’s expected. This weather pattern is setting us up for a much larger crop than the USDA has been projecting.
Time and weather are stacking up against anyone sitting on old crop corn left to sell and new crop sales that need to be made. We are only a couple weeks away from new crop corn hitting the pipelines as it will begin in the south. This is going to put more pressure on old crop prices as supplies increase. Ethanol margins have dropped dramatically over the last two weeks which could reduce plants rates as driving demand backs off.
My advice to producers is to find a home for your old crop corn and new crop corn that you are unable to store.
Have a Safe Day!