Soybean market is trying to find a balance between increase in World supply and hope China will increase demand. Soymeal is supported by increase in US domestic meat demand. There were headline news that China may be running low on soybean stocks at crushers but a record amount of soybeans is on the water to China from Brazil. There remains concern about domestic grain flow in Brazil and Argentina due to the spread of the coronavirus. Energy prices are lower after EIA est that World Crude oil demand is down 20 barrels per day during the current crisis. Weekly US soybean export sales were near 33 mil bu with China the best buyer. Total commit is near 1,319 mil bu vs 1,528 last year. Trade estimates US 2020 soybean planted acres intentions near 85.0 million versus 76.1 last year. Trade estimates US March 1 soybean stocks near 2,228 vs 2,727 last year. International Grain Council estimated World soybean crop near 366 mmt versus 341 last year.
Corn futures were supported by good weekly US corn export sales. Weekly US corn export sales were near 71 mil bu with China the best buyer. Total commit is near 1,214 mil bu vs 1,679 last year. Total commit is running 460 mil bu behind USDA est. USDA est a drop of 340 mil bu. Some feel USDA could drop final exports 50-100 mil bu. EIA est World crude oil demand has dropped 20 mil barrels per day since the crisis began. Some feel that US corn use for ethanol could drop 200-300 mil bu. This could add to the final 2019/20 carryout. International Grain Council est World corn crop near 1,160 mmt vs 1,112 last year and demand near 1,170. Trade estimates US 2020 corn planted acres are est near 94.1 million versus 89.7 last year. Trade estimates US March 1 corn stocks near 8,134 mil bu vs 8,613 last year. Some feel USDA asked farmer about planting intentions before the energy led drop in corn prices. Some feel final corn acres could be lower than USDA March 1 guess. Still most feel any rally due to report may be short lived.
Wheat futures traded lower. Some link the drop to talk that Russia will not limit wheat exports. There were rumors that they might limit export until more is known about the 2020 crop. Next week Russia will have a week holiday for workers to try to slow the spread of the virus. Workers in the export chain will be exempt. Weekly US wheat export sales were near 27 mil bu. Total commit is near 908 mil bu vs 867 last year. Trade estimates US 2020 wheat planted acres intentions near 45.0 million versus 45.2 last year. Trade estimates US March 1 wheat stocks near 1,420 vs 1,593 last year. International Grain Council estimated World Wheat crop near 768 mmt vs 763 previous and 760 demand. Volume and open interest continues to drop as traders await news on US stimulus and spread of coronavirus. This adds to trade volatility.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright © ADM Investor Services, Inc.
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