Can USDA Numbers Turn Prices Around?

Good Morning from Allendale, Inc. with the early morning commentary for March 31, 2020.

Grain Markets are mixed as traders become more concerned about the disruption in supply due to the effects of the coronavirus pandemic.  Corn futures monitor energy prices as corn consumption for ethanol remains a big question mark. All this comes as the USDA is set to release some of its biggest data of the year.

The U.S. government has cut deals with Johnson & Johnson and Moderna, Inc. and said they are in talks with at least two other companies to prepare them to produce massive quantities of coronavirus vaccines even before safe and effective ones become available.  Experts have estimated it could be 12 to 18 months before a safe and effective vaccine wins regulatory approval. (Reuters)

Average estimates for today’s Prospective Plantings and Grain stocks reports have been released by newswires. The Bloomberg poll shows corn acreage at 94.1 million, soybeans 85.0, and all-wheat 45.0. USDA’s Feb Ag Forum numbers were 94 million for corn, 85 million for soybeans and 45 million for all-wheat, so almost no change is expected.

Grain Stocks are estimated at 8,134 million bushels of corn, 2,228 million bushels of soybeans, and 1,430 million bushels of wheat. The reports will be released this morning at 11:00 AM CDT.

USDA weekly grain export inspections showed corn exports at 1,269,000 tonnes (700,000 to 1,000,000 expected), soybean exports at 414,000 tonnes (400,000 to 700,000 expected) and wheat exports at 364,000 tonnes (300,000 to 600,000 expected).

Brazil’s farmers have planted 99% of their second-corn crop area, with scarce rains a concern in the states of Mato Grosso do Sul, São Paulo and Paraná, AgRural said.  Brazilian farmers have collected 76% of their soybean crop through last Thursday, up from 66% last week and in line with last year’s level for the period, the consultancy said. (Reuters)

Argentine shipments of soymeal, soybeans, corn and other agricultural exports were delayed as the government ramps up inspections of incoming cargo ships to ensure crew members were free of coronavirus, industry sources said. Coast guard inspection of ships contributed to concerns about supply bottlenecks after dozens of towns around the Rosario ports hub defied a government order saying that export activities should not be interrupted.

Private exporters reported to the USDA export sales of 285,000 metric tons of soybeans for delivery to Mexico during the 2020/2021 marketing year.

Last week’s average cash cattle sale was $119 ($110 previous week’s average). Conversely, funds were sellers of 4,417 contracts between March 17 – 24th.

April lean hog futures are 32% below April future contract expiration prices from last year.  June lean hog futures are 25% cheaper than one year prior.  Funds were buyers of 1,105 contracts between March 17 – 24th.

Dressed beef values were lower with choice down 1.87 and select down 4.24. The Feeder cattle index is 132.57. Pork cut-out values were down 3.08.

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