Morning Comments; Friday, February 21st, 2020
Agrivisor - SETZ - Fri Feb 21, 6:41AM CST

Trade will continue to sort through the USDA Outlook Forum data during today’s session. While most of the attention yesterday was on acres, several other points of information were released as well. One that is starting to gain more attention is the economic outlook for corn, soybeans, and wheat. Unfortunately, the USDA is currently predicting negative returns on all three. According to USDA data, the returns on corn will be a negative $29.00 per acre, a negative $77.00 on soybeans, and a negative $60.00 on wheat. There are several moving parts in these forecasts though, and undoubtedly, we will see numbers move both up and down. The USDA was quick to point out that they did not incorporate the Phase 1 details into their outlooks, which is why Chinese trade for this coming year was only estimated at $14 billion, well short of the $32 billion that was announced in the trade deal. USDA spokespeople claim the $14 billion is the minimum business that will be done with China and the higher number is the added business that is expected. None of the information that was released had much of an impact on the commodity market as it was mostly as expected, especially for acres. Trade will now start to shift its attention towards end of month position squaring as first notice day is a week from tomorrow. Once we get past that we will start to see estimates for the quarterly stocks and prospective plantings reports that will be released at the end of March. Ahead of that trade will be monitoring South American harvest data on the initial crops and the planting and development of the Safrinha crop in Brazil. While we have not heard much on the Coronavirus, it is still very much a factor in global markets. This weighed on the equity markets yesterday and is why we have seen the US dollar continue to rally. Until these markets level out it may be difficult for commodities to trade in a true pattern.


* Ag Outlook Forum continues

* As expected corn, soy acreage is raised

* Phase 1 data not included outlook projections

* USDA projects Chinese buying at $14 billion

* Negative returns forecast in grains, soybeans

* FND is next Friday

* All spot contracts go into delivery

* US dollar continues to rally

* BR 163 now fully paved

* Crude oil hits 4 week high

* Fresh news remains sparse


* Acres projected at 94 million

* Would be 5% increase from last year

* Average cash corn value at $3.60

* Negative return on corn of $29/acre

* US ethanol stocks record high


* US soy acreage at 85 million

* Soy acres +12% from year ago

* US soy average value of $8.80 projected

* Average return on soybeans negative $77/acre

* SAM production continues to grow


* US wheat plantings at 45 million

* Wheat acres down 200,000

* Average US wheat value $4.90

* Average return on wheat negative $60/acre

* EU wheat crop -8 mmt in 2020 from 2019


* US pork undervalued in global market

* US 2020 beef production at 27.5 billion pounds

* 2020 beef production +1.1% from 2019

* US 2020 pork production at 28.9 billion pounds

* 2020 pork production +4.7% from 2019

This commentary is the sole opinion of Karl Setzer, Senior Commodity Risk Analyst for AgriVisor, LLC. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to send an e-mail to


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Karl Setzer Grain Commentary