Morning Comments; Monday, April 27th, 2020
Agrivisor - SETZ - Mon Apr 27, 6:42AM CDT

Overnight trade was mixed as even though countries have announced they will be suspending export sales on grains, shipments will continue for now. Soybeans took support from the renewed export demand that was found last week. Two main factors will likely be the center of attention in this week’s trade. Initially we will see trade focus on planting reports from over the weekend and what we may see in tonight’s progress report. Last week a reported 7% of the corn and 2% of the soybean crops were planted and thoughts are tonight’s numbers will be considerably higher, especially on corn. Sources from Iowa claim up to 50% of that state’s corn acres have been seeded. The question is if the weekly report will reflect this advancement as reports tend to lag actual fieldwork in many years, especially in year’s with rapid planting rates. It is also not uncommon to see elevated corn acres in year’s with active planting which will be closely monitored as well. The fact that domestic corn demand has dropped in recent weeks may limit any acreage shifting, even with this historical trend. We will also start to see elevated positioning ahead of month end and first notice day on the May contracts which comes this Thursday. With all spot contracts going into delivery we will likely see elevated positioning develop. The question is how many traders have already exited the market as we have seen considerable selling pressure in recent sessions. Aside from these factors, we will continue to see trade focus on weather outlooks and crop reports from South America. Most importantly, trade will be focused on demand to see if we can gain back some of the losses we have seen in recent weeks, especially from the renewable fuel industry. Trade is also anxious to see if we can continue our streak of flash sales this morning, especially to China.

Highlights

* China looks to expand US imports

* Russia to suspend grains sales until July

* Brokerage companies limiting trade in energy markets

* US rig count lowest since July 2016

* 60 US rigs idled last week, just 378 operational

* Drought continues in Black Sea/EU

* Global currency values impacting commodity demand

* Domestic demand may be near a bottom

* FSA sets July 15th to verify acreage

* Wheat/corn spread remains historically wide

* FND on May contracts is Thursday

Corn

* Basis values firm

* Global production questioned

* Funds historically short for this time of year

* Argentina holds export forecast at 34 mmt

* No confirmation of Chinese buying

Soybeans

* Global oilseed values stabilize

* Basis starting to firm

* China buying to increase

* Brazil crop will be 70% exported by June

* US/Brazil soybean spread narrowing

Wheat

* China predicts bumper crop

* China to store as much wheat as possible

* Argentine acres +1.5% this year

* Argentine production estimated a record 20.2 mmt

* Australian exports projected to be nearly double last year

Livestock

* April 1st COF 95% last year

* March placements just 77% of last year

* March marketings +13% on the year

* Last week’s beef exports -19% from week before

* Yearly pork exports +74% 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 ksetzer@agrivisor.com.




 

Market Commentary provided by:

Karl Setzer Grain Commentary