Morning Comments; Thursday, April 30th, 2020
Agrivisor - SETZ - Thu Apr 30, 6:41AM CDT

The majority of today’s session will be spent with final month end positioning taking place. All spot contracts go into delivery which will elevate the positioning activity. While much of this has already been done, there is always an increase in activity on first notice day. Trade will closely monitor the deliveries this month to see trade beliefs on the cash market. Trade is also paying a closer attention to the planting reports from country sources as some regions of the US are now at their prevent plant insurance dates. This is mostly in the Delta region, but we have seen heavy rains in those states, and some delays have taken place. Given the current state of the futures market it would not be surprising to see farmers take their insurance payment rather than trying to seed a crop in less than perfect conditions. Corn acres are not as great in the Delta region as they are in the Corn Belt, but this could easily set a precedence for the entire US. As this timeline moves north, we will closely monitor state by state planting reports to see if in fact this is a trend that takes place. Trade will also be focused on demand as the weekly export numbers will be released. This will include the time span where several flash sales were reported which should give us elevated totals, especially on soybeans. Outside markets will continue to be a factor as well, especially the energy complex, as crude oil has started to show some recovery strength in the past few sessions.

Highlights

* Rains fall in EU, dry soils still persist

* Heart of Corn Belt continues to see planting activity

* Fringe areas of Corn Belt remain slow

* Demand Destruction may be easing

* Wet conditions slow Argentine harvest

* Conditions turn mixed in Brazil

* 69% of Brazil corn area drier than normal past 30 days

* 47% of Safrinha area sees less than 50% of normal precip

* Low values are attracting buyers

* May oats trade at a premium to May corn

* Record Brazil sugar crop to pressure ethanol industry

* Some economists predict 4 bbu US corn carryout

* FND on May contracts

Corn

* Ethanol corn use last week was 54 mbu

* Weekly ethanol production -47.6% on the year

* Further ethanol declines likely

* Global production still questioned

* US corn lowest valued in global market

Soybeans

* China was destination for 16% of last week’s loadings

* China more interested in fall deliveries from US

* Active soybean planting seen

* Soybeans planted in less than optimum soils

* Higher acreage likely

Wheat

* Russia lowers crop estimate

* US freeze damage continues to surface

* Beneficial rains move through Black Sea

* EU still driest since 1979

* Export reductions factored in market

Livestock

* Cash cattle trend lower

* Many markets remain untested

* Boxed beef at record highs

* Bottle necks building from closures of packers

* Traders try to reduce herd liquidation

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