AgriVisor Morning MarketWatch

Tuesday, April 07, 2020
There has been a change in overall market attitude that may last for months or years to come. For the past several years global importers have developed a hand to mouth attitude when it has come to import coverage. The issues we have seen in the past several weeks with exports and imports is starting to change this opinion of the market. Countries such as Egypt and now rethinking their reserves, as that country alone wants to take its wheat inventory from a three-month supply to one of six months. This will likely bring the US additional export demand as most other countries have restricted their wheat exports to maintain adequate reserves of their own. It is thought this is why China has been a buyer of US corn in recent weeks as well. The real problem with the global market right now is not physical supply, it is the dislocation of the supply. Logistic issues in the global market have stalled movement into the supply line which is causing shortages. This is associated with the Coronavirus outbreak and how many countries locked down their borders as a result. The most notable of these has been in South America, particularly in Argentina. Brazil has continued to ship soybeans despite the virus potentially being spread as the president of the country is worried what halting sales would do to the country’s economy. The United States is seeing this in its dairy industry right now where bottle necks are causing some farmers to dump milk as the supply line is full, even though some retailers are struggling to receive product to sell. These logistic issues on a whole are generating major uncertainty in today’s markets, and one of the primary reason buyers are hesitant to extend coverage. 

* WASDE Report Thursday
* Markets closed this Friday for Good Friday
* Ethanol/gas spread narrows to 15c/gallon
* Bio-fuel industry asks for govt subsidies to stay afloat
* Some Us ethanol plants switch to hand sanitizer manufacturing
* US sees fruit rotting in fields from lack of labor
* High water a concern on US rivers
* Dry weather remains a concern in South America
* Global supply line disruptions a concern
* China shopping for US sorghum
* consumer demand to drive commodity markets

* Export demand remains strong
* China booking 2021 corn
* Japan is main buyer of Us corn
* Open interest climbs in weaker market
* Corn is heavily oversold

* Argentine exports remain stalled; Brazil normal
* South American production trimmed 5 mmt
* China continues to buy Brazil soy
* Last week US exported 11 mbu soybeans
* Brazil’s exports last week totaled 123 mbu 

* US winter crop 62% Good/Excellent
* French crop rating falls
* Ukraine exports drop
* World supply questioned
* Cold temps in US Plains this week

* US processors closing from virus concerns
* Argentine beef exports stalled
* Cash cattle $25 over futures
* US beef slaughter -50,000 head last week
* US hog slaughter -189,000 last week