Good Morning!
I know many of you are aggravated about the current state of our ag economy as well as what’s going on in the world. However, I’ll venture to say if we’re on this side of the dirt this morning…it’s still a good morning. Yes, we have challenges many of us have never dealt with. With every market any of us care about moving lower and weather for many of us not cooperating once again, it’s tough to be super excited about here on March 19th. I would like to encourage you though…my family and I are worried as well, but we’re doing everything we can to enjoy one another and make the most of this time together. It’s been quite pleasurable to spend so much time together where we’ve played a few games, watched a few movies and eaten as much beef in a week as I can remember. My wife Tif isn’t going to the store for now as we feel we have enough stuff…and she and I both agree cleaning out the freezers seems wise. I just hope we don’t all get the gout! In seriousness though, don’t lose sight of the things that make us needed in this world. We have to feed this planet…and with more people every day, it gives us longer-term job security. This is going to be a tough stretch on many of us I know…but if we’ll buckle down and do everything we can to be more efficient and stabilize the farm, I feel confident we can push through as the US farmer has always done. Please stay in touch if you need an ear. matt@agmarket.net
The corn market stunk it up as it has for several days now while the bean market moved slightly higher on the day. Hurting our markets is the continuing weakness of the Brazilian Real, which made a new all-time low once again on Wednesday. Thoughts on US acreage all along have centered around big plantings, but current market action has likely impacted those decisions. The biggest impact on our markets has likely been the Coronavirus as the US continues to shut down to try and manage the spread of this virus. The outside markets are certainly creating headwinds for our market as panic-based selling continues to work on prices. With the DOW closing below 20k, we’ve lost 33% of the overall value of the DOW since this sell-off began. The Dollar raced higher, settling on the index at 1.01 ½, while crude got kicked in the teeth. April Crude oil settled the day down $4.56 up a dime at $22.39. The close was $4.82 off the high and $2.33 off the low. Consider this…crude oil has dropped $25 in the last two weeks!
Corn – The corn market had another disappointing day as sellers continued their incessant barrage on especially old crop price levels. May corn settled 8 ¾ cents lower at $3.35 ¼. This was a dime off the high and 3 ¼ cents off the low. The EIA report from the Department of Energy wasn’t terrible considering, showing a decrease in corn usage of a million bushels. At just under 104 mb, usage was likely posted at a higher level than we’ll see for a bit as ethanol plants continue to go idle. There’s no way to explain how much damage has been done to this market with the move in crude down close to $20 at times. With the ethanol sector likely going idle in may places, cash bids have plummeted. While we’ve lost about 40 cents in the last week on futures alone, many have lost 10-30 on basis to boot. I know many have felt I’ve been too bearish when out speaking this winter, but there’s been many things that were concerning to me even though I have felt all along test-weight could factor into final carry. Unfortunately, big acres and likely production in the US could provide a lid on a price recovery rally most of us so desperately need.
Soybeans – Soybeans weren’t fun to look at a week ago, but this week, they’re certainly faring better than corn. May beans settled a penny and a quarter higher at $8.25 ¼. The close was 13 cents off the high and 3 ¼ off the low of the day. The bean market has dropped 75 cents in the last couple of weeks, but at least the losses have slowed this week. With major concern this week over the catastrophe in the energy markets, soybeans haven’t been as poor performing. Soybean meal had a good day on Wednesday, mostly due to the trade seeing ethanol plants going idle…which would make DDGs a bit scarce. This would likely increase demand in feed rations for soybean meal. Moving forward, I would be cautious as to assume beans could see any large-scale rally, but I don’t look for another sharp move lower due to how much we’ve already dropped. As always, have a plan for bushels in the event this market makes a recovery rally. Know at what price levels you’re willing to sell.
Call us if you want to talk positions or strategy…or simply bend our ear. I know this is rough right now. If you want more information on the markets, be sure to visit my team’s website at https://www.agmarket.net/
Matt Bennett
217-273-1133 – Work
@chief321 – Twitter
matt@bennettconsulting.net – E-mail
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