By Doug Tenney, Leist Mercantile
Ahead of the report, many had expected it to be a non-bullish report for grains.
Shortly after the USDA report was released, corn was up 4 cents, soybeans up 8 cents, and wheat up 2 cents. Just before the noon report, grains were all higher with corn up 3 cents, soybeans up 9 cents, and wheat up 3 cents.
Soybean exports and crush were unchanged. Ending stocks at 425 million bushels were unchanged. Corn exports and corn for ethanol were unchanged. Ending stocks were unchanged at 1.892 billion bushels. Brazil soybean production was increased one million tons to 126 million tons. Argentina soybean production was up one million tons to 54 million tons. Wheat exports were unchanged with ending stocks unchanged at 940 million bushels. Trader estimates for ending stocks were little changed from last month for corn, soybeans, and wheat.
The media hysteria with the Coronavirus is ongoing. Late yesterday, Ohio State University announced all classes will be in an online mode the rest of the month. It is easy to conclude additional drastic, never before changes will follow in the weeks ahead.
Grains continue to see vast uncertainty amid lower prices the past month due in part to the Coronavirus. Yesterday, the collapse of crude oil prices also contributed to the weakness in many markets, including grains. Monday’s huge down draft in crude oil prices stems from OPEC and Russia not reaching an agreement in cutting production over the past weekend. Russia could not provide a reduced production number. As a result of that uncertainty, Saudi Arabia announces they will be pumping crude oil substantially above the 10 million barrels per day. That announcement indicates they are willing to take less per barrel with the hopes of pushing other producers to shut down their wells. In recent weeks they have been pumping 9.7 million barrels while their agreed to amount was 10.1 million barrels.
China’s food prices in February spiked 21% higher compared to a year ago. News stories of food shortages are non-existent. Common sense could easily indicate severe shortages.
The trade awaits further news on the virus, U.S. interest rates, as well as U.S. jobs growth and the economy.
It was like the report today never happened.