If you would like to receive our technical comments including price projections and cycle analysis for important tops and bottoms, click on the link at the bottom of the commentary to sign up for a 30-day free trial subscription. Follow Ag Watch Market Advisors on Facebook and Twitter for timely information not posted in our blog.
The water is still muddy in the financial and grain markets as the coronavirus has been declared a pandemic by the World Health Organization. Adding to the misery, Saudi Arabia has lowered oil prices in response to a dispute with Russia, plus travel from Europe is being suspended for 30 days by President Trump. This is increasing fear of a global recession. Normally, discussions this time of the year in the grains center around weather and planting. However, that has not been the case this season as the financial markets are in the full panic mode hitting the grains from several angles. This has created an increase in volatility that may persist a while longer. Meanwhile, exports are improving. Inspections last week were 32.6 MB but below the average of 45.4 MB that must be shipped each week to reach USDA’s projection of 1.725 BB.
Worries over the coronavirus and plunge in the financial markets continue to plague soybeans as well as well as a large crop in Brazil that is 50 percent harvested. Concerns are that the terms in the Phase I trade agreement may have to be restructured if China cannot meet them. Meanwhile, exports are struggling with inspections last week—a marketing year low of 21.0 MB. We must ship 28.7 MB each week to meet USDA’s target of 1.825 BB. Since November, the pace of shipments has fallen 55 percent. Last week, China took 5.1 MB, but that was above the previous week’s shipments of only 2.3 MB.
Wheat continues to trend lower following corn and soybeans. The crop is coming out of dormancy and needs moisture in the western section of the southern Plains. Exports have improved since January but still face competition from our competitors. Weakness in the dollar recently should help. Inspections last week were mundane at 15.2 MB. This was below the average of 24.4 MB that must be shipped on a weekly basis to reach USDA’s projection of 1.0 BB.
Comments and suggestions are provided for information purposes only. Information contained herein is obtained from sources believed to be reliable but not guaranteed to its accuracy or completeness. Readers using the information contained herein are responsible for their own actions. No presentations can be made that recommendations will be profitable or that they will not result in losses. This information is neither an offer to sell nor solicitation to buy of the commodity futures mentioned herein. The writer may be trading in the commodities mentioned.