Morning Highlights


  • Global equity markets are weaker on the overnight as investors are trying to figure out what kind of economic impact the new viral outbreak in China will have.
  • News sources are reporting this morning that China is locking down two cities at the epicenter of the coronavirus outbreak that has now killed 17 people and affected 600 people.Wuhan (population of 11 million) and Huanggang (7 million people).
  • President Trump and the EU commission chief Ursula von der Leye said they are expecting to have an agreement to sign in the next few weeks. If realized, this would be yet another big trade agreement made by the President in the last 6-8 months.
  • Quality of the U.S. corn crop is proving to be concerning for Asian feed makers, causing them to turn to Ukraine for some of their needs.Supposedly, the Ukraine has ample supply.


  • A pretty quiet overnight session as the market continues to bob along in its recent normal ranges.
  • Demand for this marketing year continues to be questioned as exports are not very good and ethanol margins have slipped to the negative.However, domestic feed and residual usage is strong.
  • Some weather models are showing the largest corn producing state in Argentina, Cordoba, will see 26% of normal precipitations amounts.Others are still showing 100% of normal levels, so the trade is watching to see how it plays out.
  • Mato Grosso is expected to see some precipitation relief as they have been having 50% of normal precip amounts the last few weeks.The largest safrinha producing state will be starting their 2nd corn crop planting season soon.
  • The projected share of global corn export is projected to be at 27.2% in 2019/20.This would be the lowest since 2012/13 and 2nd lowest on record.
  • Spreads: H/K 5 ¼ carry, K/N 4 ½ carry, N/Z 1 ¼ carry.


Outlook:  Sideways and consolidating trade should be expected until we get something fresh to trade.



  • A weaker soybean futures market is expected as we are trading below 3 major moving averages.The last time we traded below the 200-day MA the market stayed there for a month.
  • Beating the same drum since Phase 1 was signed, but the Chinese aren’t showing signs of buying U.S. soybeans. Until we see large purchases by them the market will have a weaker connotation to it.
  • Weaker overnight trades as we sit waiting for China to knock on the door of the U.S. and the Brazilian harvest looms with large production ideas being realized.
  • China has bought 418 million bushels of soybeans from the U.S. with just 56 mbu outstanding.This compares to 110 mbu outstanding a year ago and 167 mbu two years ago.
  • Spreads: H/K 13 ¾ carry, H/N 27 ¼ carry, N/X 8 ¼ carry, X/F 4 ¼ carry.


Outlook: The slide lower continues as the market awaits China to step up to the plate and South American production doesn’t have any major issues yet.



  • Wheat futures are relatively quiet this morning after the abrupt turnaround mid-session yesterday by the Chicago wheat market.
  • The recent rallies have been fund driven and that has the market nervous when a rally is built on technical trade like this.
  • Corn and soybean new crop futures are trading around the same ranges as they were this time last year.It would be difficult for spring wheat to take acres away from those two commodities.
  • Egypt is looking into the addition of India as an acceptable origin for its international wheat tenders.
  • Japan purchased 82.6k MT of food-quality wheat from the U.S. and 25.6k MT from Canada in their regular tender.
  • Spreads: Mpls H/K 9 ½ carry, Kansas City H/K 7 ½ carry, Chicago H/K 1 carry.


Outlook: Chicago wheat is the leader in the wheat complex, forward direction will be driven by what the funds decide to do.