Morning Highlights


  • President Trump wrote a letter yesterday to the Federal Retirement Thrift Investment board telling them not to invest in index funds that buy Chinese shares according to the Financial Times.
  • China has been reported to have allocated more low-tariff quotas for corn and there is the potential they could do the same for wheat quotas.
  • The U.S. House of Representatives is expected to vote Friday on a new $3 trillion relief package, which includes another round of direct payments to Americans, mortgage relief, and extend unemployment benefits that are set to expire at the end of July.  Also included is $16.5 billion in direct farm payments and aid for biofuel plants and dairy producers.
  • Forecasts for the eastern and central corn belts show moderate to heavy rainfall in the next 7 days.
  • As of 7:00 AM: Crude oil up 0.12 at 25.89, Dow futures up 189 ticks at 23,766, and the U.S. $ index is down 216 ticks at 99.740.                          


  • Markets found some strength yesterday on lower than expected 2020/21 carryout numbers, but the 3.318 bil/bu projection would be the largest since 1987/88 if it came true.
  • As the U.S. export program thrives right now, the USDA increased exports by 50 mil/bu and they started the 2020/21 program at 2.150 bil/bu, 375 mil/bu ahead of the current 2019/20 number.
  • Bushels to ethanol will start the new crop season at 5.200 bil/bu, compared the 3-year average of 5.475 bil/bu.
  • CONAB increased their total corn production to 102.3 MMT, compared to 101.8 MMT last month.  The increase is due to higher yield and harvested acreage in the Goias region, which offsets what is being lost in Parana and RGDS due to dry conditions.
  • New crop corn spreads have narrowed the last couple of weeks but remain in a strong carry market.
  • Spreads: K/N 2 ½ cent inverse; N/Z 13 ¾ cent carry; Z/N 25 ½ carry.

Outlook: Weaker trade to start the day as the market will continue to work on digesting yesterday’s numbers and monitor planting conditions/pace.


  • The report didn’t do much to excite the market as a bearish old crop and friendlier new crop outlook offset each other.  There is still some anticipation we could see higher acres come June’s report.
  • Yesterday’s report showed 2020/21 ending stocks at 405 mil/bu, this is the smallest since 2016/17 and compares to 2019/20 of 580 mil/bu.
  • Even with the cut in exports yesterday for 2019/20, the U.S. exports will need to average the 2nd largest program on record through August to meet the USDA prediction.
  • The soybean meal balance sheet saw no changes for old crop, but soybean oil saw a cut in domestic use but there was a strong increase in exports.
  • Chinese imports were raised 3 MMT to 92 MMT, with Brazilian exports increasing 5 MMT and both Argentina and the U.S. seeing a decline in exports. 
  • 2020/21 Brazil production is expected to be at 131 MMT, continuing to suggest an acreage increase due to record high prices the Brazilian farmer is seeing.
  • Spreads: K/N 3 cent carry, N/X 4 ½ cent carry.

Outlook: Mixed trade to start the morning as the market figures out what direction to move after yesterday’s report.


  • World wheat ending stocks for 2020/21 are projected to be at 310.1 MMT, if realized this would be a new record and almost 15 MMT higher than the previous record.
  • USDA puts world wheat imports 3 MMT higher than last year, part of that coming from a 2 MMT increase from China.  They still don’t predict China will hit their 9.6 MMT Tariff Rate Quota.
  • Russian based analyst SovEcon cut their estimate of their wheat production to 81.2 MMT, compared to the previous estimate 84.4 MMT.  This would still be the 2nd largest crop on record.
  • Traders watch U.S. wheat growing areas as rain is needed in western HRW areas and the eastern corn belt is analyzed to see if SRW areas saw damage from the cold conditions.
  • The Black Sea region and EU growing areas still need more rain to help alleviate the dry conditions they have been experiencing. 
  • Spreads: Chicago N/U 3 ¼ cent carry; Kansas City N/U 7 ½ cent carry; Minneapolis N/U 10 ½ cent carry.

Outlook: Weaker trade in all three markets to start the day.