Weekly Market Recap


Grains

Coronavirus continues to spread. The WHO declared a Global Health Emergency. Reports this morning from China have deaths at 213 and confirmed cases of the virus tops 10,000. 2/3 of China’s economy remains shut down due to the Coronavirus. 300 million chickens are on the edge of death in Hubei province due to a lack of feed. The coronavirus is expected to cost between $120 and $160 billion before it’s contained. China’s state television reported that COFCO is asking all soybean crushers to resume production in order to increase supplies during the Coronavirus outbreak. Slaughterhouses received similar instructions.

Corn

A well-respected crop scout left both his Brazilian and Argentine corn crop estimates unchanged at 100.0 million tonnes and 47.5 million tonnes respectively. Brazil’s first corn harvest was 11% complete this week versus 5% on average.  Their second crop corn planting was 3% planted versus 8% on average and 15% last year.  BAGE pegged Argentina’s corn planting at 97% complete with 59.6% rated good/excellent versus 60.4% last year. EU corn imports were 12.59 million tonnes for the current marketing year versus 13.47 million tonnes in the prior year. South Africa’s Crop Estimates Committee is predicting that 2.5 million hectares of corn will be planted this year versus 2.3 million last year. Brazil’s JBS CEO reported this morning that they are paying $1 a bushel more for corn than in the U.S. due to stronger than expected export demand and strong domestic demand for ethanol production. Weekly export sales were 1,234,700 tonnes versus estimates ranging from 600,000 to 1,200,000 tonnes. Weekly ethanol production was down 20,000 bpd to 1.029 million bpd.  This is the fourth decline in five weeks.  Stocks were up 213,000 barrels at 24.2 million barrels.  This is the highest inventory since July.  Margins improved 8 cents to a negative 4 cents per gallon.

Wheat

Egypt bought 180 tmt of French wheat, for the year, so far, they’ve bought 5.62 mmt, 3% more than last year. India’s wheat output is estimated to rise 6.3% to 109 million tonnes according to the National Collateral Management Services.

 Weekly export sales were 646,300 tonnes versus estimates ranging from 300,000 to 700,000 tonnes.

Soybeans

The coronavirus remains the market focus. Soybean futures are down 8% in the month of January. South American weather looks favorable, which is adding pressure to U.S. soybean prices.   AgRural is predicting a Brazilian soybean crop of 123.9 mmt, slightly higher than the 123 mmt USDA forecast.  Brazil’s soybean harvest was 4% complete, slightly behind the 5% average.  Mato Grosso, which produces 27% of Brazil’s soybean crop, harvest was 13% complete versus 11% on average.  A very weak Brazilian real has worked to keep Brazil’s soybeans the cheapest on the world stage. The Brazilian real continues to weaken, trading at 4.282. This is the weakest it’s ever been against the Dollar. Weekly soybean sales were 469,700 tonnes versus estimates ranging from 400,000 to 1,000,000 tonnes. Soymeal sales were 438,800 tonnes versus estimates ranging from 200,000 to 500,000 tonnes and soy oil sales were 29,400 tonnes versus estimates ranging from 8,000 to 40,000 tonnes.

Livestock

Brazil’s JBS, a meatpacker, announced that they had signed a memorandum of understanding with Hong Kong’s WH Group to supply up to $717 million worth of fresh beef, poultry, and pork to the Chinese market. The fear surrounding coronavirus has hit hogs especially hard with gapping lower twice this week and losing a staggering $10 this week.

Energies

The Corona-crash in energies continued today. Equities were sharply lower. A lower dollar and the potential for OPEC+ to meet in February provided a level of support.  A lower low and lower close today keeps the downtrend intact. Coronavirus updates through the weekend will be closely monitored. The national average for retail gasoline prices is $2.489, down over 5 cents from a week ago. Retail prices are still about 23 cents higher than this time last year, according to data from AAA.