Special Market Update
Grain Market Commentary
Monday, March 23, 2020
By Tiffany Weitzel, Originations Merchant, The Andersons
In the commodity market and row crops specifically, we are used to ever changing markets, uncertainty, doing everything we possibly can to create the best possible outcome and still being at the mercy of so many things out of our control (weather and China I’m looking at you). In many ways not much has changed, and yet I’m typing this from my dining room table and not my office at the Andersons Albion Ethanol. Two days ago, 1 in 4 Americans were under ‘shelter in place’ in orders, with my state, Michigan, being the latest to join. Agriculture is considered a critical infrastructure industry. Our day to day business goes on, from the kitchen table and the tractor. The grains and oilseeds even found some optimism and traded both sides throughout last week.
For the week corn was down 19 cents, soft red wheat up 33, soybeans up 8, soymeal up $13 and soyoil down 80 points. Meal is at a 4-month high and soybeans saw a key reversal on Fridays close.
Big weekend news took place in the Chinese market as soymeal futures traded up limit. Many soybean crushers halted operation due to lack of availability. The Covid19 outbreak has also reached South America and disrupted the supply chain there. There was also reports late Friday that the U.S. had sold 2 cargos of beans to China out of Pacific Northwest. The technical indicators support higher prices in soybeans today. May bean support is at 8.53. Resistance is at 8.72 and 8.78.
Corn continues to struggle as several Ethanol plants across the country are either closing or idling back production amidst multi year lows in crude and overall energy prices being down. US farmers indicating they still intend to increase planted corn acres also adds pressure to the negative trend. The technical indicators are sending mixed signals. May corn support is at 3.36 1/2. Resistance is at 3.52 then 3.61
Wheat has benefited from the pullback of the US dollar making it more competitive on the global market. There are also concerns that there could be an interruption in the European supply chain, leading to imports from the US and Australia. The USDA also reported a nice sale to China. Technical indicators are favorable with a close above the 40-day moving average among other positive charts. May wheat support is at 5.32 1/4. Resistance is at 5.46 ¼ and 5.53 ½.