Weekly Market Wrap-Up
Grain Market Commentary
Friday, March 20, 2020
by Paul Matthews, Associate Merchant, The Andersons
Monday kicked off markets with continued negativity for the DOW and S&P 500, with those indices both down 8% and 7% respectively. Circuit breaker was again initiated for the S&P and trading halted for 15 minutes, only to drop once again when trading commenced.
Export inspections reported Monday pegged corn up 148 thousand metric tons, soybeans down 142 thousand metric tons, and wheat down 10 thousand metric tons against last week’s numbers.
Tuesday began with some mild support and grains bounced on the open during the night session after Monday’s huge losses in the DOW closing lower, along with crude oil and S&P futures which also closed lower on the day.
Wednesday continued with the trend of market selloff amid uncertainty with coronavirus. Oil prices have been driven even lower with more price war news – this is causing disruption for ethanol values, squeezing margins further into the red.
Thursday’s trade kicked off with a more positive tone with some speculated buying off the lows supporting surges in value for corn, beans, and wheat. Some positive trading for crude oil and the U.S. government injecting funds into the market are giving commodities a bounce.
Export sales reported Thursday showed wheat net sales down 25%, corn down 39%, and soybeans up 41% from the previous week.
Friday’s price action saw a continuation of the late-week support led higher by the soy complex. Bean oil and especially meal saw sharp spikes in value which look to be caused by several major grain export locations in Argentina shutting down due to concerns from COVID-19. The trade will be watching this closely, as any sign of supply chain obstruction will provoke a quick reaction from a market already hugely pressured from non-ag related volatility.
The week concluded in stunning fashion, particularly in soybeans and wheat. Values rallied strong to wrap the week, which will be looked at for follow through heading into next week depending on the next couple of days headlines.
May corn futures opened the week at $3.625 and closed at $3.4375 an 18-cent decrease for the week.
May soybean futures opened at $8.42 and closed at $8.625, a 20-cent increase on the week.
May wheat futures opened the week at $5.03 and closed at $5.3925, a 36-cent increase for the week.
Stay tuned to andersonsgrain.com for additional commodity market information.