Weekly Market Wrap-Up
Grain Market Commentary
Friday, March 27, 2020
by Paul Matthews, Associate Merchant, The Andersons
This week began with overnight markets for grains showing follow-thru from last week’s strong finish, especially in wheat and soybeans. Wheat broke through a one-month high on the front end while soybeans look to continue a positive trend spiking up in a fourth consecutive session. This looks to be correlated strongly to a drop in the U.S. Dollar which for two sessions thus far has proven to be highly volatile. Adding to this is a sharp rise in U.S. demand for milling wheat which fueling a comeback. Corn is a reluctant follower, albeit volatile on its own ahead of huge uncertainty regarding demand and crude oil prices in the future.
Export inspections Monday reported corn down 168 thousand metric tons, soybeans up 76 thousand metric tons, and wheat down 120 thousand metric tons from last week’s figures.
Tuesday was a softer trade with wheat and soybeans taking back a chunk of the previous days’ close. Some news trickled in that a main export hub in Argentina did reopen after having been closed to contain the spread of coronavirus. This reopening may keep pressure on the recent soybean rally.
The recent decline in value of the U.S. dollar has also made the U.S. more competitive in global markets which would typically support stronger commodity prices. Dow futures rose over 11% on Tuesday with news of an economic stimulus from the White House and Senate leaders.
Wednesday began with a continuation of the previous days’ trend as the trade looks to confirm more Chinese ag sales this week, and the details of the economic stimulus deal that was reached in the early morning hours. It was also another big day for the stock market with the Dow once again surging higher to end the day.
Thursday’s jobs report as expected came in with a staggering increase of 3 million unemployment claims to end the week. This figure nearly quadrupled a consensus of claims, however the stock market was surprisingly positive in its response, once again surging higher for the day.
Export sales data released Thursday were strong and pegged wheat sales up 73%, corn up 81%, and soybeans up 43% from last week’s figures.
Friday was considerably more volatile especially for front month wheat futures but finished the day quietly with corn, beans, and wheat all finishing in positive territory to end the week. Apart from the trade is looking towards next week’s USDA report that will include a much anticipated and debated intended acres figure.
May corn futures opened the week at $3.4025 and closed at $3.46, a 6-cent increase for the week.
May soybean futures opened at $8.60 and closed at $8.815, a 21-cent increase for the week.
May wheat futures opened the week at $5.395 and closed at $5.71, a 32-cent increase for the week.
Stay tuned to andersonsgrain.com for additional commodity market information.