Weekly Market Wrap-Up
Grain Market Commentary
Friday, March 6, 2020
by Paul Matthews, Associate Merchant, The Andersons
The week kicked off with grain prices mixed amidst continued volatility in equity markets which has been spurred on by coronavirus fears. Given the negativity the market was facing going into Monday, values surged on the close and finished in positive territory with the DOW scoring its biggest one-day point gain ever.
With February wrapping up, prices for crop insurance guarantees came in at $3.88/bu for corn, and $9.17/bu for soybeans.
Export inspections reported Monday pegged corn down slightly at just under 900 thousand metric tons, soybeans up 74 thousand metric tons, and wheat up 218 thousand metric tons against last week’s numbers.
Tuesday began with a firmer tone carried in from Monday’s close. Global markets were looking to and hoping for action against the coronavirus from today’s G7 Summit in Europe, but it appears that it will not be so. Finance officials at the summit, which is attended by the world’s seven largest advanced economies did not state any specific action at this time, but simply stated that they are ready to limit the fallout from coronavirus.
Wednesday’s trade carried some of the momentum for soybeans that was seen over the last two sessions. This price action for soybeans appears precarious as the trade will be keeping an eye on Argentina and any change with export tariffs there. The South American farmer may hold tight to their soybeans if the export tax is too severe.
Thursday saw a reversal of price trends seen earlier in the week. Equities continue to swing wildly, keeping markets on edge and preventing managed money from leaning into the commodity space. Export sales data reported wheat net sales up 42%, corn down 11%, and soybeans up 2% from last week.
Friday concluded the week with more general market weakness in early trading and it is very apparent that commodities and equities alike will remain so until progress is made against coronavirus. In the meantime, the trade will look to the next update from the USDA which will be Tuesday, March 10th.The report will contain updated supply and demand tables and crop production data.
May corn futures opened the week at $3.6825 and closed at $3.76 an 8-cent increase for the week.
May soybean futures opened at $8.9225 and closed at $8.9125, a 1-cent decrease on the week.
May wheat futures opened the week at $5.20 and closed at $5.1575, a 5-cent decrease for the week.
Stay tuned to andersonsgrain.com for additional commodity market information.