February 24, 2020
US$ 99.19 up .19 for the week Now we have a problem
March corn futures were down 1 cent for the week. What a difference two weeks makes. The March futures contract slipped below the 374 support and is not flirting with 370. We will be hearing a lot about the coronavirus causing more or less a global slow down. We see crude oil down two dollars and the DOW down 1000 earlier this morning. At the same time the Ag outlook people are talking about 94 and plus acres of corn being planted in 2020. Oh my, wasn’t 2019 bad enough. All I can say is that we still need to plant those acres and the corn still needs to grow but those are the numbers that we are up against.
Soybean futures lost 4 cents for the week and are in deep trouble. Especially with the overnight and the early trade this morning nothing but lower. But here is the thing. Last week gurus were saying that China was not buying soybeans because of the coronavirus however EFG called BS on that report because Brazil sold them a ton of soybeans. It comes to my attention that perhaps the Phase 1 trade agreement was not near ironclad. One hope would be that we are near the price of our soybeans that China can “afford”.
February live cattle futures lost 207 for the week and another 250 this morning getting us down to 117. The cash market was kind of steady with 120 trades available in most areas. I’ll bet that bid is not out there this morning. This reminds me of the old saying “anything can happen”. Because the February futures expire this Friday and April is still limit down near mid-day at 11525 it appears that bids this week will probably be three dollars lower to start. Keep in mind that the cattle on feed report Friday was not bearish but at least neutral. We certainly need to remove the uncertainty about the spread of this virus before clearer heads will prevail.
March milk futures lost 38 cents for the week ending in the low 1660’s. That is getting ugly again. Surprisingly that market is only down 12-15 this morning. Reports from USDA state that even with winter weather being harsh in the Midwest milk output continues to be steady to growing, again not what we need to hear. For more bad news both cheese and butter traded lower for the week.
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