March 2, 2020
US$ 98.09 down 1.09 for the week Volatile just like the rest
May corn futures were down 13 for the week but came off the lows Friday and are 4 higher this morning. What has changed? In my opinion nothing has. It is all a matter of what we don’t know. We don’t know how many acres of corn we will plant. We don’t know what the growing season will be like. Near term we do not know if/when the coronavirus will become under control. Which leads us to not knowing what demand may or may not develop in the near term. We know February is generally not a nice marketing month. Here we are in March and it appears to me we may not know any more until April. Kick the can.
Soybean futures lost only 6 cents last week and soybean meal gained 1060. Some say it is meal that will lead us out of the hole. It was brought to my attention this morning from an astute client that corn and soybean prices are near exactly what they were 1 year ago. How can we use that information? Pretty much just that markets appreciate in the spring as planting and growing are in the forefront. May futures are up 10 right against resistance at 906. So even though that is positive for the moment it is where the market closes that will tell the story.
February live cattle futures expired at 11270 and April live cattle futures lost 1067 for the week finishing at 10757. That was devastating to say the least. More than 5 dollars under the February, again devastating. This morning the April contract has rebounded more than 2 dollars, thank foodness. No that is not a typo. Think about it. It is all about food and who is going to eat it and how are they going to get it. Until those questions are answered it would be my opinion that resistance will be difficult to penetrate. With the cash trade down to 112 by Friday afternoon there would be little to say that bids will come out above that early. Many thoughts are that this is like the Tyson fire last August and that there will be a rebound, there are no guarantees. So we have plenty of supplies and carcass weights are working against us, in my opinion, stay current.
March milk futures lost 31 cents to end at 1631 and I don’t like to say it but that could have been a lot worse. Today there is little change. It is reported by USDA that all is lower for the week, milk, butter, cheese and the rest. The report also says that there are very available milk supplies. Not good.
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