April 6th, 2020

CORN

Corn closed the day lower. Futures continue to come under pressure as energy prices decrease demand for ethanol. Stay-at-home orders continue to limit the use of gasoline and as a result U.S. gasoline consumption has dropped by approximately 40%, resulting in a slowdown/shuttering of ethanol plant across the U.S. News that the meeting between Saudi Arabia & Russia, to discuss slowing oil production, had been delayed until later this week also added to the bearish tone. Weekly U.S. corn export inspections were a bright spot today, exceeding trader expectations and notching a new marketing year high at 50.06 mln. bu. Now that the calendar has turned to April, traders are monitoring U.S. spring fieldwork and planting conditions. Current weather maps suggest the Midwest will see showers throughout the week with cooler temperatures expected this weekend. Although, longer-term forecasts call for improved conditions in May. Thursday will bring the updated April WASDE report. This will include the March stocks numbers, and likely start to include some of the demand changes that have been brought on by the coronavirus. One of the most watched areas will be ethanol demand. The average trade estimate for U.S. corn ending stocks in Thursday’s report is 2.004 bln. bu. vs. 1.892 bln. in March.

SOYBEANS

Beans closed the session higher today. The continued lowering of S. American soybean production estimates along with talk of a possible increase in Chinese demand offered some support. As of midday, funds were estimated to have bought approximately 3,000 contracts of beans. Weekly U.S. soybean export inspections were disappointing this morning at 10.95 mln. bu. This was well below the “needed” weekly pace of 29.69 mln. bu. to reach USDA’s current soybean export forecast for the marketing year. For comparison purposes, Brazil exported 123 mln. bu. of soybeans last week. Harvest continues in Brazil and is estimated at 86% complete vs. an 80% historical average. Weather maps for S. America indicate central and northern Brazil will receive rainfall through Tuesday, while southern Brazil is expected to be drier. Conditions for Argentina look dry and cool throughout the week. Thursday will bring the updated April WASDE report. The average trade estimate for U.S. soybean ending stocks is 430 mln. bu. vs. 425 mln. in March. The average estimate for Brazilian soy production is 123.88 MMT’s compared to 126.0 MMT last month. The average estimate for Argentina’s bean crop is 52.49 MMT’s vs. 54.0 MMT’s in March.