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DAILY AG MARKET VIEW REPORT 

April 3, 2020  |  Follow us on Twitter @TradeADMIS  | Download PDF

Soybeans, soymeal and corn traded lower. Wheat and soyoil traded higher. US stocks were lower. US Dollar was higher. Crude was higher. 

SOYBEANS

Soybean and soymeal traded lower. There is some concern about global meat and protein demand as the virus spreads. Almost half of the World population is in lock down. There is some concern about logistics in US, Argentina and Malaysia.  Price Index of 8 edible oils continues to trend lower. US soybean export commit is near 1,354 mil bu vs 1,601 last year. March South America soybean exports were near 12.7 mmt vs 9.2 last year. Informa lowered their estimate of World 2020 crop 2 mmt to near 368 versus 340 last year. One private group lowered Brazil crop to 120. Argentina lowered their crop to 49.5. Next week USDA will issue new US and World supply and demand estimates. Some feel they could lower US soybean export demand which could increase carryout.

Apr 3 Soybeans Ending Stocks

 

CORN

Corn futures traded lower. Concern about US domestic and export demand continues to weigh on prices. Early trade was higher following higher energy prices. Funds turned sellers adding to an already large net short position. US corn export commit is near 1,256 mil bu vs 1,700 last year. Drop in US domestic ethanol production and talk final US exports may not meet USDA goal offers resistance to prices. Next week, USDA will issue new US and World supply and demand numbers. Trade expected them to lower US 2019/20 corn ethanol use and exports. China bought 567 mt US corn mostly new crop. Informa raised their estimate of World 2020 corn crop 9 mmt to near 1,167 versus 1,113 last year. They raised US crop 7 mmt to 403 versus 347 last year. Next week US Midwest could see cooler temps. This could reduce rainfall. On our farm in C IL best starting date to plant corn is near April 20.

Corn Ending Stocks Apr 3 

WHEAT

Wheat futures traded higher. Fact Russia approved an export quota offered support. Russia weather is also drier than normal and as temps warm seasonally more rain will be needed. This week US wheat export commit is near 910 mil bu vs 893 last year. Also this week, Informa lowered their estimate of World 2020 wheat crop 8 mmt to near 760 versus 764 last year. They lower EU crop 5 mmt to 143. They also lowered India crop 6 mmt to 104. They raised the Russia crop 4 mmt to 82. Next week USDA will issue new US and World supply and demand numbers. USDA is not expected to make big changes to either the US or World numbers. For 2020/21, most could see a lower US crop and lower US carryout. This suggest US weather will be key to prices.

World Wheat Stocks Apr 3

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by Archer Daniels Midland Company.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright © ADM Investor Services, Inc.

  DAILY AM FINANCIAL MARKET OUTLOOK REPORT 

April 3 PDF   Stock Index Futures Holding Up Despite Bearish News

STOCK INDEX FUTURES

Nonfarm payrolls fell 701,000 in March when a decline of 150,000 was expected. The unemployment rate for March increased to 4.4%, which compares to the anticipated 3.8%. 

The 8:45 central time March final services PMI is expected to be 38.7 and the 9:00 March Institute for Supply Management nonmanufacturing PMI is anticipated to be 43.5. 

Stock index futures are higher now than they were when the weaker than expected U.S. employment numbers were released. This suggests there could be a move higher later today for stock index futures. 

Traders may be anticipating more accommodation is coming from the world’s central banks.

Futures cut gains as jobless claims surge by more than 6 million

CURRENCY FUTURES

The U.S. dollar is higher despite the large decline in U.S. nonfarm payrolls. 

The euro currency is lower after the March euro zone composite PMI fell to 29.7 when 31.4 was forecast. In February composite PMI was 51.6. 

In addition, there was pressure on the euro on news that German new car registrations fell 38% in March, which is the largest decline in the passenger car market in one month since Germany was reunified.   

The British pound is lower after March data indicated the steepest downturn across the U.K. service sector in over two decades.

INTEREST RATE MARKET FUTURES

Futures rallied in the overnight trade on the belief that more accommodation is forthcoming from the world’s central banks. 

Today the People's Bank of China said it would cut the reserve requirement ratio for city commercial banks and rural lenders by one percentage point, which would free up 400 billion yuan ($56.48 billion) in liquidity in the banking system. The PBOC said the reserve ratio will be reduced in two batches on April 15 and May 15. 

On Wednesday the Federal Reserve said it was temporarily taking measures to ease a capital requirement for large banks to address strained conditions in the Treasury market.   The Fed said it was easing the supplementary leverage ratio for one year and hoped the change would free up lenders' ability to serve homeowners and businesses.    

There did not appear to be any new flight to quality buying coming into the market when the weak U.S. nonfarm payrolls report was released. If I am correct in my belief that stock index futures can trade higher on the day, the interest rate futures market will trend lower from the current higher levels.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by Archer Daniels Midland Company.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc. 

MONTHLY COMMODITY MARKET REVIEW

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INFOGRAPHIC SNAPSHOTS

USDA ACREAGE & STOCKS REPORT (released March 31)
March 31 USDA Report
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USDA SUPPLY/DEMAND REPORT (released March 10)
USDA March 10
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