GOOD MORNING,

The much anticipated report has come and gone, with much less fanfare than expected.  This morning, prices are lower across the board as the impact of the cornovirus continues, along with bearish sentiment from that report, and macro pressure.   Surprisingly, corn is down the least despite yesterday's bearish corn stats. 

The corn acreage at 97.0 mln acres would be record high, but in reality it could just be the largest number in print for the season.  Right now, the economics for planting beans rather than corn is strong, with most analysts plugging in more bean acres and less corn as ethanol plants struggle.  After yesterday's report, funds covered May corn contracts and sold July and December.  The net short corn position post report did not contract, with funds futures / options around 165K short.  On the plus side for US corn is that it is now the most competitive globally.    Cash markets are mostly steady, while Gulf bids have a firmer tone with what appears to be more export business.  Corn stocks were lower than expected as implied disappearance over the quarter was 3.45 bln bu, slightly more than last quarter, despite what many though was a "short" 2019 crop.

In the soy complex, bean acreage was generally lower than expected.  Prices saw a bit of unwinding of previous meal/soyoil trade on news that China was in talks to drop its ban on Canadian rapeseed.  Crush margins declined while soyoil reacted with prices rallying.   Soyoil is lower this morning on the back of falling palm oil, which fell over 2% on demand concerns.  Meal and beans are lower as Argentina's AcSoja reports that despite earlier problems with lock-downs, the fed. gov. stepped in to keep traffic flowing in most states, as well as to help ports continue operations.  

All wheat crop prices remained well bid as the all-wheat planted acres at 44.7 mln was not too far below the average trade estimates of 45.0 mln.  Wheat is lower today on profit-taking.  Russian President Putin will meet with other gov. officials to discuss grain export quotas that the ministry has proposed.  

WEATHER 

SA - Brazil remains dry in the southern areas, while scattered showers in central /southern Argentina benefit filling beans, but stressing areas that are missed.  

US - Wet conditions remain in the Delta but a noticeable drier stretch is due this week.  Showers will return again over the weekend.  The 6/10 day outlook for many areas includes showers throughout the week.  Conditions need to turn drier in order to allow fieldwork to get done.

ANNOUNCEMENTS

Brazil's ANEX top executive said the group sees March 2020 bean exports to reach a record 13.1 mmt, vs. 12.0 mmt prev.

Brazil's bean production in the southern region was revised downward, to 123.5 mln tons for 2019/20 as a drought caused crop failure in Rio Grade do Sul, as reported by Agroconsult.  

China's Ag Ministry said another truck of illegally transported piglets found in Sichuan was found to have African Swine Fever.  

CALLS

Calls are lower across the board:

beans:  10-13 lower

meal:  3.00-3.80 lower

soyoil:  40-55 lower

corn:  1 1/2-2 1/2 lower

wheat:  4-6 lower

OUTSIDE MARKETS

Weaker crude at $20/barrel, the US dollar trades up to 99.77, with stocks off 750 pts.   

TECH TALK

• May bean chart has been an $8.70 to $8.95 trading range, but multiple tops at $8.88/$8.89 are now stronger than support levels, which increases the chance that prices break $8.70 for lower trade.   Look to test $8.71 at the open in all likelihood, with a break of that level opening the door for a trade down to $8.60/$8.65.  Given the report, however, beans cannot get too cheap vs. corn.  
• May meal charts now turn more bearish, breaking the bottom of a wide uptrend channel.  That could open the door down to the bottom of the last break at $315.00, and then to the swing point of $313.00.  Prices are still sideways from higher, and deep pullbacks should probably be owned or priced.  
• May corn travels towards the lower end of the range and contract lows at $3.32, with a stiff line of resistance forming overhead.  Prices remain open to testing these contract lows as resistance moves down to $3.40/$3.42.  There is not a good reversal signal in place yet to stabilize this market, so lower levels can still be placed.  However, prices may benefit as May short contracts are rolled forward.  
• July wheat still consolidates from $5.50-$5.70, but would not sell this market unless prices can drop below $5.50.  The price action feels extremely well bid, despite opening weakness.  Converging lines of support at $5.43 and $5.30 will be buying opportunities.  
• May soyoil futures peak at 2738c, and the chart suggests that any further weakness under 2650c takes prices back to 26c.  

DECEMBER CORN

Bear market trade now as new ctr lows are placed at $3.52 1/4.  New lows beget new lows, and the downtrend is very strong.  The presence of a new ctr low targets the $3.45 level at this point in time, as the top end of the trading range is lowered to $3.65/$3.70.  Volume spiked on the downside yesterday as fund selling was noted into commercial pricing activity.  The down-trend is strengthening with an ADX reading of 39, meaning funds will continue to sell rallies.  Since the previous price congestion was about 20c, (from $3.70-$3.90), can flip 20c to break-down level of $3.65 for a $3.45 to $3.50 target, minimally.  

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America