Farms qualify for some SBA loansFarms with less than 500 employees qualify for Paycheck Protection Program Loans (to keep employees on payroll) under the $349 billion Small Business Administration (SBA) loan program, though some state SBA offices may tell you otherwise. However, most farms would be excluded from Economic Injury Disaster Loans (EIDL), according to analysis by the American Farm Bureau Federation, if SBA doesn’t expand annual receipts. But lawmakers and farm groups stress Congress intended to make the 3% loans available to farmers. Any change to EIDL eligibility could be part of a Phase 4 aid package, though that will take time to be enacted.

U.S. food supply chain in disarrayA growing number of beef, pork and poultry plants are slow-ing operations or temporarily closing due to Covid-19 impacts. Some packers are struggling to find buyers as consumer hoarding slowed, causing supplies to back up. Livestock and poultry producers can temporarily slow marketings and pack-ers can store meat in freezers. Dairy farmers/co-ops are being forced to dump milk because of reduced demand. Produce is also being hit hard as most supplies go to food service.

Sobering (but expected) ethanol dataU.S. ethanol production plunged 165,000 barrels per day (bpd) during the week ended March 27, the biggest single-week drop ever. The 840,000 bpd output was the lowest since September 2013. Despite the dramatic slowdown in produc-tion, ethanol stocks surged to a record 25.72 million barrels as gasoline demand plunged to a 26-year low. Ethanol stocks are estimated to be around 95% of total capacity.

CO2 supply a new hurdle for packersUSDA’s Food Safety and Inspection Service is permitting meat plants to use commercial-grade CO2 amid sharp sup-ply reductions from ethanol plants — the top supplier. There are other sources of CO2, but an industry source told us additional transportation costs are a concern, especially for those processors close to an ethanol plant.

Rough couple weeks ahead — The U.S. Covid-19 case count jumped to more than 245,000, with over 6,000 deaths. President Donald Trump warned the U.S. of a “very, very painful two weeks” ahead, saying there could be between 100,000 and 240,000 deaths, even if Americans followed the strict social distancing guidelines that were extended to the end of April. Corn futures posted new lows, despite China making its second major purchase of U.S. corn in the past two weeks. Soybean and wheat futures pulled back from their late-March highs but remain well above the lows posted last month. Livestock futures widened their steep discounts to the cash markets amid concerns about meat plant slowdowns. Front-month cattle futures plunged to a 10-year low. Front-month hog futures challenged the 2016 low.

USDA expects normal planted acres Total acres intended to be planted to the 14 major crops this year are estimated by USDA at 314.6 million acres, up around 16.5 million acres from last year after nearly 20 mil-lion acres of prevented plantings in 2019. Total area plant-ed to these 14 crops is expected to be right in line with the 2015-2018 average. While the total seems high given cur-rent new-crop prices, USDA’s Prospective Plantings esti-mate has been only 1.7 million acres too high on average over the past 20 years. For perspective on intended corn, soybean, spring wheat and cotton acres, see News page 2.

Non-farm payrolls plunge in MarchThe U.S. economy purged 701,000 non-farm payrolls in March, with two-thirds of the lost jobs in leisure and hospi-tality amid the Covid-19 restrictions. The unemployment rate surged 0.9 points — the largest monthly increase since January 1995. Nearly 10 million Americans lost jobs the final two weeks of last month. Timing of the March jobs data col-lection means the report for April will be much worse.

Brazil, Argentine soy crops fadingINTL FCStone cut 4 million metric tons (MMT) from its Brazilian soybean crop forecast, lowering it to 120.1 MMT. The Buenos Aires Grain Exchange lowered its Argentine soybean crop estimate by 2.5 MMT to 49.5 MMT.

Ag exports, imports slow in FebruaryThe U.S. exported $11.3 billion of ag goods in February and imported $10.6 billion for surplus of $711 million. The ag trade balance improved, but exports are usually the strongest through winter and imports typically peak during spring.

China moves to boost liquidityChina will cut the reserve requirement ratio (RRR) for small banks by 100 basis points in two equal steps — one on April 15 and the other on May 15. China’s March factory activity improved from a record low in February, but slumping export orders amid global Covid-19 slowdowns remain a headwind.

News this week...2 — Our analysis of USDA’s March planting intentions.3 — March 1 stocks signal changes to 2019 crop pegs. 4 — Spring/summer weather out- look not ideal, but not poor.

April 4, 2020 Vol. 48, No. 14

Go to ProFarmer.com

April 4, 2020 / News page 2

Follow us on Twitter:@ProFarmer@BGrete

@ChipFlory@JWilson29

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Whoa!... Cotton acreage intentionsProducers intend to plant 13.7 million acres to cotton, which would be down only 35,000 acres from last year and rough-ly 1.4 million acres more than our survey indicated. Cotton plantings are expected to rise 269,000 acres in Texas.

USDA’s planting intentions estimate seemingly defies logic with new-crop prices currently in the low-50¢ range. One explanation is that Southern growers have invested a lot of money in cotton equipment the past couple years and intend to use it with the government loan program acting as a put option, especially if they have revenue crop insurance.

USDA’s historical miss over the past 20 years is 586,000 acres and it has been too low compared with March inten-tions two-thirds of those years. USDA’s 90% confidence reliability is relatively high at 10.9%, which means there are high odds actual acreage could shift 1.5 million acres in either direction from March intentions.

Only a mild drop in spring wheat acres USDA estimates other spring wheat planting intentions at 12.6 million acres, which would be 70,000 acres less than last year but around 100,000 more than our survey indicat-ed. Spring wheat acres are expected to decline in North Dakota (down 600,000 to 6.1 million) and Minnesota (down 100,000 to 1.35 million). Spring wheat plantings are expect-ed to increase in Montana (up 400,000 acres to 3.3 million acres) and South Dakota (up 210,000 acres to 850,000 acres).

USDA’s durum planting intentions of nearly 1.3 million acres would be down 49,000 acres from last year and far less than our early March survey indicated.

USDA’s average miss for other spring wheat is 545,000 acres and 253,000 acres for durum over the past 20 years. The 90% confidence reliability is 9.6% for other spring wheat and 36.3% for durum. There are nine out of 10 odds other spring wheat acreage could move +/-1.2 million acres and durum could shift +/- about 500,000 acres from March intentions.

Our planted acreage expectationsBased on our state-level analysis of March planting intentions and revisions for historical data, our planted acreage esti-mates are as follows (assuming relatively normal weather):

• Corn: 95.8 million acres, down 1.2 million acres from March intentions.

• Soybeans: 84.5 million acres, up 1 million acres.• Other spring wheat: 12.6 million acres, unchanged.• Cotton: 13.0 million acres, down 700,000 acres.

Record corn + bean acres intendedUSDA’s Prospective Plantings Report estimated U.S. pro-ducers intend to plant 180.5 million acres to corn and soybeans combined, which would top the current record of 180.3 million acres in 2017.

Intended corn acres at just shy of 97 million would be up 7.3 million acres from last year and just shy of the mod-ern-era record of 97.3 million acres in 2012. Corn planting intentions were around 2.8 million acres more than our early March survey indicated.

Over the past 20 years, USDA’s March intentions

have been below final corn acreage 10 times and above 10 times, with an average miss of 1.1 million acres. The largest miss was 3.1 million acres last year.

We feel USDA’s March corn planting intentions are too high. But history tells us barring a repeat of last year’s disastrous spring weather, producers will plant around 95.9 million acres of corn (intentions minus the average historical miss), with 90% odds (USDA’s reliability factor) corn plantings won’t fall below 94.4 million acres this year.

Soybean planting inten-tions at 83.5 million would be up 7.4 million acres from last year and were around 300,000 acres less than our survey indicated.

Over the past 20 years, USDA’s March intentions have been below final soy-bean acreage nine times and above 11 times, with an average miss of 1.6 million

acres, which includes last year’s 8.5-million-acre miscalcu-lation due to adverse weather.

Soybeans have likely picked up some of the intended corn acres since USDA’s survey work was completed. Adding USDA’s average miss to March intentions would push soy-bean plantings up to 85.1 million acres. There are 90% odds (USDA’s reliability factor) that acres would not swell past 88.1 million acres this year, even if there’s major movement away from corn and other crops from March intentions.

Planting Intentions — Corn Change Million vs. 2019 AcresIllinois +800,000 11.3Indiana +800,000 5.8Iowa +600,000 14.1Kansas -100,000 6.3Michigan +500,000 2.5Minnesota +600,000 8.4Missouri +400,000 3.6Nebraska +400,000 10.5N. Dakota -300,000 3.2Ohio +900,000 3.7S. Dakota +1,650,000 6.0Wisconsin +100,000 3.9

Planting Intentions — Soybeans Change Million vs. 2019 AcresArkansas +250,000 2.9Illinois +550,000 10.5Indiana 0 5.4Iowa +100,000 9.3Kansas +450,000 5.0Michigan +440,000 2.4Minnesota +550,000 7.4Missouri +700,000 5.8Nebraska +200,000 5.1N. Dakota +1,000,000 6.6Ohio +500,000 4.8S. Dakota +1,900,000 5.4Wisconsin +200,000 1.95

April 4, 2020 / News page 3

Corn stocks below expectations for a fourth consecutive quarterMarch 1 corn stocks: 7.953 billion bu. (including some still unharvested bu.), down 8% from last year and the low-

est since 2015. Of the total, 4.454 billion bu. (56%) were stored on-farm and 3.499 billion bu. (44%) were off-farm. Second quarter 2019-20 indicated disappearance at 3.45 billion bu. was up 3.9% from last year.

March 1 soybean stocks: 2.253 billion bu., down 17% from last year. Of the total, 1.012 billion bu. (45%) were stored on-farm and 1.242 billion bu. (55%) were off-farm. Second quarter 2019-20 indicated disappearance of 1 billion bu. was down 1% from the same period last year.

March 1 wheat stocks: 1.412 billion bu. were down 11% from last year. Of the total, 339 million bu. (24%) were stored on-farm and 1.074 billion bu. (76%) were off-farm. Indicated disappearance during the third quarter of the 2019-20 mar-keting year was 428 million bu., up 3% from the same period last year.

Implications of March 1 stocks dataCorn stocks were 172 million bu. less than traders expected, implying second quarter feed use was stronger than

anticipated and/or the 2019 corn crop was overestimated. But any adjustment to feed use and/or crop size is likely to be fully or more than offset by falling corn-for-ethanol demand.

March 1 soybean stocks were 12 million bu. more than anticipated. Implied first-half residual use was the lowest in our data back to 1981-82, suggesting the 2019 soybean crop was underestimated.

ACTUAL DOANE FORECASTS*YearAgo

LastWeek

ThisWeek May June July-

Sept. (Monthly & quarterly avg.)

CORN Central IL, bushel 3.39 3.33 3.19 3.25 3.27 3.30 Omaha, NE, bushel 3.55 3.24 3.13 3.20 3.22 3.30 Dried distillers grain, IA, $/ton 142.00 173.18 170.00 -- -- --SOYBEANS Central IL, bushel 8.46 8.68 8.51 8.95 9.05 9.15 Memphis, TN, bushel 8.80 9.05 8.81 9.40 9.60 9.70 Soymeal, 48% Decatur, IL, ton 309.50 323.20 316.40 315 310 310WHEAT Kansas City, HRW, bushel 4.49 4.92 4.85 4.85 4.85 5.15 Minneapolis, 14% DNS, bushel 6.40 6.71 6.40 6.75 6.75 6.95 St. Louis, MO, SRW, bushel 5.03 6.00 5.65 5.75 5.75 5.90 Portland, OR, soft white, bushel 5.95 6.10 6.10 6.20 6.25 6.30 Northeast MT, durum, 13%, bushel 4.52 5.73 5.83 5.50 5.50 5.50SORGHUM, Kansas City, cwt. 5.85 6.23 5.98 6.00 6.05 6.10COTTON, 11/16 SLM, 7 area, ¢/lb. 71.59 47.60 43.23 50.00 52.50 58.00RICE, nearby futures, cwt. 10.67 13.74 14.04 13.65 13.50 12.90BARLEY, Montana, malting, cwt. 8.87 7.50 7.50 7.50 7.50 7.50OATS, Minneapolis No. 2 heavy, bushel 3.29 3.01 2.95 3.10 3.10 3.00ALFALFA, NW Iowa, lg. sq. prem., ton 175.00 137.50 130.00 142 140 140SUNFLOWERS, Fargo, ND, cwt. 17.50 20.80 20.30 20.25 19.85 18.75HOGS, Nat’l basecost cwt. 51%-52% 75.47 63.38 60.13 65.00 70.00 74.50FEEDER PIGS, 40 lbs., nat’l avg., head 86.96 50.89 46.36 65.50 62.00 59.50CHOICE STEERS, NE feedlots, cwt. 126.02 120.00 114.00 115.00 113.00 114.50FEEDER CATTLE, Oklahoma City

Steers, 700-800 lbs./cwt. 149.35 131.68 126.39 138.00 140.00 145.00Steers, 500-550 lbs./cwt. 193.52 -- 161.09 167.00 163.50 167.50Heifers, 450-500 lbs./cwt. 159.91 152.61 143.62 141.50 139.00 139.50

COWS, utility, Sioux Falls, SD, cwt. 56.37 65.62 55.13 60.00 63.00 64.00MILK, Class III, CME spot MO, cwt. 15.80 16.23 14.45 13.65 13.80 14.75LAMBS, Slg., San Angelo, TX, cwt. 131.15 162.25 -- -- -- --ENERGY

Ethanol, IA, gallon 1.28 0.82 0.81 -- -- --Farm diesel, U.S., gallon 2.35 2.27 2.18 2.20 2.17 2.24

*Average prices expected for the indicated time periods based on available information. Forecasts will be revised as necessary to reflect changing market conditions. Diesel prices are from Inputs Monitor.

Russia caps grain exportsAs expected, Russia will cap grain exports at 7 million metric tons (MMT) during the final three months of the 2019-20 mar-keting year. The quota represents about normal exports during the April-through-June quarter, but it will keep exporters from ramping up shipments.

Russia’s ag ministry also announced it will sell up to 1.5 MMT of older grain reserves on the domestic market to cover internal industry needs as the govern-ment tries to limit price impacts from the Covid-19 pandemic.

Ukraine caps wheat exports Ukraine’s grain traders agreed to limit wheat exports to 20.2 MMT in 2019-20 to temper a rise in domestic prices. Through March, the country has exported nearly 18 MMT of wheat. Ukraine’s grain traders union says the remaining 2.2 MMT for the final quarter of the marketing year would be “typical” and not restrain export efforts.

Kazakhstan to put quota on wheat, flour exports Kazakhstan will soon introduce monthly quota figures and allocation procedures for exports of wheat and flour to ensure plentiful domestic supplies. The quota on flour exports will replace a full ban on shipments that was put in place in March.

April 4, 2020 / News page 4

Weather challenges for U.S. crops are expected to be relatively minor this year. However, U.S. summer

crop threats will elevate if La Niña develops more quickly this spring. The biggest global grain and oilseed crop threats will be persistently dry and warm weather in eastern Europe and the Black Sea region, forecasters we talked with agreed.

World Weather: Minor planting delays, drier summer This will be a transition year as development of a La

Niña weather phase will probably come too late to cause significant dry weather stress for U.S. crops because of plentiful soil moisture.

The rapid snow melt after warmer winter temperatures means flood risks will not repeat 2019, Drew Learner, president of World Weather, says. There will be some flood-ing along both the Missouri and Red rivers, but it will be limited in both scope and duration. Some flooding is also forecast across the Delta and southern Midwest, which will lead to minor planting delays. The biggest yield threat may be early planting, because there will be a few shots of cold air that could hurt emergence and burn back early growth.

A drier and slightly warmer-than-normal pattern is expected to start in May and last through July, leading to some crop stress in parts of the Midwest. But he says abundant soil moisture evaporation should produce some timely rains. However, should La Niña conditions devel-op more quickly than expected the next three months, Lerner says that would increase risks of more significant dryness and heat, though not widespread drought.

Persistent weak upper air flows open the door to ridging and dryness in eastern Europe and the Black Sea region. Faster La Nina development would increase crop risks there.

Riskpulse: Normal planting, but watching ocean temps With U.S. snowcover 70% less than last year, the risk for

widespread flooding is low. Warming temps and drier weather into April point to a normal start to Midwest planting, according to Jon Davis, chief meteorologist at Riskpulse. Because the Polar Vortex stayed far to the north this winter, Davis does not expect any major frost or freezes throughout the Northern Hemisphere that will damage crops this spring.

Some early planting delays are likely from Arkansas to southern Ohio, but conditions will likely improve by late April or early May as the clash between cold and warm air

masses abates, easing the steady flow of rains over the region. Davis wants to see how fast Pacific Ocean temps cool

the next two months before making a summer forecast. Models are currently hinting at a quick La Niña evolution.

The Black Sea region is where models suggest there will be dry weather threats because of the persistence of ridg-ing the past two years and its early development this year.

CWG: Wet soils mean some planting challenges Soil moisture surpluses since last year will lead to peri-

ods of planting delays from Canada to Louisiana this year, according to the Commodity Weather Group.

There will be regional planting challenges, but right now they are not expected to be severe, Joel Widenor at CWG said. Still, there is a risk for more serious flooding based on similar analog years. The weak high-pressure ridge off the Pacific Northwest means storms could fun-nel through central United States.

CWG expects few summer weather risks, with weather leaning warmer and wetter for many areas. The driest areas will be the southwestern Plains and Midwest. The biggest risk will be that high soil moisture could lead to hot over-night temps that could damage corn pollination similar to 2010. CWG puts odds for adverse overnight temps at 40%.

CWG also believes the greatest weather risks this year will be dryness and warmer temperatures from eastern Europe through Ukraine and Russia. April rains are criti-cal for wheat crops, but the summer outlook is dry and warm, which would increase wheat crop stress and curb production outlooks for corn, sunflowers and other crops.

As much as 30% of Brazil’s safrinha corn crop is at risk for yield reductions if the current dry pattern in south-central areas of the country continues through April.

Radiant: No red flags for U.S. growing seasonWarmer and drier weather in February and March

helped melt snowcover across the Plains and Midwest, allowing frost to leave soils earlier this year. That sets the stage for a more normal planting season than 2019, accord-ing to Kyle Tapley, a meteorologist at Radiant Solutions. He says April and May look slightly warmer than normal, with much of the Midwest likely to receive normal rains.

His June outlook is warmer, though temps in July should be close to normal. Significant dryness is unlikely to develop this year to create widespread crop threats.

Minor planting delays followed by scattered summer heatby Sr. Market Analyst Jeff Wilson

News alert and analysis exclusively for Members of Professional Farmers of America® 402 1/2 Main St. Cedar Falls, Iowa 50613-9985General Manager Joel Jaeger • Editor Brian Grete • Editor Emeritus Chip Flory • Sr. Market Analyst Jeff Wilson • Chief Economist Bill Nelson • Washington Policy Analyst Jim Wiesemeyer

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Feed MonitorFEED

Corn Game Plan: We advised extend-ing all corn-for-feed coverage in the cash market through the end of May. Wait for signs of a low to add to coverage.

Meal Game Plan: Soybean meal needs should be covered through the middle of April in the cash market. We are prepared to go hand-to-mouth beyond current cov-erage unless there is a deeper pull back into the congestion range last winter.

Corn II’20 67% III’20 0% IV’20 0% I’21 0%

Meal II’20 15% III’20 0% IV’20 0% I’21 0%

Analysis page 1

$317.30

$304.10

DAILY MAY MEAL

$321.80

DAILY JUNE LEAN HOGS

Position Monitor

HOGS - Fundamental AnalysisFutures plunged to new lows on slower domestic pork demand even as exports continue strong. The market has swung from making sure there was enough pork to meet record consumer purchases to fears of oversupply. Pork cutout values fell 26% from a four-month high of $83.51 on March 23 to a 13-month low near $62 on April 1. The incredible weakness in bellies started the slide, but all major cuts have tumbled. New pork sales and shipments remain active. Cases of African swine fever are flaring again in China. Severe pork price weakness gives China a fantastic opportunity to accelerate purchases to meet U.S. trade deal commitments.

Game Plan: Fu-tures are trading at wide discounts to cash markets, even the summer-month contracts, making hedges too risky. We will evaluate fall hedges after a rebound.

CASH CATTLE ($/CWT.)

CASH HOGS ($/CWT.)

Position MonitorGame Plan: Futures’ dis-count to the cash market leaves few hedging opportunities. We are willing to keep all risk in the cash markets at this time.

Feds Feeders II’20 0% 0% III’20 0% 0% IV’20 0% 0% I’21 0% 0%

Bulls must clear the 40-day moving average (green line) and flat resistance at $100.35 to

signal a low.

Initial support from the weekly continuation chart is at $82.00.Additional support is at $78.70 (neither is shown).

Initial resistance at the trendline near $62.10 is backed by the 40-day

moving average (green line) near $74.65.

Initial support from the weekly continuation chart is at $55.00 and then $52.00 (neither is shown).

DAILY JUNE LIVE CATTLE

$100.35

$83.925

CATTLE - Fundamental AnalysisWhile both beef and cash prices remain well above their February lows, futures tumbled to new contract lows. Beef cutout values have given back about half of the more than $50 surge in mid-March. Packers also trimmed cash bids after the consumer run on grocery meat supplies subsided. Wholesale beef sales have slowed from the record sales two weeks ago, increasing speculation consumer freezers are full and they will wait to restock. The expanded and extended shelter-in-place orders are curtailing restaurant demand. Increasing industry angst on slaughter slowdowns due to coronavirus kept futures deeply discounted to cash.

$300.10

$311.10

$112.90

April 4, 2020ANALYSIS

Lean Hogs II’20 0% III’20 0% IV’20 0% I’21 0%

The $311.10 level is resistance again. Stronger resistance is at $321.80.

Initial support is the 40-day movingaverage near $306.60, then $300.10. $292.20

$336.30

April 4, 2020 / Analysis page 2

$5.06

DAILY MAY SRW WHEAT

WHEAT - Fundamental AnalysisSRW - Prices slumped to support on sluggish export sales, better U.S. crop ratings and falling corn prices. But record-low U.S. plantings, dryness in the Black Sea region and new quotas and bans from exporting nations are price supportive. Stronger sales will be needed to sustain a rebound.

Position Monitor

Game Plan: We want to be patient making fi-nal old-crop sales and adding new-crop sales, waiting to gauge world crop potential during spring development. Stronger export sales af-ter the recent break should lead rebounds.

A weekly close above resistance at $5.70 1/2 would project to the winter high at $5.90 3/4 and possibly long-term resistance at $6.00.

Initial support at the 40-day moving average (green line) is backed by the November low at $5.35 1/4. Strong support remains at $5.06.

$5.35 1/4

$5.70 1/2

$5.90 3/4

CORN EXPORT BOOKINGS (MMT)AVERAGE CORN BASIS (MAY)

CORN - Fundamental AnalysisFutures dropped to new contract lows after USDA projected the second-highest corn planted area in modern history. Weekly ethanol output fell to the lowest level since 2013, sending inventories to a record. Slower ethanol output curbed plant buying interest. Ethanol helped to offset a slow start to U.S. exports earlier this season, but the drop in production has masked the recent improvement in U.S. sales. USDA announced another big Chinese purchase of old- and new-crop corn on April 3. Stabilization could come from weather, with the U.S. planting season off to a delayed start and the Brazil safrihna crop in need of rain to ensure soil moisture before pollination and the dry season.

Bulls need a close above resistance at $3.75 to confirm a low.

Initial support is the April 2contract low at $3.46 3/4. Stronger support is at $3.40 and $3.30 from the weeklycontinuation chart (not shown).

$3.87 3/4

DAILY DECEMBER CORN

$4.04 1/2

$3.46 3/4

$3.75

DAILY MAY CORNPosition Monitor

Game Plan: We have advised a standing or-der to sell 15% of 2019-crop in the cash market if May futures hit $3.75. We are likely to make 2020-crop sales if this order is triggered. Plan to be aggressive on small recoveries, especially re-maining old-crop inventories. The price outlook for corn has been hurt by the Covid-19 outbreak and ethanol demand destruction from travel re-strictions and the oil price war.

Sustaining prices above broken support at $3.65 3/4and the 40-day moving average (green line) would

project to strong resistance at $3.77 1/2.

Below the March low at $3.32 there is support at $3.28 1/2 and then $3.18 1/4 on the weekly continuation chart (neither is shown).

$3.99

$3.77 1/2

$3.65 3/4

$3.32

’19 crop ’20 crop

Cash-only: 50% 0% Hedgers (cash sales): 50% 0% Futures/Options 0% 0%

’19 crop ’20 crop

Cash-only: 90% 30% Hedgers (cash sales): 90% 30% Futures/Options 0% 0%

April 4, 2020 / Analysis page 3

DAILY MAY HRS WHEATDAILY MAY HRW WHEAT

HRW ‑ As global Covid-19 infections top a million, importing nations are worried economic growth will be curtailed longer. Exporters are slowing sales and importers are building larger wheat inventories. No one wants a food crisis to add to the pandemic fears. Weather the next two months may determine price outlooks into 2021.

$9.37

DAILY NOVEMBER SOYBEANS

HRS ‑ The initial bread, pasta and flour hoarding phase may be over, but millers and exporters were eager to buy additional supplies on weakness. Russia increased the amount of reserve wheat that will be sold to domestic millers to curb price gains. Labor shortages from Covid-19 may curb output in India, the second biggest consumer.

$9.22 3/4

$8.36 3/4

$9.00

Initial resistance is at $5.51 1/2.

$5.51 1/2

$5.16Contract-lowsupport is at $5.03.

Initial resistance is at $4.65 3/4.Strong resistanceis at $5.11 3/4.

$4.65 3/4

$4.30

Strong support remains at $4.30.

$5.11 3/4

$5.03

Initial resistance is the 40-day moving average (green line) near $8.93.

The March 18 contract low at $8.36 3/4 is initial support. Weekly continuation chart support is at $8.25 (not shown).

SOYBEAN EXPORT BOOKINGS (MMT)AVERAGE SOYBEAN BASIS (MAY)

WHEAT EXPORT BOOKINGS (MMT)

AVERAGE WHEAT BASIS (MAY)

SOYBEANS - Fundamental AnalysisFutures fell on speculation U.S. farmers may switch corn and cotton acres to soybeans amid steep declines in those crop prices during the past month. While USDA’s March 1 stocks estimate was down 17% from a year ago, it was still the second largest on record. Still, U.S. export sales improved for a third straight week from a marketing-year low in early March. South American crop estimates are shrinking, which could aid U.S. sales. The market probably needs to see improved Chinese demand to sustain a rebound. Meal led the market lower, but export demand for the product should remain robust. Argentine exports began to decline in late 2019 and have remained slow to start 2020.

Initial support is the March 16 contract low at $8.21. Stronger support from the weeklycontinuation chart is at $7.95 (not shown).

$9.12 1/2

$9.73 1/2

Position Monitor ’19 crop ’20 crop

Cash-only: 50% 0% Hedgers (cash sales): 50% 0% Futures/Options 0% 0%

Game Plan: Maintain the standing order to sell another 10% of 2019-crop in the cash mar-ket if May futures hit $8.92. We are unlikely to make new-crop sales at the same time, as we don’t want to make initial 2020-crop sales below the spring crop insurance price. Look at rallies tied to South American export slow-downs or new export sales to China as selling opportunities.

DAILY MAY SOYBEANS

$8.21

A close above the downtrend line near $8.80would target stronger resistance at $9.12 1/2.

April 4, 2020 / Analysis page 4

’19 crop ’20 cropCash-only: 65% 0% Hedgers (cash sales): 65% 0% Futures/Options 0% 0%

75.61

Farmland Values & Cash Rents Stay ahead of the latest shifts in land values and cash rents on the farmland you own or are pre-paring to buy with LandOwner newsletter.

Good Friday Markets closed, government open.

FRI 4/105

USDA WASDE ReportLooking for higher corn stocks.

THUR 4/911:00 a.m. CT

4

Weekly Export Sales ReportOverseas demand is improving.

THUR 4/97:30 a.m. CT

3

USDA Crop Progress ReportFirst national winter wheat rating.

2

USDA Export InspectionsCorn, wheat loadings improving.

MON 4/610:00 a.m. CT

1

WATCH LIST

MON 4/63:00 p.m. CT

tracts as of March 24, the fewest since late April 2009. As of April 1, that net-short is probably more than 160,000 contracts, the most since September.

Funds will continue to press corn until ethanol fundamentals improve, with farmers intending to plant 97 mil-lion acres this year. The large and rising fund short is fuel for a rally, but a funda-mental story is needed to spark buying.

Since Feb. 20, open interest in soy-beans is down 82,000 contracts through March 31, or about 10%. Funds slashed their net short in CBOT soybean futures and options to 2,444 contracts from almost 90,000 contracts on Feb. 17, driv-en entirely by short covering. China purchases are needed to renew the rally.

Open interest in grain futures has been in free-fall since mid-February. Traders have been liquidating positions, waiting to see an improvement in the coronavi-rus situation before committing capital to the markets, one way, or the other.

The sharp reduction in open interest and issues with intraday liquidity sug-gest that not every move is rational.

Since Feb. 20, open interest in the corn market fell about 242,000 contracts, or 15%, through March 31.

In the week ended March 24, money managers extended their net short in corn futures and options to 108,549 con-tracts from 91,846 a week earlier. That was largely due to a reduction in out-right longs, which totaled 134,490 con-

By Sr. Market Analyst Jeff WilsonFROM THE BULLPEN

Commodities: The CRB Constant Commodity Index (CCI) fell 24% in the first quarter, topping the 20% drop in the S&P 500 stock index.

Stocks and commodities fell on fore-casts for U.S. second quarter growth to plummet 30% from Covid-19 and the nearly 70% plunge in oil prices crushing the U.S. energy and biofuel industries.

But, key Wall Street banks predict one of the fastest rebounds on record once the

GENERAL OUTLOOKpandemic peaks. Growth will be boosted by the bazooka blast of Federal Reserve liquidity and government aid equal to 10% of GDP. Consumers and businesses will be flush with cash once quarantines are lifted. This sets the stage for a quick jump in inflation and a weaker dollar.

The CCI must hold the long-term sup-port from the 2008 lows and the broken downtrend from the 2011 and 2014 highs to signal a mild commodity rebound.

DAILY MAY COTTON

Game Plan: Wait for rallies to make new sales. Loan economics cover downside risks below 52¢. Prepared to claim loan program payments on a confirmed low.

Position Monitor AVERAGE COTTON BASIS (MAY)

COTTON - Fundamental AnalysisThe plunge in cotton futures extended to an 11-year low on demand concerns. Export sales fell for a third straight week after hitting a marketing-year high. Shipments are 21% ahead of last year, and buyers will wait for signs of a low before adding to purchases.

COTTON EXPORT BOOKINGS (’000 BALES)

A close above the downtrend near 55.60¢ is needed for an extended price recovery.

Strong weekly chart support is at 45.00¢, then 40.00¢ (neither shown).

MONTHLY CRB CONSTANT COMMODITY INDEX

$322.53

64.88¢64.88¢

The index spiked to a 15-year low in March. The 2008 low at $322.53 is

key closing support.