News this week Happy Easter: Hope springs eternal — 2 · 2020. 4. 9. · ghum, soybeans, beef and pork for 2019-20 delivery. It also bought U.S. beans for 2020-21. China canceled

Push to make farms eligible for EIDLCurrent regulations say most farms are not eligible for Economic Injury Disaster Loans (EIDL), though as we report-ed last week, there’s a push to get that changed. One Washington source told us, “I see no reason why farmers and ranchers should not be eligible. A loan is a loan.” Farms are eligible for Paycheck Protection Program (PPP) Loans. The eligibility requirements for PPP loans are on News page 3.

Farmer Covid-19 aid ‘sooner than later’USDA Secretary Sonny Perdue wants the $23.5 billion avail-able for aid to farmers to be “balanced and fair.” The farmer aid pool includes $9.5 billion via the Phase 3 rescue pack-age, plus $6 billion USDA has remaining in its Commodity Credit Corporation (CCC) account. Another $14 billion in CCC replenishment funds will be available in July. Livestock, poultry and produce farmers are likely to see the first aid. Perdue wants to push back aid to growers of prin-cipal crops until summer so it does not influence plantings.

Potential hog supply reduction program? There are discussions in the hog industry about whether

there should be a sow and pig buyout program. But some are skeptical it would work. One source told us, “For the most efficient operators with low marginal costs, are they going to stop them from expanding and negating the buyout?”

Gov’t meat, dairy purchases likelyHefty purchases of beef, pork, poultry, produce and dairy products for food banks and other outlets are likely in the next farmer aid package. One of the challenges is limited refrigeration and freezer space at food donation centers.

USDA expands cattle/beef probeUSDA will include price action during the Covid-19 outbreak in its probe into potential cattle price fixing. USDA will try “to determine the divergence between box and live beef prices.” Lawmakers have also asked the Justice Department to investigate potential price fixing by beef packers.

Happy Easter: Hope springs eternal — Alexander Pope’s famous phrase “hope springs eternal” is especially relevant this year. As we face the uncertainty and changes brought on by the Covid-19 situation, we are reminded that in our darkest hours, brighter days lie ahead. Easter is the season of new life and new beginnings as we celebrate Christ’s resurrection. Spring is also a time for new life and new beginnings for farmers and ranch-ers. We are reminded of this through the joys of experiencing our spring calf crop or a new litter of pigs that will be raised to provide meat for others. We are reminded of this as we work our soils and put seeds in the ground so we can feed the world. We hope you carry the joy of Easter through your daily lives. Better times are ahead — hope springs eternal.

Fed rolls out more economic aidThe Fed’s new $2.3 trillion aid package includes:

• Supplying liquidity to financial institutions through term financing backed by PPP loans to small businesses.

• Ensuring credit to small and mid-sized businesses with the purchase of up to $600 billion in loans via the Main Street Lending Program. Treasury will provide $75 billion in equity.

• Increasing credit to households and businesses by up to $850 billion, backed by $85 billion in protection from Treasury.

• Establishing a Municipal Liquidity Facility that will offer up to $500 billion in lending to states and municipali-ties. Treasury will provide $35 billion of credit protection.

Ethanol purge acceleratesU.S. ethanol production plunged to an RFS-era low of 672,000 barrels per day during the week ended April 3, and stocks surged to a record 27.1 million barrels. Ethanol refinery runs are under 76% and industry sources signal they likely need to drop around another 10% with plant storage near capacity.

Brazil cuts bean crop, raises corn pegBrazil lowered its soybean crop estimate by 2.1 million met-ric tons (MMT) to 122.1 MMT. Its corn crop was raised 1.8 MMT to a record 101.9 MMT. Brazil now expects to export 34.5 MMT of corn in 2019-20, up 500,000 metric tons (MT) from its prior forecast but down 6.7 MMT from last year. Brazil has not issued a soybean export forecast for 2019-20.

Price plunge triggers China ag buys In the week ended April 2, China bought U.S. corn, sor-ghum, soybeans, beef and pork for 2019-20 delivery. It also bought U.S. beans for 2020-21. China canceled 2019-20 cotton purchases but bought some for 2020-21. China’s ag buys have picked up, but are far below expected levels to meet its Phase 1 targets this year. We’ll have more on that next week.

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News this week...2 — Brazil keeps strong price advantage for soybeans. 3 — USDA reiterates farms qualify for SBA loans.4 — Breakdown of USDA’s April WASDE Report.

April 11, 2020 Vol. 48, No. 15

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April 11, 2020 / News page 2

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Winter wheat ratings notably improve USDA’s initial winter wheat crop assessment of the spring rated 62% of the crop in “good” to “excellent” condition. That was up 10 points from its final national ratings in late November, six points higher than last year’s initial ratings of the spring and 15 points higher than average.

When USDA’s crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500 point scale, with 500 being perfect), the HRW wheat crop improved 2.6 points from last fall to 349.6 points and is 23.4 points above the five-year average. The SRW CCI rating jumped 24.1 points to 362.9 points and is 7.2 points higher than the five-year average.

Historic data indicates a reasonable correlation between the initial winter wheat condition ratings of the spring and final yields. While there is a lot of time and weather between now and the harvest, yield potential appears to be better than the five-year average of 49.9 bu. per acre.

China releases more soybean stocksChina released another 500,000 metric tons of soybeans from its state reserves for state-owned COFCO to use for commercial crushing. That’s now 1 MMT of state soybean reserves that have been released to alleviate temporary shortages as importers await more shipments. As of April 7, Chinese soybean stocks were estimated at 3.5 MMT, just above record lows posted in March.

Soybean Export Price ($ per MT)

Jan. 15 April 6

$370

$360

$350

$340

$330

Corn Export Price ($ per MT)

Jan. 15 April 6

$195$190$185$180$175

U.S. = OrangeBrazil = Green

Argentina = Blue

$170$165$160$320

U.S. = OrangeBrazil = Green

Argentina = Blue

Brazil soybean crop estimate cutPoor yields out of Rio Grande do Sul prompted South American Crop Consultant Dr. Michael Cordonnier to lower his Brazilian soybean crop estimate by 1 million metric tons (MMT) to 121 MMT. The Brazilian soybean crop looked like a sure record until recently, but the far southern state “is having the worst soybean crop in recent memory.” Cordonnier’s estimate would be 1 MMT lower than the 2017-18 record of 122 MMT.

At the start of the growing season, it was projected Rio Grande do Sul could produce approximately 19.5 MMT of soybeans, but most current estimates are about half of that total given prolonged drought in the state.

Cordonnier kept his Brazilian corn crop estimate at 98 MMT, which is below most other forecasts. He estimates 30% to 40% of the safrinha corn crop is dealing with drier-than-normal conditions, meaning timely rains will be need-ed after the rainy season that typically ends this month.

Argentine bean crop lowered, tooCordonnier also lowered his Argentine soybean crop esti-mate by 1 MMT to 50 MMT. Early yields in the northern core producing region are good, but those should be some of the best across the country.

Cordonnier made no change to his Argentine corn crop estimate of 49 MMT. Recent rains should help later-planted corn that is still filling grain.

Real continues to give Brazilian soybean exports a strong price advantageBrazil’s real hit an all-time high of nearly 5.4 per U.S. dollar April 3. As the chart on the lower left shows, that is giving Brazil a major price advantage over U.S. soybeans shipped out of the Gulf. Brazilian soybeans are plentiful, with harvest nearly 90% complete and new-crop supplies flowing to ports. While Brazilian ports are running a little slower than normal due to extra precautions, there have been only minor shipping delays due to Covid-19. Argentine soy export prices are cur-rently the cheapest of the three, but there have been more shipping disruptions there amid the Covid-19 pandemic.

It’s a different situation with corn. Brazil is tight on old-crop corn, pushing its prices up and making U.S. supplies cheaper. Brazilian livestock producers and feed mills will need to import corn from May for-ward, according to meat lobby group ABPA. The country will likely first turn to Argentina and Paraguay for corn. The sharp devaluation of the real against the dollar makes U.S. supplies less attractive to Brazilian importers.


Beef demand most at risk Impacts to the U.S. meat industry from Covid-19 restrictions and closures will likely be greater for beef than pork and poultry. Domestic beef use is about a 50/50 split between retail (primarily grocery stores) and food services (restau-rants, schools, hotels, etc.). For pork, it’s about two-thirds retail and one-third food services. And for chicken, it’s about 40% each for restaurants and food services, with the other portion used primarily for pet food. With many restaurants reduced to carryout orders and most schools and hotels closed, food service demand has taken a major hit, which impacts beef the most. Retail sales will go up with sharply increased at-home cooking, but not enough to offset the food service losses. But the greatest impact will be to high-volume restaurant items (see “From the Bullpen” on Analysis page 4).

Strong meat exports will help but won’t be enough to offset lost domestic demand. Beef relies more on domestic demand than pork or chicken, which have far more of their total consumption tied to exports. Beef exports are pro-jected to increase 8% from last year and hit an all-time record. But beef exports are only expected to account for 12% of total consumption. One-fifth of all chicken meat demand comes from overseas customers, while exports are expected to account for 35% of pork total consumption.

String of record pork exports extends U.S. pork exports totaled 658.2 million lbs. in February, shattering the previous high for the month from 2018 by 34%. Exports to China surged 544% from last year, account-ing for 29% of total U.S. pork shipments in February, despite port disruptions due to the Covid-19 outbreak. There were also significant increases in U.S. pork exports to Mexico, Japan and Canada. Through the first two months of 2020, U.S. pork shipments at 1.321 billion lbs. were just over 42% ahead of last year’s record pace.

Record beef exports in February, tooU.S. beef shipments of 257.0 million lbs. topped last year by 44.8 million pounds (21%). Exports to Japan and South Korea surged 32% and 37%, respectively, while shipments to China increased 16%. Through February, beef exports at 502.1 million lbs. were up nearly 12% from last year.

Chicken exports hit six-year high U.S. broiler meat exports in February totaled 581.7 million lbs. — the highest for the month since 2014. Exports to Mexico increased 21% from year-ago and accounted for over one-fifth of all shipments. Exports to China were the highest monthly total since March 2016.

USDA: Ag producers, farmers and ranchers eligible for SBA’s PPP loansThe Corona Aid, Relief, and Economic Security (CARES) Act provides $349 billion for the Paycheck Protection Program (PPP) to help small businesses, including farmers and ranchers, support their payrolls during the Covid-19 situation. USDA released the following answers to questions about PPP eligibility for farmers and ranchers. Q: Are ag producers, farmers and ranchers eligible for the Small Business Administration’s (SBA’s) PPP loans?

A: Ag producers, farmers and ranchers are eligible for PPP loans if: (i) they have 500 or fewer employees, OR (ii) they fit within the revenue-based size standard of average annual receipts of $1 million.

Additionally, a farm can qualify for PPP if it meets SBA’s “alternative size standard.” The “alternative size standard” is currently: (1) a maximum net worth of the business not more than $15 million, AND (2) the average net income of the business for the two full fiscal years before the date of the application is not more than $5 million.Q: Are agricultural and other forms of cooperatives eligible for PPP?

A: As long as other eligibility requirements are met, small agricultural cooperatives may receive PPP loans. Other forms of cooperatives may be eligible provided they comply with all other loan program requirements.Q: Do H-2A or H-2B workers on my payroll count toward my eligibility and total possible loan amount?

A: Only employees with a principal place of residence in the U.S. count toward eligibility and calculation of PPP loans.Q: How do sole proprietor farmers provide accurate documentation regarding payroll if they don’t take a traditional salary?

A: SBA requires documentation the business was in operation as of Feb. 15, 2020 and you must provide supporting documentation to demonstrate the qualifying payroll amount.

Documentation options for payroll tax filings include the following:• IRS Form 941 (quarterly wages); IRS Form 944 (calendar year wages); State income, payroll and unemployment insur-

ance filings; QuickBooks; bank repository accounts; and/or internally generated profit and loss statements. However:• Nonprofit organizations must include IRS Form 990;• Sole proprietors must include IRS Form 1040 Schedule C;• Any entity that filed IRS Form 1099-MISC must include this filing;• Seasonal employers must document the period beginning Feb. 15, 2019 through June 30, 2019.


Corn — USDA raised old-crop corn carryover by 200 million bu. from last month to 2.092 billion bushels. On the supply side of the balance sheet, USDA lowered projected imports by 5 million bushels (to 45 million bu.). On the usage side of the ledger, USDA raised feed and residual use by 150 million bu. (to 5.675 billion bu. — the highest in 12 years) and cut food, seed and indus-trial use by 355 million bu. (to 6.465 billion bu.), with corn-for-ethanol use slashed 375 million bu. (to 5.05 billion bu.) amid “an unprecedented decline in ethanol production and motor gasoline consumption as the result of Covid-19.” That means other industrial use was increased 20 million bu. from last month. USDA kept its export projection at 1.725 billion bushels.

We anticipate USDA will make further cuts to corn-for-ethanol use, which we currently forecast at 4.925 billion bu., the lowest since 4.641 billion bu. in the 2012-13 marketing year.

• USDA 2019-20 price: $3.60, down 20¢ from last month.USDA raised global corn ending stocks excluding China by 5.8 million met-

ric tons (MMT) from last month to 104.1 MMT amid the bigger U.S. inventories. Global stocks outside of China would still be down 6.5 MMT from 2018-19.

Soybeans — USDA raised its old-crop soybean ending stocks forecast by 55 million bu. from last month to 480 million bushels. It raised the crush projec-tion by 20 million bu. to a record 2.125 billion bushels. That was more than offset by cuts of 50 million bu. to exports (to 1.775 billion bu.), 2 million bu. to seed use (to 97 million bu.) and 24 million bu. to residual use (to 5 million bu.).

• USDA 2019-20 price: $8.65, down a nickel from March. USDA cut global soybean ending stocks outside of China to 77.7 MMT, down

3 MMT from last month. USDA lowered its 2019-20 production estimates for Brazil by 1.5 MMT to 124.5 MMT and for Argentina by 2 MMT to 52 MMT.

Wheat — USDA raised its old-crop wheat ending stocks figure by 30 million bu. from March to 970 million bushels. It cut feed and residual use and exports by 15 million bu. each to 135 million bu. and 985 million bu., respectively.

• USDA 2019-20 price: $4.60, up a nickel from March. USDA increased global wheat carryover outside of China by nearly 3.6

MMT from last month. World old-crop wheat stocks excluding China are now expected to rise 4.1 MMT from 2018-19.

Cotton — USDA dramatically increased its old-crop cotton carryover projec-tion by 1.6 million bales from last month to 6.7 million bales. USDA slashed its export forecast by 1.5 million bales (to 15 million bales) and trimmed domestic use by 100,000 bales (to 2.9 million bales). USDA noted, “A develop-ing global economic slowdown with little precedent is expected to signifi-cantly reduce global cotton demand and trade.”

• USDA 2019-20 price: 59¢, down 1¢ from last month. USDA raised global cotton carryover excluding China by 7.1 million bales

from last month to 56.0 million bales. World stockpiles outside of China are now projected to jump 11.4 million bales from 2018-19.

Corn CarryoverU.S. (Bil. Bu.)/Global* (MMT)

Soybean CarryoverU.S. (Mil. Bu.)/Global* (MMT)

Wheat CarryoverU.S. (Mil. Bu.)/Global* (MMT)

Cotton CarryoverU.S. (Mil. Bales)/Global* (Mil. Bales)

* Without China

* Without China

* Without China

* Without China

Big increases in most U.S., global ending stocksby Editor Brian Grete and 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

Digital Managing Editor Meghan Vick • Inputs Monitor Editor Davis Michaelsen • Sr. Economist Rob Hatchett • Sr. Economist Alan BarrettSubscription Services: 1-800-772-0023 • Editorial: 1-888-698-0487

©2020 Professional Farmers of America, Inc. • E-mail address: [email protected] Journal CEO, Andrew Weber • Division President Grey Montgomery

Feed MonitorFEED

Corn Game Plan: We have advised ex-tending all corn-for-feed coverage in the cash market through the end of May. We plan to be patient and wait for confirma-tion of a low to add to coverage.

Meal Game Plan: On April 8, we ad-vised extending soybean meal purchas-es six weeks in the cash market through the end of the May. We plan to extend coverage if there is further weakness.

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

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

Analysis page 1

$317.30

$304.10

DAILY MAY MEAL

DAILY JUNE LEAN HOGS

Position Monitor

HOGS - Fundamental AnalysisNearby futures rebounded from the lowest price since 2002 on the weekly continuation chart. The discount to cash narrowed by 50% by midweek, a sign that traders may have priced in the worst-case scenario of slower slaughter operations and reduced restaurant demand from Covid-19. Pork cutouts continued to fall, but sales were strong. Cash belly prices fell to the lowest point since 1999, while loins are the only primal cut higher for the year. That reflects the cut in restaurant bacon demand and increased demand for pork chops at home. Bacon demand at groceries is hot, but getting enough supplies in retail packaging has been a hurdle.

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

CATTLE SLAUGHTER (’000 HEAD)

HOG SLAUGHTER (’000 HEAD)

Position MonitorGame Plan: We will be w a t c h i n g futures’ pre-miums to cash for hedging oppor-tunities. 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-daymoving average (green line) and flat resistance at $100.35 to signal a low.

Initial support is the April 6 contract low at $76.60. Stronger support from the weekly continuation chart is at $73.40 and $72.65 (neither shown).

Resistance is at the top of the April 1 gap at $59.325 and

March 30 gap $64.25.

Initial support is the April 6 contract low at $43.825. Stronger support from the weekly continuation chart is at $40.60 and then $37.50 (neither is shown).

DAILY JUNE LIVE CATTLE

$100.35

$83.925

CATTLE - Fundamental AnalysisWhile market volatility continues to rise, price declines have stopped. A rebound in U.S. stock markets and speculation the worst of the coronavirus panic selling has passed, putting focus on the wide discount futures are trading to the cash market. Slaughter is slowing as packers realigned sales to meet grocer demand. Negotiated trade volume fell to the lowest level since at least 2002, as packers are cautious about buying ahead. Prime premium to Choice fell to the lowest point in about a year on reduced restaurant demand. Futures will follow cash market trends into month’s end, with cash cattle undervalued relative to wholesale beef.

$311.10

$112.90

$75.65

$64.25

$59.325

$76.60

April 11, 2020ANALYSIS

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

Initial resistance is the broken uptrend line near $301.00. Stronger resistance is at $311.10.

The contract low at $290.70 is initial support, followed by $286.40 on the continuation chart.

$290.70

$43.825$43.825

April 11, 2020 / Analysis page 2

$5.06

DAILY MAY SRW WHEAT

WHEAT - Fundamental AnalysisSRW - Prices rose on cold weather concerns in the U.S. and drying soils increasing risks for European and Black Sea crops. Daily weather updates will dominate price discovery the next six weeks. Rising world prices are improving U.S. competitiveness, but sales have bean slow to increase.

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. Market strength will also depend on stronger export sales.

A weekly close above resistance at $5.70 1/2 would project to the winter high at $5.90 3/4.

The 40-day moving average (green line)is backed by horizontal support at $5.38. Strong support remains at $5.06.

$5.38

$5.70 1/2

$5.90 3/4

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

CORN - Fundamental AnalysisFutures bounced slightly from new 3 1/2-year lows on fund short-covering. Weekly U.S. export sales and shipments rose to a marketing-year high as low prices are generating overseas buying, including rumored and confirmed business with China. U.S. corn is the cheapest origin, and Brazilian feed mills may import corn after aggressively exporting old-crop supplies and depleting inventories. A drying trend remains in parts of Brazil and will become a larger yield threat by late this month if it continues. But improving exports cannot offset the demand destruction from reduced ethanol production. Output in the latest week fell to record low and inventories soared to a record.

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

Initial support is the April 6contract low at $3.46 1/4. 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 1/4

$3.75

DAILY MAY CORNPosition Monitor

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

Initial resistance at the 40-day moving average (green line) near $3.60 is backed by strong

resistance at $3.65 3/4.

Initial support is the April 6 contract low at $3.25 1/2. Stronger support from the weekly continuation chart is at $3.18 1/4 (not shown).

$3.99

$3.77 1/2

$3.65 3/4

$3.25 1/2

’19 crop ’20 crop

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

’19 crop ’20 crop



DAILY MAY HRS WHEATDAILY MAY HRW WHEAT

HRW ‑ Initial spring crop ratings showed the crop improved from November and was the highest rated since 2010. Prices ignored the current ratings amid freezing temperature forecasts through April 17. The extent of rallies still depends more on drying trends from Europe to Russia and Ukraine. More rains will be needed by early May.

$9.37

DAILY NOVEMBER SOYBEANS

HRS ‑ Colder and wetter conditions developing this month for the Northern Plains and Canadian Prairies increase planting concerns. The wheat market will continue to find support from importing nations increasing forward purchases to build food security supplies amid fears the Covid-19 pandemic may last longer.

$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.

Strong resistanceis at $5.11 3/4.

$4.65 3/4

$4.30

Initial support at $4.65 3/4 is closely backed by the 40-day moving average.

$5.11 3/4

$5.03

The 40-day moving average (green line) aligns with the March high to form initial resistance.

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 trended sideways, pausing in the middle of the past three-week range. The sharp retreat in soymeal prices continued, cutting crusher margins more than 25¢ in two weeks and slowing new processor demand for supplies. Market bulls have been disappointed by only token Chinese purchases of U.S soybeans since the trade deal was signed. While much of the buying was expected to be focused on new-crop orders, the small sales to date have kept pressure on the market. The good news is that Chinese soybean demand is ahead of last year’s pace and U.S. export prices to China are near Brazil’s offers for summer delivery and cheaper from August to January.

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


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 sales below the spring crop insurance price. Look at ral-lies tied to new export slowdowns in South America or fresh export sales to China as sell-ing opportunities.

DAILY MAY SOYBEANS

$8.21

A close above the downtrend line near $8.76would target stronger resistance at $9.12 1/2.


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

75.61

New Member App Download the Pro Farmer app, included with your membership! Search for “Pro Farmer” in your app store. Available on Apple and Android devices.

Weekly Export Sales ReportCorn sales rising, soy sales slowing.

THUR 4/167:30 a.m. CT

5

NOPA Soybean Crush ReportMarch crush expected strong.

WED 4/1511:00 a.m. CT

4

U.S. Retail Sales ReportMarch sales seen sharply lower.

WED 4/157:30 a.m. CT

3

USDA Crop Progress ReportFirst corn planting update.

2

USDA Export InspectionsCorn shipments increasing.

MON 4/1310:00 a.m. CT

1

WATCH LIST

MON 4/133:00 p.m. CT

packers are making those changes to meet at-home consumption. In the 2009 Great Recession, consumers continued buying beef, but they bought more ham-burger and fewer steaks.

After the consumer panic purchases three weeks ago, grocery sales are returned to more normal levels in the past week as consumers replenish sup-plies, according to Dr. David Anderson, ag economist at Texas A&M University.

Consumer confidence and how quickly people go back to work and start spending are keys to recovery once lockdowns ease.

“Will they spend or will they be scared and hoard the money,” Anderson asks, saying that will determine meat demand. Everyone is hoping for a V-shape recovery.

The impact of the Covid-19 pandemic remains dynamic and important to both domestic and export meat demand.

The magnitude and duration of shifts toward at-home consumption and the prevalence of beef and pork in those meals has increased during the “shelter-in-place” guidelines, according to Kansas State University survey data.

The restaurant shutdowns are having a bigger impact on individual meat cuts. Pork bellies, chicken wings and breasts and beef ribeyes and filets have been pressured the most. Consumers are using more ground beef because it is a versatile protein for at-home meals.

Carcass primals are cut differently for restaurants than for grocery stores and

By Sr. Market Analyst Jeff WilsonFROM THE BULLPEN

Market Volatility: After grappling with intense market volatility during the month of March as efforts to contain the spread of the Covid-19 choked the econ-omy, investors were cheered by numbers showing that the pace of new confirmed infections and deaths was slowing.

Stocks soared on the news and the Volatility Index (VIX) fell almost 50%. Still, a volatility index reading above 40 signals traders expect continued big mood

GENERAL OUTLOOKand price swings on a daily basis, depend-ing on the latest Covid-19 headlines.

Investors remain nervous, buying puts on rallies and buying calls on big price breaks. Markets are looking for clues as to the depth and duration of the recession and its impact on consumer spending.

The unprecedented emergency lend-ing and government spending programs suggest a strong recovery once the stay-at-home restrictions are lifted.

DAILY MAY COTTON

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

Position Monitor AVERAGE COTTON BASIS (MAY)

COTTON - Fundamental AnalysisFutures rebounded on short-covering and improving sentiment that the pan-demic may be reaching a peak. The world must still get back to work and see improved consumer spending to trigger global mill production. Texas cotton planting is off to a fast start.

COTTON EXPORT BOOKINGS (’000 BALES)

DAILY S&P 500 STOCKS & VOLATILITY INDEX

The VIX remains high,but stocks areshowing signsthe recessionwon’t be as bad as feared.

Initial resistance is the April 1 contract low at 48.35¢. Strong weekly chart support is at 45.00¢then 40.00¢ (neither is shown).

48.35¢48.35¢

A close above the downtrend could trigger a recovery to the 40-day

moving average (green line).

64.88¢64.88¢

News this week Happy Easter: Hope springs eternal — 2 · 2020. 4. 9. · ghum, soybeans, beef and pork for 2019-20 delivery. It also bought U.S. beans for 2020-21. China canceled

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