Soybean Futures Rise on Potential Labor Shortages From Coronavirus
Soybeans for May delivery rose 2.3% to $8.62 1/2 a bushel on the Chicago Board of Trade on Friday, as traders speculated that South American ports could face worker shortages amid the coronavirus pandemic.
Soybean Squeeze: Reports that Argentina, the world's largest exporter of soy products, could suspend port operations as part of efforts to contain the new coronavirus lifted soybean futures. "The bean market feels like there are no soybeans out there from the cash bids," said Charlie Sernatinger of ED&F Man Capital. "There are a lot of moving parts here, but most of them point up."
China Makes First Wave of Major Grain Purchasing -- Market Talk
09:39 ET - Chinese buyers have made their first wave of major grain export purchasing, according to the USDA. The USDA says China bought 756,000 metric tons of US corn for delivery during the 2019/20 marketing year, while buying 340,000 tons of hard red winter wheat. Additionally, 110,000 tons of soybeans were sold to unknown destinations for the 2019/20 marketing year, which traders believe to also be Chinese buying. These purchases will likely support grain futures Friday, although it remains to be seen how much the market already priced in expectations of Chinese buying in the recent rally. "I think that was part of it on top of bottom picking after the funds sold an estimated 140,000 contracts over six days," says Terry Reilly of Futures International. (firstname.lastname@example.org; @kirkmaltais)
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China Unlikely to Meet Phase-One Agricultural Obligations -- Market Talk
13:11 ET - Even with China purchasing more than 750,000 metric tons of US corn, as well as a sizable tonnage of wheat, China is unlikely to meet its target of $36B worth of US agricultural export purchases in 2020, says Todd Hubbs, a professor with the Agricultural and Consumer Economics department of the University of Illinois. According to Hubbs, China started the year too slowly in agriculture purchases, slowed mostly by the spread of coronavirus throughout Asia earlier this year. However, Hubbs adds, China will likely continue to buy sizable portions of US exports throughout the year. (email@example.com; @kirkmaltais)
Corn Futures Down as Ethanol Plants Close -- Market Talk
14:02 ET - Corn futures on the CBOT stayed down for most of the day, due to continued rumblings of closures of ethanol plants due to poor margins. "Corn has been the downside leader as the US ethanol industry continues to shutter facilities amid deeply red margins," says AgResource. Grains traders, on the whole, have generally been tentative in their trading Friday, although prices for wheat and soybeans have been on the rise as traders see good deals for futures. "Traders are not willing to take on new risk ahead of an uncertain weekend," the research firm says. (firstname.lastname@example.org; @kirkmaltais)
Changes to Worker and Transportation Ability Could Impact Grains -- Market Talk
12:59 ET - The biggest changes to the agricultural supply chain due to coronavirus could be because of labor issues at grain processing facilities and with transportation. "How will we respond when our processing plant workers get Covid-19?" says Gary Schnitkey, a professor with the agricultural and consumer economics department at the University of Illinois. What may result is short-term price volatility, says Schnitkey. "We'll likely see spiky, erratic price points as supply chains adjust." (email@example.com; @kirkmaltais)
Livestock Futures Finish Trading Mixed -- Market Talk
15:50 ET - Live cattle futures finish trading 0.7% higher at 89.525 cents a pound, while hog futures fall 1.7% at 67.95c. Livestock futures in general may turn around next week, Craig Turner of Daniels Trading says. "Beef, pork and poultry demand will be strong and we still maintain livestock markets will be the first to bottom," Turner says. (firstname.lastname@example.org; @kirkmaltais)