Tuesday February 25, 2020

• Markets mixed this morning with a correction to yesterday’s COVID-19 sell off. Fear still lingers but yesterday may have been an over reaction
  • The markets need to feel Coronavirus has peaked before significant buying interest returns
• Crude oil prices continue to trend lower putting more pressure on the CAD
• Yesterday police removed a key blockade helping shipments in Canada to start moving again
• Corn inspections for exports  were on the higher end of expectations and about 100k tonnes higher than the previous week whereas beans were below expectations and almost half the previous week. Wheat was mid range
  • Bean exports have slowed possibly due to COVID-19 fear and a record crop being harvested out of Brazil
• Current bean vs corn futures favor the US producer to plant corn at 2.37 which is slightly below the 5y avg
• Corn planting in Brazil (Mato Grosso) is behind last year by 11 points but ahead of the average pace by also 11 points with almost a quarter of the crop planted last week alone
• Brazil has increased funding for loans to Farmers by 5 billion Real, these loans help producers store and transport their grain as well as purchase inputs for the next year
• With the recent waivers from the Chinese govt U.S beans are once again competitive. However with the current crop in Brazil and the USD to Real exchange rate we could see Brazil lower prices to continue to be China’s favored source of beans. Phase one of the trade deal only guarantees US shipments “if market prices dictate”