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Ontario Grain Commentary, April 15, 2020

COMMODITY PERIOD PRICE WEEKLY MOVEMENT
Corn CBOT May     3.19¼   ↓ 10 ¾ cents
Soybeans CBOT May     8.42 ↓  12 ½ cents
Wheat CBOT May     5.40¼ ↓ 8 cents
Wheat Minn. May     5.14 ↓   16 cents
Wheat Kansas May     4.79½ ↑   1 ½ cents
Oats CBOT May     2.85½ ↑   10 cents
       
Canadian $ Mar     0.7128 9 points

Corn

On April 13, the USDA released its first 2020 Crop Progress report. U.S. farmers have planted 3% of their expected crop. This is equal to last year and 1% lower than the five-year average. The question is, will U.S. farmers plant 97 million acres of corn? Domestic demand for feed and ethanol is declining; suppliers will need to look to export markets to move grain. Without strong exports, the U.S. could end up with a burdensome corn supply which would further depress prices.

Brazilian corn exports are down due to a rise in domestic consumption along with strong demand for livestock feed. There is talk of the need to import corn as domestic demand grows. Another attributing factor is a reduced stockpile of corn resulting from an aggressive exports pace in 2019. Due to the devalued Brazilian currency versus the U.S. dollar, Brazil is hesitant at this time to import from the U.S. and will likely look to Argentina and Paraguay.

Soybean

Brazil has shipped 6.3 million tonnes of soybeans in April thus far. This is a 50% increase in shipments from the previous month. With the rising demands from Chinese crushers, Brazilian exports could continue to climb. The depreciation of the Brazilian currency over that of the U.S. have made Brazilian soybeans much lower in price for international buyers.

The closure of several U.S. meat packing plants has increased fear of reductions in soymeal demand. This has put further pressure on the soybean futures.

Wheat

According to the USDA, for the week ending April 9, U.S. wheat inspected for exports was 608,709 tonnes. The majority of this is expected to be shipped through the Pacific Northwest into Asian markets.  Exports are also expected out of the Gulf coast for Latin America destinations.

Egypt has recently purchased 120,000 tonnes of Russian wheat split between two delivery windows of 60,000 tonnes each. Traders were expecting a larger purchase after the Egyptian government announced it would look to import 800,000 tonnes of grain to boost its strategic reserves.  The prices received were high enough to discourage any larger purchase. The winning bids were $249.56 C&F (cost and freight) and $252.50 C&F respectively.

2019 cash prices for April 15, 2020, at the market close, are as follows:

SWW at $286.22/mt ($7.79/bu), HRW at $293.95/mt ($8.00 /bu),
HRS at $ 246.91/mt ($6.72/bu), and SRW at $286.22 /mt ($7.79/bu).

We currently offer 2020 and 2021 harvest prices as well, please call 1-800-265-0550 for more information.

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