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COMMODITY REPORT: March 13th 2020.


Corn and soybean prices both declined this past week, with CME corn down 1.3 percent and soy lower by a noteworthy 4.1 percent. Anticipated increases in price have not occurred after signing the Phase-One of the trade agreement with China and also ratification of USMCA by Congress. Prospects for commodity exports to China are currently restrained by the logistic restrictions imposed by the ongoing COVID-19 outbreak.


Uncertainties still include:-

  • The extent and timing of soybean purchases by China in 2020. The U.S - China Phase-One agreement incorporating U.S. tariff rescissions, promised purchases of agricultural commodities, concessions on some structural issues by China and strengthened enforcement provisions
  • The market is now less optimistic that future shipments of soybeans to China will take place according to the quantities promised by the Administration after signing the Phase-One agreement. Total soybean shipments YTD have amounted to 1.13 million tons, (41.5 million bushels), approximately 22 percent of the quantity consigned during the corresponding period in 2019.
  • Justifiable uncertainty regarding the spread of COVID-19 to other Asian nations, Europe and North America with the potential to create a worldwide recession.

Questions still exist:-

  • Traders are reviewing projected ending stocks and taking into account the relative sizes of both corn and soybean harvests in 2019 and planting intentions for 2020. The volume of exports of soybeans to China is still uncertain.
  • Brexit is now a reality following legal departure of the U.K. from the E.U. on January 31st 2020 and a final customs break scheduled at the end of January 2021.
  • A U.S. trade agreement with the U.K. should be concluded in 2020 but trade with the U.S. will be conditioned by commitments to the E.U. by the departing nation. A bilateral agreement appears in jeopardy over disagreements over the use of Huawei communications equipment by the U.K. and chlorination used in processing of U.S. chicken.
  • The relationship with the E.U. is tenuous especially with the threat of retaliatory tariffs by the U.S. on food products from France and auto imports from Germany.


Compared with the March 6th 2020 close, the CME quotation for March corn posted at close of trading on March 13th was down 5 cents per bushel to 373 cents, continuing the loss during the previous week. Soybeans, expected to be the beneficiary of the Phase-One agreement, were down 36 cents per bushel to 846 cents.


For consecutive years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019.


China placed orders for one million metric tons of soybeans from Brazil during the first week of February 2020. A total of 20.5 million metric tons has been ordered for delivery through May 2020. This quantity is equivalent to 754 million bushels or 42 percent of the projected total U.S. export of soybeans in 2020 as documented in the March 2020 WASDE #598. The purchases by China from Brazil are ascribed to competitive prices compared to the U.S. The USDA recorded exports of previously- ordered consignments amounting to132,000 tons (two shiploads) of U.S. soybeans during the week ending February 27th.


The following extracts from the January 10th 2020 edition of the USDA Grain Stocks Report indicate the levels of storage on farms and in fields and off-farm for corn and soybeans in early December 2019.

  • Corn stored in all positions on December 1, 2019 totaled 11.4 billion bushels, down five percent from December 1 st 2018. Of the total stocks, 7.18 billion bushels are stored on farms, down four percent from a year earlier. Off-farm stocks, at 4.21 billion bushels, are down six percent from a year ago. The September through November 2019 data indicated disappearance at 4.52 billion bushels, compared with 4.54 billion bushels during the same period last year.
  • Soybeans stored in all positions on December 1 st 2019 totaled 3.25 billion bushels, down 13 percent from December 1st 2018. Soybean stocks stored on farms totaled 1.53 billion bushels, down 21 percent from a year ago. Off-farm stocks, at 1.73 billion bushels, are down five percent from December 2018. Indicated disappearance for September through November 2019 totaled 1.22 billion bushels, up eight percent from the same period a year earlier.


The following quotations were posted by the CME at close of trading on March 13th 2020 compared with values for March 6th 2020 (in parentheses) reflecting specified months for delivery.



Corn (cents per bushel)

March 373 (378)

May 366 (376)

Soybeans (cents per bushel)

March 846 (882)

May 848 (890)

Soybean meal ($ per ton)

March 299 (301)

May 300 (305)

Changes in the price of corn, soybeans and soybean meal over five trading days this past week were:-


Corn: March quotation down 5 cents per bushel           (-1.3 percent)

Soybeans: March quotation down 36 cents per Bushel (-4.1 percent)

Soybean Meal: March quotation down $2 per ton         (-0.7 percent)

  • For each 10 cent per bushel change in corn:-
    • The cost of egg production would change by 0.45 cent per dozen
    • The cost of broiler production would change by 0.25 cent per pound live weight
  • For each $10 per ton change in the price of soybean meal:-
    • The cost of egg production would change by 0.44 cent per dozen
    • The cost of broiler production would change by 0.25 cent per pound live weight



The USDA Farm Futures Survey of 728 respondents suggests that 97.3 million acres of corn and 80.6 million acres of soybeans will be planted in 2020.


Subscribers are referred to the March 11th WASDE #598 under the STATISTICS tab.


Prices of commodities are influenced by projections of ending stocks from the 2019 harvest, 2020 exports and domestic use.

USDA Chief Economist Robert Johansen speaking at the 96th Agricultural Outlook Forum indicated that U.S. agricultural commodities to the value of $14 billion would be imported by China in 2020, far short of the $40 to $50 billion per year promised by the White House in terms of the Phase-One Agreement. In the light of decreased demand in China due to COVID-19 and port congestion the volumes suggested by Dr. Johansen may be optimistic.


During 2018 and 2019 a total of $28 billion was disbursed to the agricultural sector in Market Facilitation Program (MFP) payments. Additional requests are being made by industry groups for 2020 MFP relief and these may be justified by delayed or possibly lower imports by China. President Donald Trump stated that the Federal Government would “provide additional aid to U.S. farmers as needed until recently negotiated trade deals with China, Mexico, Canada and other countries fully kick in”. MFP payments would be funded by tariff revenue representing a transfer of money from consumers to the agricultural sector.