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3 Big Things Today, February 28, 2020

Soybean Futures Plunge Overnight; Export Sales of Beans, Corn Drop Week to Week.

1. Soybeans Drop Overnight on Coronavirus Fears, Slack Demand

Soybeans plunged overnight amid concerns about demand due to the coronavirus, or COVID-19, after a weak export sales report.

China’s National Health Commission said it now has 78,824 confirmed cases of the disease and 2,788 deaths, up from 78,497 cases and 2,744 deaths a day earlier.

In Japan, the island of Hokkaido declared a state emergency as 10 deaths have been reported in the country. South Korea announced another 571 cases, pushing the number to about 2,300. In the U.S., 15 confirmed cases have been reported.

Global markets and economies are taking a hit from the coronavirus as consumers have stopped spending due to quarantines and fears of travel.

The export sales report from the USDA showed export sales of soybeans were down week to week and badly missed expectations.

Soybean futures for March delivery dropped 9¼¢ to $8.85¾ a bushel overnight on the Chicago Board of Trade. Soymeal fell $1.20 to $302.40 a short ton, and soy oil lost 0.51¢ to 28.68¢ a pound.

Corn futures fell ¼¢ to $3.67¾ a bushel overnight.

Wheat futures for lower after the International Grains Council said it now expects global output at 769 million metric tons in the 2020-2021 marketing year, up from its outlook for 763 metric tons this year. It projects wheat harvested area next year up 2%.  

Wheat futures for May delivery dropped 5½¢ to $5.22 a bushel, while Kansas City futures declined 2½¢ to $4.49¼ a bushel.


2. Export Sales of Beans, Corn Drop Week to Week; Wheat Sales Rise

Export sales of soybeans were down week to week and badly missed expectations, according to the USDA.

Corn sales also fell, while wheat sales jumped.

Sales of soybeans to overseas buyers totaled 339,300 metric tons in the seven days that ended on February 20, down 31% from the previous week and 38% from the prior four-week average, the government said in a report.

Analysts had forecast sales from 600,000 to 900,000 metric tons, according to researcher Allendale.

Japan was the big buyer last week at 108,200 metric tons. China bought only 71,700 tons, Costa Rica was in for 69,500 tons, Germany purchased 66,000 tons, and South Korea took 58,400 tons, the USDA said.

The total would’ve been higher but an unknown buyer canceled shipments for 176,400 metric tons.

Corn export sale also declined, falling to 864,600 metric tons, down 31% week to week and 26% from the average, the agency said. The total is still within the expected range of 800,000 to 1.3 million metric tons.

Japan was also the biggest buyer of corn for the week at 316,700 metric tons. Mexico took 162,300 tons, Costa Rica was in for 146,600 tons, Colombia bought 104,500 tons, and South Korea purchased 67,100 tons of U.S. corn.

An unknown buyer canceled shipments for 111,500 metric tons, the USDA said.

Wheat sales, meanwhile, rose 10% week to  week to 381,800 metric tons. That, however, was down 23% from the prior four-week average, the agency said, and missed expectations.

Analysts had pegged sales from 425,000 to 700,000 metric tons.

Japan was again the big buyer at 116,800 metric tons, the Philippines bought 76,000 tons, Indonesia was in for 55,000 tons, Thailand purchased 45,200 tons, and Peru took 43,400 tons, the USDA said.


3. Flooding Continues Along Mississippi River in Several States; Lake-Effect Snow in Michigan

Flooding is still a major issue along the Mississippi River and its tributaries along the Missouri borders with Illinois and Tennessee and Arkansas’ border with Mississippi.

At Osceola, Arkansas, the river was at 34.5 feet as of late Thursday night, well above the flood state of 28 feet, according to the National Weather Service.

In New Madrid, Missouri, the river is at 37.3 feet, above flood stage of 34 feet, the agency said. At 38 feet, “heavy agricultural damage begins,” the NWS said in a report.

Strong thunderstorms are possible today in northeastern Arkansas and in the bootheel of Missouri this afternoon, the government said. Heavy rain also may persist starting Sunday and lasting through Wednesday.

Farther north, lake-effect snow showers are expected in much of western Michigan today and tonight, which will be accompanied by cold and windy conditions. As much as 2 inches of snow are possible, the NWS said.

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