March 16: New contract low for CBOT May #soybeans of $8.36-1/4 per bushel. Prior low before all of this was $8.54 on May 13, 2019. RSI < 24, a sign that the contract is heavily oversold.
May #corn has also found a new contract low of $3.58-1/2 per bushel, which is the lowest on a continuous chart since Sept. 12. RSI near 32 - not as extreme as soybeans.
Heading into growing season, these are pretty cheap prices. Sick or not, people still have to eat.
Corn -10 taking the biggest hit because of UNL plunging to 63c from lack of demand with the shut downs which will mean no ethanol blending from gas not sold.
In a way, we are getting just a small sample of what the corn world would be like without ethanol demand that eats up something like 40% of the corn supply.
Take all of that away and corn would probably become a $2 item again.
Which would cause more beans to get planted............and beans would come crashing down..........along with wheat and cotton that got more acres.
This is all that matters:
Are the lows in???
March 18: CBOT May #corn drops to a contract low of $3.32 per bushel. That is the lowest mark for the most-active contract since Sept. 30, 2016. Relative Strength Index dropped below 23 on Wed for the first time since July 2014. Values <30 usually indicate an oversold market.
CBOT #corn, #soybeans & #wheat futures in the 20, 50 & 100 days after the worst 10-day period in the U.S. stock market in 1987 & 2008 (2020 tbd). The 1987 crash didn't have a drastic impact in the short term, and then prices surged on the 1988 U.S. drought. But 2008... (cont.)
For #corn, this is what that period looked like in 2008. You can also see what ensued in the following years.
Planting weather is usually important as we get into April, mainly for early planting of corn. The CV has obliterated the unleaded gas price from the shut downs and demand destruction and this is killing the corn market as lack of blending of ethanol to gas not sold will cause ethanol supplies to turn into a massive glut.
Ethanol plants will likely have to shut down.
The weather has been too wet/cold for early planting and soils saturated/water logged in many areas but we have a big pattern change on the way that will dry things out and warm soils in April.
Bearish for corn. Not as bearish as ethanol demand falling off a cliff because of the shut downs and lack of demand for fuel because of minimal traveling but just adding to it.
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Corn -3c right now.
Beans +6c and +10c from the lows which were made on the open.
I wonder if producers will switch more acres out of corn due to the ethanol price ? It will be interesting to see if this happens if we do get a warm dry April with good corn planting conditions.
One would think there would be switching from corn to bean acres at these prices and the very bleak outlook for corn.
Beans 8.70 and corn 3.42 is a ratio of 2.54 but that could increase and make beans more profitable.
But excellent planting in April/May always favors more corn acres.