Pandemic Effect on Grain Markets

03/26/2020 12:55 pm EST

Focus: COMMODITIES

Oliver Sloup

, Blue Line Futures

The response to the virus is hitting grains and jobless claims hit major record, reports Oliver Sloup.

Weekly jobless claims came in at 3,283,000. Expectations were for a huge spike, but this came out near the high end of the range. The stock market is under “moderate” pressure in the early morning, trading 2.25% lower, initially before rebounding. Crude oil is down, over a dollar.
Grain update:

Corn (ZCK)

May corn continue to grind higher yesterday, despite news that two more ethanol plants will be closing, due to negative margins. Export sales this morning came in at a whopping 1,814,300 for old crop corn, 81% above the four-week average. Assuming the world is still in one piece come Monday, attention will turn towards the Quarterly Stocks and Prospective Plantings report, out on Tuesday morning. We will have estimates available over the weekend.

The market came within a stone’s throw of our pivot pocket, $3.54 to $3.56 ¾, but failed to attract new buyers. If the bulls were able to chew through this pocket, we could see an extension.

Soybeans (ZSK)

May soybeans made a run at the psychologically and technically significant $9.00 level but fell short as profit taking from recent buying halted the rally. Weekly export sales this morning came in at 904,300 metric tons for old crop beans, 43% higher than last week. As mentioned with corn, assuming the world is still in one piece come Monday, attention will turn towards the Quarterly Stocks and Prospective Plantings report, out on Tuesday morning. We will have estimates available over the weekend.

The market fell just shy of printing $9.00, this is not only a psychologically significant level, but also technically as it represents strong support.

Chicago Wheat (ZWK)

Chicago wheat continued to scream higher yesterday, approaching the January high of $5.90 ¾. Weekly export sales came in at 740,000 metric tons, 73% higher than the four-week average. Some of this optimism likely priced into the market. There were some concerns that Russia would be closing ports, as of now they are keeping the food supply chain open, which includes exports.

Bill Baruch provides technical levels on all markets throughout the week at BlueLineFutures.comPlease sign up at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each day.Email us at info@bluelinefutures.com to start the conversation and set up a phone call with our experts.

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