Soy Meal Has Been the Leader

Soy Meal Has Been the Leader

阿根廷的新提高税收结构从年初开始转移了美国的需求。

Argentina and Brazil’s current port issues including threats of strikes and new safety protocols for coronavirus.

乙醇磨的放缓firming distillers values leading to increased domestic meal demand as a protein feed alternative.

The rebuilding of Chinese feed demand as they try to move beyond African swine fever and coronavirus combined with slowed South American logistics have led to nearby supply tightness of beans/meal.

A huge unwinding of long oil and short meal positions – one month ago, managed money was long 52k oil and short 68k meal.

Spot crush margins have surged to 16 month highs at $1.40/bushel.

FBN’s Take On What It Means:This combination of factors has resulted in a sharp rally in US soy meal values that we believe will continue to underpin soybean prices.

Ethanol Production Expected to Slow

This morning, the EIA data will release ethanol production for the week ending March 24th.

Estimates are calling for production in the range of 950-975 thousand barrels per day (kbd) vs 1,035 kbd last week.

尽管本周的数字将反映出放缓，但在下周的生产数字中，运行率可能会更加急剧下降。

Ethanol plant slow-downs increase as operating margins remain deep in the red after recently falling to as low as -.95.

If run rates average 950 kbd vs the recent average of 1,050 kbd the market would lose nearly 10 million bu of corn demand.

FBN’s Take On What It Means:We believe the unprecedented decrease in gasoline consumption has led to a decrease in ethanol production, which in turn will weigh on corn markets until driving returns to normal.

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

—Kevin McNew