19 MAY 2020 TUESDAY newsletter / commentary

Greetings: 19 MAY 2020 Tuesday

From the World Ag Supply Demand Estimates (WASDE report from USDA.):

With total U.S. corn supply rising more than use, 2020/21 U.S. ending stocks are up 1.2 billion
bushels from last year and if realized would be the highest since 1987/88. Stocks relative to use at
22.4 percent would be the highest since 1992/93. With larger stocks relative to use, the season average farm price is projected at $3.20 per bushel, down 40 cents from 2019/20 and the lowest
since 2006/07.

Numbers from the most recent May 12, 2020 WASDE are reflected in this KSU chart:

Here’s the updated: WASDE CornTable per report:

Corn production is up, stocks up by almost 1.3 Billion bushes (3318 vs 2098) and the allocation for ethanol production in this report is almost the same as last year even though ethanol producers in the USA have much lower margins this year and reduced demand at least in the short term.

You can download the latest 12 MAY 20 WASDE at this link: https://www.usda.gov/oce/commodity/wasde/wasde0520.pdf

Crude Oil: Even with the stock market up 900 points yesterday, Crude prices, basis AUG20 are down slightly today at $32.22 per barrel.  The latest EIA (Energy Information Agency) report indicates ethanol product very much down from last year and stocks are higher.  You may read the latest report here: http://ir.eia.gov/wpsr/overview.pdf

Recovery from the pandemic, as the media states it, will not be a “V” shape chart but much slower.  Of course, many things remain to be seen – and I really see the headlines continuing to drive the market much more than the facts.  Be careful out there and stay well.   Just in case you didn’t see a recent comment of mine; I believe that headlines drive these markets – and that fact will likely make ‘usual seasonal pattern’ much, much less an influence on price of almost everything the rest of this calendar year – and perhaps beyond.

There are no new trades this week.

Thank you. – Don Singletary

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