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.
May soybeans extended their rally yesterday on the back of hopes for better demand and potential port disruptions in South America. The market is giving back some of those gains in the early morning trade.
U.S benchmarks finished Friday on a very ugly note, settling below the December 2018 low, and kicked off this week by gapping lower. The S&P traded to the lowest level since the week after President Trump’s 2016 election. Hopes of massive fiscal stimulus are stalling in the Senate.
S&P responded to the first test of the December 2018 low by gaining as much as 13%. Yesterday, the S&P took out that low, but did not close below it. It has become evident since Monday that the panic is still playing out and we voiced here yesterday that we expected the market to break below 2300.
Outside markets will continue to have a bearing on the grain sector, if we can avoid the limit down days and peak panic environment like we saw yesterday, we think the market can focus back on its own fundamentals.
Expect the volatility in the outside markets to continue to be the leader for cattle. Overtime, volatility will come back out and things will stabilize. When that happens, we think some of the best opportunities will be in cattle futures.