Miller Magazine Issue: 123 March 2020

92 MARKET ANALYSIS MILLER / MARCH 2020 Argentinean attache of USDA adjusted the forecast for soy- bean production in 19/20 from 53MMT to 54.1MMT, while some of the crops suffer from excess moisture, and in some regions, there is drought, so that the crop may ultimately be at the forecast level. The Argentine Ministry of Agriculture has confirmed that it intends to increase export duties on soybeans and processed products up to 33%, but only for farmers selling more than 1,000 tons of soybeans. Recall that at the end of last week, export licenses were suspended, which gave support to the market. Farmers can reduce crops by 5%, some regions suffer from drought. Soybean exports from Brazil in February amounted to 5.12 MMT, which is 3% lower than February 2019. 72% was sent to China. At the same time, soybean harvest is behind the pace of last year and today makes up 40% of the area. Results of the Egyptian tender on SBO: LDC 40kMT at $ 720.00 Hakan 30kMT at $ 720.00. SFO latest Egyptian pur- chase results: Aston 16kMT $ 734.00. Nowadays after price reduction, demand increases so with oil expectation and palm oil support prices get more on sellers site Another statement about the invention of a vaccine for ASF caused a sharp increase in quotes for soybean meal, but since this is not the first such statement, and outbreaks are recorded further, the market calmed down. According to the forecast of the USDA Secretary of State, China will begin purchasing American soybe- ans in late spring and early summer, which is traditio- nal. C a n a d a ' s exports to Chi- na could spur a major domestic catastrophe in 2019/20, and stocks should also increase at the end of the season. Ca- nada is trying to find new markets, for example - India. Consulting company Strategie Grains lowered its forecast for rapeseed in the EU this year to 17.85 MMT from 18.05 MMT earlier, the monthly report said; the revised forecast was 5.7% higher than last year's crop of 16.89 MMT, which became a 13-year low MACRO The US market beat off the fall of on 3rd March. The mo- vement in plus/minus 4% for two days continues to keep volatility at a high level. Investors hope for coordinated eco- nomic support by G7 central banks. The Bank of Canada on 2nd March lowered its discount rate by 0.5%. The US announced financial support to the health sector for $ 8.3 billion. The IMF will also provide $ 50 billion to the countries most affected by coronavirus ($ 10 billion to poor countries under the quick financing program and $ 40 billion to ever- yone else as part of another quick fundraising tool) In the US, Democratic presidential candidate former Vice President Joe Biden strengthened his leadership - now book- makers give him 84% probability, and for Sanders only 18%. The top of the Democratic Party for Biden (and brightly against Sanders). Trump will suit either of these two candidates (Gi- uliani made a film about corruption in the Biden family and throw him at the finish of the presidential race if Biden is his opponent in the finals). What is still important to understand is the US elite versus Sanders. And his descent from the race will weaken their resistance to the crisis. That is, tactically, Biden's nomination is good for the market, but in the medium term, it threatens to deepen the correction. However, strategically this is also good for the markets. It is expected that the Chinese will massively begin to go to work on March 10. Accordingly, Chinese products will begin to return to shelves by the end of March. Therefore, expectations for the second quarter are much more positive than for the first quarter WHO compared mortality rates from conventional influenza and from COVID-19 to 1% and 3.4%, respectively. That is, the current coronavirus is 3.4 times more dangerous. This iso- lates the coronavirus from normal flu. But in general, the panic over the coronavirus is now coming to naught. People and investors are used to. The Brazilian currency is one of the most undervalued cur- rencies in emerging markets, making its products the most att- ractive in foreign markets. A weak euro also supports European grain. So spring is co- ming – will it be 'green' on screen? Will bears wake up or bulls fed?