Afternoon Market Highlights
2/5/2019 4:10:10 PM
The ag markets were stable today ahead of a plethora of information that is scheduled to be released on the market Friday morning. Country movement was pretty slow with the winter storm moving across the Upper Midwest.
- The energy markets continue to show weakness with crude oil dipping below $54/barrel.
- The US$ was stronger, poking above 96 points. Equity markets were stronger this afternoon. The gold market was off a freckle.
- Correction to the CONAB production estimates:should be released early next week and not this Thursday as I stated yesterday.
- USDA data dump to be released Friday at 11 AM CST.
- Weekly ethanol production figures to be released tomorrow around 10 AM CST.
The corn market saw choppy trade on position squaring ahead of Friday’s USDA data dump. Because China has purchased US soybeans as a gesture of good will there are ideas circulating in the marketplace that they will also come to the US to buy corn.
- Closes: March at $3.80 ¾, up 1 ½ cents, July at $3.96 ½, up 1 ¼ cents, December at $4.03 ½, up 1 cent.
- The average trade estimate for the final corn production number is at 14.532 bb (14.343-14.760). The average yield estimate is at 177.9 bpa (176.7-179.9).
- The average trade estimate for ending stocks is at 1.708 bb (1.621-1.787). This compares to December at 1.781 and the average trade estimate for the Jan report at 1.694 bb.
- Spreads: H/K 8 ¼ carry, K/N 7 ¾ carry, N/U 3 carry, U/Z 4 ¼ carry, Z/H 8 ¾ carry and Z/N at 19 ¼ carry.
The soybean market traded mixed after recent strength from another 5.0 mmt of Chinese soybean purchases. Prices were pressured as funds were thought to be taking a bit of money off the table. Friday’s USDA data will be the focus over the next couple of days.
- Closes: March at $9.20 ¼, up 1 ¾ cents, July at $9.7 ½, up 2 ½ cents, November at $9.60 ½, up 2 ½ cents. The products were mixed with meal down just over a buck and oil up 25 points.
- The average trade estimate for the final US soybean production number is at 4.569 bb (4.490-4.620). The average yield is estimated at 51.8 bps (51.0-52.4).
- The average trade estimate for ending stocks is at 0.926 mb (0.800 mb-1.015 bb). This compares to 0.955 mb in December and the average trade estimate for the Jan report at 0.904 mb.
- The USDA announced the sale of 274k tonnes of US soybeans to an unknown destination for 2018-19.
- The USDA announced another sale of 2.6 mmt of US soybeans to China for 2018-19.
- The canola market traded lower on record stocks as reported by StatsCan this morning. The 2018 canola stocks as of December 31st were reported at 14.553 mmt versus 13.869 mmt last year and 13.383 mmt in 2016.
- Spreads: H/K 14 carry (hearing some folks got some done at 14 cents today), K/N 12 ½ carry, N/X 13 carry,
The wheat market was mixed on position squaring ahead of Friday’s USDA data dump at 11 AM CST. Country movement has slowed from two weeks of cold and snow moving across the Upper Midwest. StatsCan pegged the Canadian spring wheat stocks at 17.905 mmt versus 18.549 mmt last year and 17.954 mmt in 2016. Their durum stocks were estimated at 5.328 mmt versus 4.734 mmt last year and 6.140 mmt in 2016.
- March closes: Mpls March at $5.74 ¾, up ¼ cent, KC at $5.11 ½, up 1 cent and Chicago at $5.27 ¼, up 1 ½ cents.
- Japan is in for their routine food tender this week (131,165 tonnes). The breakdown is as follows: US 8k white, 27k HRW, 24k spring, Canada 37k spring and 35k Australian white wheat. The shipment period is for LH Mar through April.
- Duluth stocks were up 100k bushels or so. The Mpls spot floor bids are mostly unchanged, as there were zero car receipts today. Open interest in the March Mpls sits at 25k contracts and the H/K spread is at 3 ½ cents.
- Spreads: KC H/K 5 ¾, narrowed in 2 cents, Chicago H/K 1 ¾ carry, narrowed in 2 ¼ cents.The VSR in Chicago looks to be pushing for a reduced storage rate.
The cattle market was mixed with live cattle supported from strong products and packer margins. The feeder cattle market was lower on lack of cash trade. Last week cash traded at $124 with most operators looking for higher prices from the packers.
- Closes: March feeders at $144.15, down 7 cents, April at $145.50, down 32 cents and August at $150.27, down 2 cents.
- Closes: Feb lives at $126.70, up 1.07, April at $127.65, up 7 5 cents, June at $117.40, up 47 cents.$118 in the June is seen as resistance.
- AM Boxed Beef values were mixed on 66 loads: Choice at $217.39, down 26 cents and Selects at $213.69, up 28 cents.
- Packer margins jumped 22.30 to $78.45 this morning.
- Today’s slaughter is estimated at 118k head.
The hog market set back today on a bout profit taking after the recent run up. Cash markets were a bit stronger but are still at weak values. Products were weaker today with Carcass cutout values hanging below $70.
- Closes: Feb a t $56.42, down 87 cents, April at $61.60 down 1.45, June at $76.47, down 1.15.
- Pork product values on 201 loads were weaker this morning. Hams and bellies were down 2-4 bucks while loins and carcass cutout values were over a buck lower.
- The WCB cash hog report showed values at a weighted average of $50.13, up 37 cents. IA/MN cash hog prices bounced slightly higher at $50.05, up 35 cents.
- Packer margins were higher at $27.25.
- Today’s slaughter is estimated at 478k head.