Afternoon Market Highlights


Highlights

The current version of the newly revamped NAFTA (USMCA) may not receive approval by the Democratic party as it stands.  It sounds like there are unanswered questions on a few items. President Trump has ordered all Boeing 737 Max 8 aircraft to be grounded, after recent crashes that have killed a significant amount of people.  

  • March grain contract expire at noon tomorrow.
  • Trade estimates for the February NOPA crush report on Friday: 158.73 million bushels of soybeans (154.70-164.27) and 1.612 billion pounds for soyoil (1.499-1.680).
  • Weekly export sales estimates: 450-750 tmt for wheat, 800 tmt-1.5 mmt for corn. 1.2-2.1 mmt for soybeans, 500-300 tmt for meal and 5-20 tmt for soyoil.
  • Energy markets are moving higher this afternoon with crude oil trading over a buck higher at $58 plus/barrel.
  • The US$ is down 422 at 96.51, gold is up over 13 bucks at $1,311/ounce and the CD$ is stronger at 0.7522.
  • Wall Street is showing strength this afternoon with the DJIA up 154 at 25707, S&P up 22 at 2819 and the NASDAQ up 59 at 76.50. 

Corn

The corn market closed slightly higher in modest volume. Most months had a 5-7 cent trading range. There were rumors that China was in the market for US corn although basis and freight values did not support that and there has been no confirmation of that. 

  • Closes: May at $3.66 ½, up ¾ cent, July at $3.76 ¼, up ¾ cent and December at $3.92 ¼, up ¾ cent.
  • The May contract traded above its 10-Day MA of $3.69 but failed to hold at or above that level.
  • Dec 19 tickled its 20-Day MA of $3.95 ½ but settled just above its 10-Day MA of $3.92.
  • Spreads: K/N 9 ¾ carry (76% of full carry at 13 cents), with the big fund short in the corn market, the market is vulnerable to short covering rallies (which could also narrow up this spread).
  • Weekly ethanol production was down 19k barrels per day at 1.005 million barrels per day. The stocks were down 531k barrels to 23.7 million barrels. 

Oilseeds

Soybean prices were higher most of the day on a bout of short covering.  The May failed to trade above its 10-Day MA of $9.04.  Uncertainty about the US/ Chinese trade deal seems to have kept the market trading in small ranges.  

  • Closes: May at $9.01, up 4 cents, July at $9.14 ¾, up 3 ¾ cents, November at $9.35 ¾, up 3 ½ cents.
  • More snow and rain expected to begin across much of the US Midwest over the balance of the week, which could lead to more soybean and canola acres should the spring planting season turn into a late one for corn and spring wheat planting.
  • Spreads: K/N 14 carry (82% of full carry at 17 cents). Might not be a bad ideas to look at rolling short to the May given a large net fund short position.
  • May options expire at the close of April 26th, the Good Friday Holiday is April 19th. 

Wheat

The wheat market gave back some of yesterday’s rally today. Prices were pressured from a bout of profit taking, while losses were limited from the funds holding an estimated large net short position in wheat, which makes the wheat market vulnerable to short covering rallies. 

  • May closes: Mpls at $5.50 ½, down 10 ¼ cents, KC at $4.36 ¾, down 6 ¾ cents and Chicago at $4.47 ¼, down 5 ¾ cents.
  • South Korea is in the market for 50k tonnes of US milling wheat and 31k tonnes of Australian wheat for July/Aug shipment.
  • Algeria bought 450k tonnes of optional origin wheat at $231.50-$234/ tonne C&F. No other details were given.
  • EU wheat prices rose on ideas renewed demand, despite weakness in the US wheat market and a stronger Euro.
  • Spreads: Mpls K/N 2 ¾ carry, Kansas City K/N 8 ½ carry, Chicago K/N at 8 carry. Bids could roll to the May sooner than later with the Mpls K/N as narrow as it is.