Afternoon Market Highlights
5/28/2019 2:43:33 PM
The Ag markets were stronger on more planting delays for corn, from weekend rain events and forecasts for additional rain events this week. Some of the delayed plantings have begun to spillover to the soybeans market. Ideas are that there could be as much as 10.0-12.0 million acres of prevent plant in the US this year.
- China is expected to struggle with trying to control the spread of the African Swine Fever that has been running rampant through much of main China and is expected to spread to other Asian countries.
- Weakness in Brazil’s currency partly stems from instability in their political arena.
- The energy markets are mostly higher with crude oil trading just shy of $59/barrel.
- The US$ is stronger, hanging around 98 points, the gold market is down 5-6 bucks at 1277 and the CD$ is slightly weaker.
- The DJIA is down 81 at 25503, S&P is down 16 at 2814 and the NASDAQ is down 5 at 7632.
The corn market moved higher on planting delays from adverse weather conditions. The July contract reached a high of $4.21, a level not seen since June 13, 2018. Chatter has begun about how many acres won’t get planted and how much yield loss we can expect from the late planted corn. Perhaps the 2.458 billion carryout for 2019/20 will end up somewhere between 1.0-1.5 billion carryout.
- Closes: July at $4.20 ¼, up 16 cents, September at $4.29 ½, up 17 cents and December at $4.37, up 17 ¾ cents.
- There are three unfilled gaps in the July 19 corn: $4.07 ½-$4.04 ¾ from May 28, $3.85 ¾-$3.84 ¾ from May 20 and $3.60 ¼-$3.57 ¼ from May 14.
- Weekly export inspections were 1.1 mmt, above trade estimates of 600 tmt to 1.0 mmt.
- Brazil farmers are said to be big sellers of corn with the current rally in the US corn market and weakness in the Brazilian currency.
- Planting progress is pegged at 63% complete compared to 49% last week and 90% on average.
- Hearing that Brazil corn is making its way into the US Wilmington port. There is chatter that as many as four cargoes of Brazil corn are heading our way.
- Spreads: N/U 9 carry, N/Z 16 ½ carry, U/Z 7 ½ carry, Z/N 15 carry.
July 2019 Corn
The soy complex traded sharply higher on rain delaying corn plantings and very possibly soybean plantings. This past weekend saw a lot of rain in a lot of places and the temperatures were not all that warm either. We could see some soybean acres go to another crop or prevent plant. Prices drew additional support from strength in the crude oil market. There are no signs yet of a trade deal between the US and China.
- Closes: July at $8.56, up 26 ¼ cents, August at $8.62 ¾, up 26 ¼ cents and November at $8.82 ½, up 26 ¼ cents. The products were up strong with meal up 12-13 bucks and oil up 28 points.
- Weekly export inspections were at 533 tmt, in line with trade estimates of 450-650 tmt.
- Planting progress is expected to be 31% complete compared to 19% last week and 66% on average.
- The canola market bounced higher in sympathy with the US soy complex. Canola planting is decent in Canada and there is no change in China’s ban on Canadian canola imports.
- US soymeal exports are said to have been expanding into the Asian market, which is typically dominated by Argentina. Last year’s drought like conditions in Argentina helped the US get their foot in the door.
- Spreads: N/Q 6 ½ carry, N/X 26 ¼ carry, Q/X 19 ½ carry, X/F 11 ¾ carry, X/N 38 ½ carry.
Wheat prices traded higher on spillover strength in the row crops and concerns of possibly too much rain in the plains. Additional strength in the winter wheat came from a bout of short covering. Paris milling wheat prices were stronger in sympathy with the US wheat market.
- July closes: Mpls at $5.57 ½, up 9 ½ cents, KC at $4.61 up 19 cents and Chicago at $5.04 ¾, up 15 ¼ cents.
- VSR rate data for May 28, 2019: Chicago N/U 49.6/5 of full carry and Kansas City N/U at 75.4% of full carry.
- Weekly export inspections came in at 494 tmt, near the low end of trade estimates between 400-700 tmt. This week is the last week in the current marketing year.
- Spring wheat planting progress is estimated at 83% complete compared to 70% last week and 91% on average.
- Winter wheat conditions are expected to decline 1% to 65% G/E.
- Spreads: Mpls N/U 7 ¼ carry, U/Z 10 carry, Kansas City N/U 10 ¾ carry, N/N 68 ½ carry. KC gained on Mpls and Chicago. The Mpls premium over KC is at 96 ¼ cents versus 1.06 last Friday.