Afternoon Market Highlights
5/29/2019 2:50:55 PM
Big day in the grain markets today with some pretty steep price swings. Poor weather conditions in the ECB and the Southern Plains continue this week with a chance for drier weather next week.
- CHS Hedging is offering Energy Hedging classes June 19, Grain Hedging classes June 25 and Technical Trading classes on June 26.Go to our website at www.chshedging.com for registration and class details.
- The energy markets are mostly weaker with crude oil dipping below $59/barrel.
- The US$ is stronger, pushing back over 98 points, the gold market is 2-3 bucks stronger at 1283 and the CD$ is slightly lower at 0.7402.
- DJIA is down 306 at 25041, S&P down 18 at 2787 and the NASDAQ is down 74 at 7533.
The corn market soared to higher levels after the USDA pegged corn plantings at only 58% complete. The WCB could see some planting progress being made this week but the ECB will still struggle to get something significant done. Planting progress for next Monday is estimated at 68% complete compared to 96% on average.
Closes: July at $4.18 ¾, down 1 ¾ cents, September at $4.28, down 1 ½ cents, December at $5.35 ¾, down 1 ¼ cents.
- Prices dipped on a bout of profit taking and increased hedge pressure.
- The July contract topped out at $4.38, with month end positioning expected over the next couple of days.
- Gulf premiums were 1 cent weaker for LH June.
- The next round of gains most likely shows up in the December contract as the weather and reductions in acres is a new crop thing.
- A lower new crop supply of corn could entice the basis to appreciate, and it could also encourage farmers to look at increasing their corn acreage for 2020/21.
- Spreads: N/U 9 ¼ cents, U/Z 7 ¾ cents, Z/H 8 ½ carry, Z/N 12 ½ carry.
The soybean market traded sharply higher at the open, on strength in corn rally and less than expected acres planted. Saturated fields along with forecasts for more rain will challenge farmers ability to get additional acres planted this week. Planting progress for next week is estimated at 40% complete compared to 77% on average.
- Closes: July at $8.72, up 16 cents, August at $8.78 ½, up 15 ¾ cents, November at $9.35 ½, up 7 ½ cents.
- The estimated short fund position this morning was at 133k contracts, which could be significant enough to encourage more short covering rallies in beans.
- Gulf premiums were 2 cents weaker for J/J and 1 cent weaker for August.
- Spreads: N/Q 6 ½ carry, Q/X 19 ¾ carry, X/F 11 ¼ carry, X/N 34 carry.
The wheat market opened higher on strength in the corn market and big rains in the Southern Plains this week. Prices dipped on profit taking and weakness in the corn market. Losses were limited in KC and Mpls from too much rain in the Southern Plains and too much dryness in parts of Montana and North Dakota and Western Canada.
- July closes: Mpls at $5.48 ¾, down 8 ¾ cents, KC at $4.50 ¼, down 10 ½ cents and Chicago at $4.90 ½, down 14 ¼ cents.
- VSR for KC and Chicago for 5.29.19: KC at 10 ¾, 77.4% of full carry & Chicago at 8 ½, 57% of full carry.
- Russia and Ukraine weather was wet last week but has turned dry over the weekend and this week. Russia’s wheat harvest begins in August.
- Winter wheat conditions declined because of being waterlogged.In most years harvest would have begun in early June. This year’s heavy rain events and cool temperatures have most likely delayed the start of winter wheat harvest.
- Spreads: Mpls N/U 8 ¼ carry, U/Z 12 ¼ carry, Kansas City N/U 10 ¾ carry, N/N 68 ¼ carry, Chicago N/U 8 ¼ carry, U/Z 13 carry. Mpls July is at a 97 cent premium over KC July.