Afternoon Market Highlights
6/4/2019 3:07:29 PM
The row crops traded higher, but well of their day’s highs. Pressure came from weakness in the wheat market and fears of a trade spat between the US and Mexico. President Trump is planning to go ahead with the 5% tariff on all Mexican goods beginning next week. Mexico is planning to enter into discussion on trade issues tomorrow regardless of the tariff implication.
- 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 next USDA S&D report is scheduled for June 11th at 11 AM Chicago Time. There are mixed thoughts about whether the USDA makes a reduction to yield in this report.
- Fertilizer contracts are expected to begin trading on the CME on Monday June 10th.
- Energy markets are mostly higher with crude oil back over $53/barrel.
- The US$ is weaker, the gold market is higher, and the equity market is higher. There was chatter today of a possible interest rate cut during 2019.
The corn market opened higher on delayed planting progress with only 67% of the crop in the ground by June 2nd. Prices were pressured lower after hearing that farmers will continue to plant corn into next week. They will go as long as the weather allows them to. Prices were pressured in sympathy with the wheat market and on talk of SA corn shipments heading to east coast US ports.
- Closes: July at $4.25 ¼, up 1 cent, September at $4.34 ¾, up 1 cent and December at $4.44, up 2 ¼ cents.
- Talk is that up to 1.0 mmt of South American corn is headed for US ports, because of wet weather in the ECB and Southern Plains.
- Spreads: N/U 9 ¼ carry, U/Z 9 ½ carry, Z/H 8 ¾ carry, N/Z 18 ¾ carry, N0/Z0 36 ½ carry, losing ground from last week’s high of 46 cents.
Soybean prices traded higher on slowed planting progress and talk about farmers looking to plant as many acres of corn as possible, leaving less of an acreage switch to soybeans. Prices retreated from their day’s highs on uncertainty about trade negotiations between the US and Mexico.
- Closes: July at $8.81 ¾, up 2 ¾ cents, August at $8.88 ¾, up 3 cents and November at $9.09 ¼, up 3 cents. The products finished slightly higher with meal up fifty cents and oil up 15 points.
- Beans are getting planted in Canada with rains expected to start tonight.
- Spreads: N/Q 6 ¾ carry, Q/X 20 ½ carry, X/F 12 ¼ carry, X/N 35 ¼ carry.
The wheat market took profits after the recent rally. Winter wheat conditions were said to have improved last week, and the newly planted spring wheat crop is starting off in great shape at 84% G/E. World supplies are expected to be abundant with the 2019/20 stocks estimated at 293.0 mmt. This compares to 275.0 mmt and 281.0 mmt the past two years.
- July closes: Mpls at $5.60 ½, down 3 cents, KC at $4.67 ¾, down 19 cents and Chicago at $5.07 ¼, down 12 cents.
- Paris mill wheat traded lower in sympathy with weaker US markets and increased hedge pressure.
- Japan tenders for 77k tonnes of optional origin wheat for August shipment (25k US spring, 13k US HRW, 21k US white and 19k Australian white).
- Current US stocks to use: HRW 67%, DNS 59%, SRW 59%, White 23% and HAD at 58%.
- Spreads: Mpls N/U 9 ½ carry, U/Z 13 ½ cents, Kansas City N/U 12 ¾ carry, U/Z 22 carry.