Afternoon Market Highlights


“if market volatility persists it may also impact July options expiration and futures delivery cycles… please be diligent in managing these risks over the next couple weeks.” 

Highlights

The grain markets were on the defensive on a bout of profit taking after recent rallies. President Trump spoke of a phone conversation with the Chinese president that could lead to the resumption of US/Chinese trade talks and a meeting at the G20-Summit later this month. The Federal Reserve meets today and tomorrow and is not expected to cut interest rates. 

  • Check your July open orders and cancel those that you don’t think you will need. July options expiration is this Friday, with First Notice Day Friday, June 28th. All longs will be reported after the close on the 27th.
  • Energy markets rebounded higher with crude oil trading over $2 bucks higher at $54/barrel. Support is near $50/barrel with some ideas that we break this mark toward $49/barrel.
  • The US$ up 64 at 97.62, gold up 7-8 bucks at $1,347/per ounce.
  • Wall Street is stronger on hopes of resuming trade talks with China. The DJIA is up 362 at 26475, S&P up 25 at 2917 and the NASDAQ up 112 at 7957.
  • 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.

Corn

Corn prices were lower on long liquidation as the corn planting comes to a close. The challenge for the corn market will be to establish total acres planted / harvested for this year. The growing season has just begun, and it is starting off on the cool and wet side, while corn would like to have some heat units. Brazil is harvesting their 2nd corn crop with prices more competitive than the US in the world market. 

  • Closes: July at $4.49 ¾, down 5 cents, September at $4.55 ½, down 6 cents and December at $4.63, down 5 ½ cents.
  • Chatter today was that some US ethanol makers may look to Brazil for their corn because of rising US prices and logistical pickles from this spring’s high water levels.
  • Spreads: N/U 5 ½ carry, U/Z 7 ¼ carry, Z/H 5 carry, N20/Z20 50 ¼ inverse. 

Oilseeds

The soybean market saw choppy trade from weakness in the corn market and US/Chinese trade talk hopes. The July contract closed mid-range of the day’s trading range. The last of the soybeans are getting planted this week as the farmer is bumping up against their respective prevent plant dates. There are concerns that the soybeans may not all get planted, because of wet weather conditions for this and next week, especially in the ECB. Illinois was at 70%, Indiana was at 64% and Ohio was only at 46% complete through Sunday. 

  • Closes: July at $9.13 ½, up ¾ cent, August at $9.20 ¼, up 1 cent, November at $9.40 ¼, up ¾ cent.
  • Ideas are that the farmer will not have a lot of time this week to get a significant number of soybean acres planted, with the current weather forecasts over the next few days.
  • Spreads: N/Q 6 ½ carry, Q/X 20 ¼ carry, X/F 12 carry, X9/N0 21 ¾ carry. 

Wheat

Wheat prices were on the defensive from profit taking and world competition for wheat. Egypt’s GASC tenders for optional origin wheat for LH July shipment. More rains are forecast for the Southern Plains area. There are some weather models suggesting rainfall in the Northern Plains later this week.  There are areas of dryness in MT, ND, that have missed out on the recent rain events. 

  • July closes: Mpls at $5.52 ¼, down 8 cents, KC at $$4.64 ¾, down 10 ¾ cents, Chicago at $5.31 ½, down 8 cents.
  • Hearing that French and Russian wheat might be making its way into Mexico at a $19-$24/tonne discount to US HRW.
  • Winter wheat crop conditions at 64% G/E provided additional pressure to the KC and Chicago markets as the trade shows little concern about possible damage to the crop from all the rain systems that have moved through the area. Last year’s ratings at this time were at 39% G/E.There are more concerns about damage to the SRW than the HRW crop at this point.
  • Spreads: Mpls N/U 6 ½ carry, U/Z 12 ¼ carry, Kansas City N/U 11 ¾ carry, U9/U0 67 ¼ carry.