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

More rain in the forecast over the next several days encouraged fund buying. Outside influences provided additional support to the grain markets. The energy markets were stronger with crude oil over $3 bucks higher at $56.65/barrel.  Wall Street traded stronger on ideas that the Federal Reserve would cut interest rates sometime in July.  

  • The DJIA is up 282 at 26786, the S&P is up 25 at 2945 and the NASDAQ is up 69 at 8056.
  • Average trade estimates for the May Cattle on Feed report out tomorrow afternoon: On feed June 1 at 101.4% (101-102), May placements at 95.8% (93.2-98.9) and May marketings at 100.8% (99.8-101.5).
  • The gold market soared higher on thoughts of an interest rate cut as early as next month, in hopes of boosting growth. The gold market is up 44 bucks at 1390.
  • StatsCan is expected to release their monthly crop production report next Wednesday.

Corn

The corn market got legs after the morning break, on weather models suggesting a wetter pattern for much of the US Midwest for the balance of the week and into early next week. 

  • Closes: July at $4.50, up 9 cents, September at $4.54 ¾, up 8 ½ cents, December at $4.61, up 7 ¾ cents.
  • Weekly export sales were disappointing, resulting in ideas that we could see another reduction to exports. We are seeing stiff competition from SA in the world market.
  • The USDA announced the sale of 122k tonnes of corn to Mexico (52 for the current marketing year and 70 for next year).
  • Spreads: N/U narrowed into a 4 ½ cent carry, U/Z 6 ½ carry, Z/H 5 ½ carry. The N0/Z0 moved 9 cents to a 54 ¼ cent inverse. 

Oilseeds

Soybeans turned higher early today on threatening weather and crop worries.  More rain this and next week, raises concerns about planting delays and potential yield loss in the soybean crop as well as this year’s corn crop. 

  • Closes: July at $9.15 ½, up 12 ¼ cents, August at $9.21 ¾, up 12 ¼ cents an November at $9.41, up 12 ¼ cents. The products were stronger with meal up over $6 bucks and oil up 22 points.
  • The USDA announced the sale of 189k tonnes of beans to an unknown destination (126 for this year and 63 for next year).
  • Weekly export sales were decent and near the top end of the trade estimates.
  • Crop condition ratings are expected to come in around 60% G/E.the lowest ratings were at 55% G/E back in 1993. The first report last year pegged conditions at 75% G/E.
  • StatsCan report next Wednesday is expected to show their canola production at 20.7 mmt. This would be down 1.0 mmt from their April estimate and nearly 2.0 mmt lower than last year’s production.
  • Spreads: N/Q 6 carry, Q/X 19 carry, X/F 12 ½ carry, X/N 29 ¼ carry. 

Wheat

The wheat market drew strength from the row crops and outside influences. Additional rain in the Southern Plains this week provided additional support to KC and Chicago while Mpls turned lower on forecasts for beneficial rains in the Northern Plains and Canada this week. Winter wheat harvest around Garden City Kansas is thought to be 1-2 weeks late this year.  

  • July closes: Mpls at $5.38 ½, down 3 ¼ cents, KC at $4.60 ¾, up 3 ¼ cents and Chicago at $5.26 ½, up 4 ¼ cents.
  • Weekly export sales were disappointing at 188 tmt, although we did just start a new marketing year June 1.
  • StatsCan is expected to show their all wheat production at 25.7 mmt, on par with their April forecast but well below the June USDA forecast of 34.5 mmt.
  • Spreads: Mpls N/U 7 carry, U/Z 11 ¾ carry, Kansas City N/U 10 ¼ carry with 1 day left in the VSR calculation period.