Afternoon Market Highlights


Highlights

The Ag markets got thumped today on continued fund selling and forecasts for favorable weather conditions across much of the Upper Midwest.  The Federal Reserve lowered interest rates ans was said to be the first time since 2008.  The US$ traded higher and the gold market traded lower after the Fed announcement.    

  • The Federal Reserve reportedly cut interest rates by 25 basis points.
  • Farmfest begins next week (Aug 6-8) in Redwood Falls MN. CHS Hedging will host a booth at the event. CHS Hedging booth is #316.
  • The next updated crop production report and updated world/US balance sheets is scheduled for August 12th at 11 AM CDT.
  • Energy markets are mostly higher with crude oil up a freckle at $58/barrel.
  • US$ up 543 at 98.58 points, the gold market is up 11-12 bucks at $1,421/ounce and the CD$ is a freckle weaker at 0.7585.
  • DJIA down 337 at 26860, S&P down 23 at 2989, and the NASDAQ down 75 at 8198. 

Corn

Corn prices traded lower on lack of fresh supportive news, favorable weather conditions, and fund selling.  The September contract hit $4 (its 200-Day MA) but failed to trade below that level. The corn crop is sad to be growing fast in many areas, although there is a real concern about quality, yield and worries about the possibility of a September freeze, which could delay or halt maturity of the crop. 

  • Closes: September at $4.00 ¼ cent, down 11 cents, December at $4.10, down 11 cents and July at $4.30 ¼, down 9 cents.
  • Average trade estimate for weekly export sales: 300-850 tmt.
  • Weekly ethanol production was reported at 1,031,000 barrels per day, down 8k barrels per day.Stocks on the other hand have been building over the past 5-6 weeks. The pushes in the market (for corn to the ethanol plants) seem to have subsided. Margins are in the red but hearing that they have been improving slightly.
  • Spreads: U/Z 9 ¾ carry, Z/H 10 ½ carry, Z/N 20 ¼ carry, N0/Z0 19 inverse. Consider rolling short September hedges to the December at current levels out to 10 cents as farmers are not big sellers of corn yet.

 

Oilseeds

Soybean prices traded lower on more favorable weather and glim outlook for trade resolution with China.  This week’s meeting was said to be viewed as constructive.  Discussions evolved around increased US good to be purchased by China along with an agreement to meet again sometime in September. The red November closed just shy of its 40-Day MA of $9.40 ¾. 

  • Closes: November at $8.81 ½, down 15 ¼ cents, July at $9.31 ¾, down 12 ¼ cents and red November at $9.40 ¼, down 9 cents. The products were lower with meal down $2 and oil down 56 points.
  • Average trade estimate for weekly export sales: 100-700 tmt for beans, 150-450 tmt for meal and 5-35 tmt for soyoil.
  • The canola market traded lower in sympathy with the US soy complex. Expectations for a big Canadian canola crop lurks over the market.Support stems from lack of farmer selling.
  • Spreads: X/F 13 ½ carry, F/K 25 ¼ carry, X/N 50 carry. 

Wheat

Wheat prices were lower on row crop weakness, harvest pressure and lack of decent demand. There seems to be a bit of business around, but the US does not look to be in the mix to get the business.  Lots of grain moving from the bins to the elevators to make room for the new crop or to pay recent bills.  There was a fair amount of free DP grain that needed to get priced or put on a storage contract by the end of day today.  

  • September closes: Mpls at $5.19 ½, down 9 ¼ cents, KC at $4.22 ¼, down 11 ¼ cents and Chicago at $4.87 ¼, down 10 cents.
  • Average trade estimate for weekly export sales: 300-600 tmt.
  • Jordan, Algeria, Bangladesh and the Philippines are all in the market for wheat this week. Bangladesh bought Russian, Algeria is thought to be French and Romanian and Jordan is optional origin.
  • Germany’s wheat harvest is near 70% complete with the last 30% in their prime production area and harvest has been delayed this week because of rain events.
  • Spreads: Mpls U/Z 13 ½ carry (widest so far has been 16 ½ cents), Z/H 14 ½ carry, Kansas City U/Z 17 ¼ carry, U/U 63 carry (5 ¼ cents a month). Consider rolling Mpls U hedges to the Dec at 15 cents carry.