Afternoon Market Highlights
9/30/2019 3:06:30 PM
The grain markets were stronger on crop concerns from adverse weather conditions around the globe. This morning’s USDA data was surprising friendly for the row crops and somewhat mixed for the wheat. China continues to buy US soybeans this week with an allotment said to be around 2.0 mmt.
- The next USDA monthly S&D report is scheduled for October 10 at 11 AM CDT.
- The US$ is up 294 at 99.40, the gold market is down 26-27 bucks at $1,476/ounce and the CD$ is slightly higher at 0.75685.
- DJIA up 133 at 26953, S&P up 17 at 2980, NASDAQ up 56 at 7995.
- The energy markets are mostly lower with the crude oil down 1.59 at $54.32/barrel.
The corn market traded higher on weather conditions and borrowed strength in the wheat market. Prices drew additional strength from a surprisingly friendly corn stocks number as of September 1. Corn prices could be vulnerable to fund short covering as they currently hold a pretty decent short position in the corn market.
- Closes: December at $3.88, up a whopping 16 ½ cents, July at $4.08 ½, up 12 cents, September at $4.04 ½, up 6 ¼ cents and red Dec at $4.08 ½, up 5 ¼ cents.
- The wheels were turning soon after the release of today’s USDA stocks report, with ideas that we could see another reduction in the overall corn yield in October, along with the drop in September 1 stocks, resulting in a significantly lower carryout for 2020.
- Weekly export inspections were reported at 400k tmt. The USDA did announce the sale of 120k tonnes of corn to Mexico for the 2019/20 marketing year.
- September 1 Grain Stocks came in at 2.114 billion bushels, well below the average trade estimate of 2.428 bb and the June 1 stocks estimate of 5.202 billion bushels.
- Harvest progress is expected to be around 14% complete with the overall condition of the crop remaining unchanged at 57% G/E for the third week in a row.
- Spreads: Z/H 11 ½ carry, Z/N 20 ¼ carry, Z/Z 20 ¾ carry and N0/Z0 ½ carry (we could begin to worry about having enough inventory available next year).
The soybean market opened higher on poor weather conditions for much of the US Midwest and more Chinese soybean purchases. Prices drew additional support from this morning’s USDA data release. The bean harvest has been halted in many areas from this weekend’s rain events.
- Closes: November at $9.06, a ginormous 23-cent jump higher, January at $9.19 ½, up 22 cents, July at $9.47, up 17 ½ cents and red Nov at $9.54 ½, up 13 ¾ carry. the products were up nicely with meal up 6 bucks and oil up 37 points.
- Weekly export inspections were decent at 982 tmt. A good chunk was attributed to China’s purchases last week.
- Chinese buyers are back in the saddle this week with the purchase of 600k tonnes of tariff-free US beans for Nov-Jan shipment. Ideas are that they could be in the market for up to 2.0 mmt this week.
- September 1 Grain Stocks were supportive to prices, coming in at 913 mb, well below the average trade estimate of 982 mb and the June 1 stocks estimate of 1.790 billion bushels.
- The USDA revised the 2018 soybean crop to 4.428bb, by reducing the yield 1.3 bpa to 50.3 bpa and lowering residual use 24 million bushels.
- Harvest progress is estimated at 6% complete and overall conditions were left unchanged at 54% G/E for a second week in a row.
- Spreads: X/F 13 ½ carry, X/H 24 carry, X/N 41 ¼ carry, F/K 19 ¼ carry.
The wheat market opened higher on poor weather conditions across much of the Northern Plains and Canadian Prairies. Snow fell across Montana and rain fell across North Dakota, the two states that had a fair piece of their wheat left to harvest. Mpls retreated somewhat after the release of the USDA stocks and production report, despite the rally in corn and beans. The USDA said, shortly after the release of this morning’s data release, that they will make plans to re-assess the spring wheat and durum acres, with updated estimates to be revealed in their November monthly S&D report.
- December closes: Mpls at $5.43, down 2 ½ cents, KC at $4.15 ¼, up 7 ¾ cents and Chicago at $4.95 ¾, up 8 ½ cents.
- Sep 1 grains stocks came in above the average trade estimate, and just a freckle shy of what was on hand a year ago.
- Weekly export inspections were good at 467 tmt.
- Spring wheat harvest is estimated at 92% complete versus 87% last week.Winter wheat plantings are estimated at 36% planted versus 22% planted last week.
- Wheat production estimates were 1.962 bb for all wheat and 1.304 bb for all winter wheat. By class estimates were: 833 mb for HRW, 239 mb for SRW, 232 mb for white winter, 600 mb for other spring and 58 mb for HAD.
- Argentina and Australia suffer form too much dry weather, while the Canadian Prairies got blasted with the first of the 2019/20 winter blast of snow and/or rain.There is a bit of grain left to harvest way up there in the north with the fall and winter months upon us.
- Spreads: Mpls Z/H 13 ½ carry, Z/Z 45 ¼ carry, Kansa City Z/H 12 ¾ carry, Z/Z 59 ¼ carry, and Chicago Z/H 6 ¾ carry, Z/Z 33 ¾ carry. Kansas City gained on Mpls with the MWZ at a $1.29 premium to KWZ.