Afternoon Market Highlights


Highlights

Grain markets were on the defensive after the release of the USDA report at 11 CDT. Weather conditions remain an issue for this year production as there is a whole variety of crop still in the fields. The Dakotas and MN are in the middle of a winter storm for the balance of the week and this weekend. US/Chinese face to face trade talks have resumed this week.     

  • CHS Hedging is offering Energy Hedging classes on January 23rd at the Inver Grove Heights office. Check the website for registration and agenda at www.chshedging.com.
  • The energy markets saw a nice bounce with crude oil trading over a buck higher at $53.67/barrel.
  • The US$ tipped over, trading down 414 ticks at 98.70, the gold market is in the defensive, down 14 bucks at 1494/ounce and the CD$ saw a slight recovery, up 0.00215 at 07530.
  • DJIA was last up 150 at 26496, S&P up 23 at 2941 and the NASDAQ up 47 at 7950. 

Corn

The corn market got thumped after the release of the USDA data.  The market was looking for a sizable decrease in the corn yield and it was actually raised a slight amount. December dipped down to a low of $$3.78 ½, ½-cent below its 50-Day MA. The corn crop is expected to remain in the fields over the next few months, unless the weather improves enough that the farmer is encourage to harvest it.  

  • Closes: December at $3.80 ¼, down 14 cents, July at $4.02 ¼, down 12 ¼ cents, September at $4.00 ½, down 4 ¾ cents, red Dec at $4.05, down 3 ¾ cents.
  • Weekly export sales were reported at 285k tonnes.Hearing the US is not competitive on corn for quite a while.
  • The lower 2018/19 Sep 1 grain stocks was supported from a 343 million bushel increase to the 2018/19 feed and residual category.
  • Minor changes were noted to the 2019/20 acreage and yield.Feed and residual was raised 125 million bushels, ethanol was lowered 50 million bushels and exports were lowered 150 million bushels, reducing the 2019/20 ending stocks from 2.190 billion bushels to 1.929 billion bushels (13.8% stocks to use).
  • Spreads: Z/H 11 ½ carry, H/K 6 carry, Z/N 22 ¼ carry, Z/Z 25 carry. 

Oilseeds

The soybean market lost ground on weakness in the corn and wheat market after the release of today’s USDA report. Most months closed the session ¼-1/2-cent lower.  Support stems from the increased Chinese soybean purchases the past couple of weeks. 

  • Closes: November at $9.23 ½, down ¼ cent, January at $9.37 ½, down ½ cent, July at $9.68 ½, down ¼ cent, red November at $9.45 ½, down 4 ¾ cents. The products were mixed with meal down 1-2 bucks and oil up 7 points.
  • Weekly export sales were decent again this week at 2.1 mmt (1.0 mmt of that being slated for China).
  • The USDA announced the sale of 398k tonnes of beans to China for the current marketing year.
  • The 2019/20 balance sheet showed a slight reduction in planted/harvested acres and a 1.0 bushel drop in yield. Crush was raised 5.0 mb and exports were left unchanged. The carryout was reduced to 460 million bushels.
  • Soyoil carryout or 2019/20 was raised 40 million pounds and meal carryout for 2019/20 was left unchanged.
  • The winter storm has begun moving across the Dakotas and MN, hampering any harvest activity until at least next week (depending on conditions once the storm has past).
  • The canola market traded lower on increased selling and commercial hedge pressure. The canola harvest was last reported at 40% complete with reports of 38 bushels per acre on average.
  • Spreads: X/F 14 carry, F/H 11 ¾ carry, F/K 21 carry, X/N 44 ½ carry.  

Wheat

The wheat market traded lower on spillover weakness in the corn market and bigger than expected US and world wheat ending stocks for 2018/19 and 2019/20. Spring wheat stocks saw a 9 million bushel reduction in ending stocks, on a lower overall production number, not overwhelming and bigger than last year. The 2019/20 stocks to use ratio sits at 54% compared to 2018/19 at 45-50%). 

  • December closes: Mpls at $5.35 ¼, down 6 ½ cents, KC at $4.01 ¾, down 11 ½ cents and Chicago at $4.93, down 7 ¼ cents.
  • December Mpls sits at its 38% retracement from the September $5.59 high to the September low of $5.21.
  • Weekly export sales were decent at 522 tmt.
  • Japan bought 114k tonnes of US and Canadian wheat (25k US spring and 60k Canadian spring).
  • The BA Grain Exchange pegs the Argentine wheat crop at 19.8 mmt from adverse weather conditions.Today’s USDA report suggested the crop production at 20.5 mmt.
  • The USDA pegged the Australian wheat crop at 18.0 mmt versus other estimates closer to 16.0 mmt.Australia is expected to see warm/dry conditions for a few more weeks yet.
  • Spreads: Mpls Z/H 14 carry, Z/Z 50 carry (we could see the Z/H widen out on bigger stocks and less than impressive export demand) ......Kansas City Z/H 13 ½ carry, Z/Z 59 ¾ carry.