Afternoon Market Highlights
10/10/2019 3:24:09 PM
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.
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.
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.
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.