Afternoon Market Highlights
10/16/2019 3:42:33 PM
The grain markets appear a bit rangebound on lack of fresh supportive news ahead of the next USD AS&D report, which is three weeks out yet. Harvest progress is picking up around the US Midwest as weather conditions permit. Producers are unwilling sellers at current price levels as their focus is on the harvesting of their crops. Prices took a hit on uncertainty about the progress of “Phase I” trade war agreement and when and if there will actually be a contract drawn up and signed.
- CHS Hedging is offering an “Introduction to Technical Trading” class on January 10th and “Energy Hedging I & II” classes on January 23rd at the Inver Grove Heights office.Check the website for registration and agenda at www.chshedging.com.
- The energy markets are mostly higher with crude oil up 50 cents at $53.31/barrel.
- The US$ is off 275 at 98.01, the gold market is up 9-10 bucks at $1,489/ounce.
- DJIA down 14 at 27010, S&P down 6 at 2991 and NASDAQ down 25 at 8123.
The corn market traded lower on improving weather and a pickup in harvest activity. Losses were limited from delays in the corn harvest and slow maturing corn. Harvest progress at 22% complete is well behind the average. IEG Vantage pegs the 2020 US corn acreage at 95.270 million acres (big number!).
- Closes: December at $3.91 ¾, down 1 ½ cents, July at $4.14 ¾, down ½ cent, September at $4.05 ¼, down 1 cent and red Dec at $4.08 ½, down ¼ cent.
- Gulf premiums were mostly unchanged.
- We sold 229k tonnes of corn to Mexico (137k for this year and 91k for next year).
- Russia looks to harvest a near record corn crop.
- South Africa’s corn crop suffers from ongoing dryness, with expectations for crop losses.
- Spreads: Z/H 11 ½ carry, Z/N 22 ½ carry, Z/Z 16 ½ carry, N0/Z0 6 inverse.
Soybean prices were lower on increased harvest activity and concerns that China may be waffling on their Phase I Trade war agreement to the point of not looking to sign the agreement. Harvest progress is said to be picking up around the US Midwest, with reports of good yields.
- Closes: November at $9.28, down 6 cents, January at $9.42 ½, down 6 ¼ cents, July at $9.72 ¼, down 4 cents and red November at $9.70, down 2 ½ cents.
- Brazil is expected to see good rains next week in and around the Mato Grosso area. They have been pretty dry as the producers there try to get their new crop beans planted.
- IEG Vantage pegs the 2020 US soybean acreage at 85.345 million acres and 2.029 million acres of canola.
- Spreads: X/F 14 ¼ carry (good place to get short Nov hedges moved out), F/K 20 ½ carry, X/N 44 carry.
The wheat market traded higher on improving demand for wheat. Funds are said to hold a short position in Chicago, which leaves the market vulnerable for bouts of short covering. IEG Vantage sees 44.759 million acres of wheat planted in 2020 (30.269 million winter wheat, 13.150 million other spring wheat and 1.340 million durum acres).
- December closes: Mpls at $5.50 ½, up 5 cents, KC at $4.25 ½, up 4 ¼ cents, Chicago at $5.13 ¼, up 6 ¼ cents. The 200-Day MA in Mpls Dec is at $5.57.
- Egypt’s GASC bought 405k tonnes of wheat (285k Russian, 60K French and 60k Ukraine) for LH Nov/Dec shipment. Purchase price ranges from $229.42/tonne to $231.24/tonne.
- Paris milling wheat prices traded higher on improving demand prospects after the Egyptian purchase.
- Australia’s wheat production is estimated at 17.5 (15.2-19.7) on extended dryness throughout the growing season.
- Japan snubbed the US in their weekly food tender for this week.There was no spring wheat on their shopping list while Canadian spring wheat was on the list for 60k tonnes.
- Spreads: Mpls Z/H 13 ½ carry, Z/Z 49 ¾ carry, Kansas City Z/H 12 ¾ carry, Z/Z 54 carry.