Afternoon Market Highlights
11/6/2019 3:01:44 PM
Quiet day in the grain markets as the trade marks time ahead of Friday’s USDA report. Producers are not willing sellers at current price levels as the focus is on getting the crop harvested rather than getting the crop marketed. Phase I trade talks may have stalled out with hints that any signing of the agreement could see a setback to December.
- Weekly export sales estimates out tomorrow morning.
- USDA crop production and S/D report out on Friday.
- Next week’s weather forecasts suggest super cold and super dry across the US Midwest.
- Energy markets are weaker with crude oil down 68 cents at $56.55/barrel.
- The US $ turned lower, down 41 t 97.94, the gold market bounced off yesterday’s big losses, and is up 9-10 bucks at $1,492/ounce, the CD$ is down 0.00145 at 0.7586.
- DJIA down 12 at 27479, S&P up 1-2 at 3073 and the NASDAQ down 31 at 8403.
Corn prices were slightly stronger on delays in the harvest progress from moisture in the corn crop holding above 20% in many areas. This year’s corn export demand is much lower that what is needed to achieve the USDA’s target. There could be a fair number of acres that have corn standing well into the winter months, if not all the way to next spring.
- Closes: December at $3.78 ¾, down 3 cents, July at $4.00 ¾, down 4 cents, September at $3.96 ¾, down 2 cents, red December at $4.01, down 1 ¼ cents.
- CIF premiums were 3 cents firmer for November.
- The average trade estimate for tomorrow’s weekly export sales is at 300-650 tmt. Inspections were low.
- Ethanol production came in at 1.014 bpd, up from the previous week at 1.004 bpd. While production looks to be moving higher, it remains nearly 4.8% below last year on average. WE could see a 25.0 million bushel reduction to ethanol use in Friday’ USDA data.
- There are ideas that we could see a reduction to exports also, to the tune of 25.0-50.0 million bushels.
- Spreads: Z/H 9 carry, Z/N 22 carry, Z/Z 22 ¼ carry, H/K 7 carry.
The soybean market traded lower on harvest pressure and disappointment from the ongoing Phase I talks between the US and China. Chatter today was that the deal could get rolled back to December.
- Closes: January at $9.27 ½, down 6 ¾ cents, July at $9.63 ¾, down 6 cents, November at $9.67 ¼, down 4 cents.
- CIF premiums were 2 cents firmer for November.
- Trade estimates for weekly export sales: 600 tmt-1.2 mmt for beans, 150-300 tmt for meal and 5-25 tmt for soyoil.
- Forecasts call for beneficial moisture across Brazil this and next week, which should allow planting progress to pick up and help early development of the crop.
- Spreads: F/H 13 ¼ carry, F/K 25 carry, F/N 35 ½ carry.
The wheat market traded mixed with light buying interest emerging in Chicago from ongoing crop concerns in Argentina and Australia. Producers are unwilling sellers at current price levels, as they are more engaged in the row crop harvest. The winter wheat is set to get a pretty good shot of moisture with little or no concerns about damage to the crop.
- December closes: Mpls at $5.23 ¼, down 2 ¾ cents, KC at $4.27 ¼, down 1 ¼ cents, Chicago at $5.16 ¾, up 1 ½ cents.
- Weekly export sales are expected to be 350-600 tmt. Inspections were low.
- Paris wheat prices were higher on borrowed strength in the Chicago wheat market. Gains were limited from concerns of stiff competition from Russia in the world export arena.
- Argentina crop prospects hang around 18.8 mmt and Australia’s crop prospects are near the 15.5 mmt area.Australia’s wheat areas has been receiving rain events, which delays dry down and harvest activity.
- The USDA Attaché pegs the 2019/20 Russian wheat crop at 74.0 mmt. This compares to the latest USDA forecast at 72.0 mmt.
- Spreads: Mpls Z/H 16 carry, Z/z 54 ¾ carry, Kansas City Z/H 9 ¾ carry (creeping in on strength in the cash markets).