Afternoon Market Highlights
12/5/2019 1:54:14 PM
Oh! So quiet in the ag markets once again. We seem to be totally out of fresh supportive news and the farmers are mostly unwilling sellers at current prices. The focus will be on the USDA report next week and then the bigger deal will be the January final production report with March 1 grain Stocks and the first assessment of winter wheat seedings. We are still flying with no real trading partners. The US/China deal is still under discussion, The USMCA looks to have gone back to the drawing board to clear up a couple more details and the US/Japan trade agreement has been very quiet for the time being.
- StatsCan report out tomorrow morning. Their all wheat production is estimated at 326 mmt versus 32.5 mmt in September and their Canola production is estimated at 19.6 mmt versus 19.4 mmt in September.
- The USDA monthly S&D is scheduled for Tuesday, December 10th at 11 AM CT. Given the trade estimates, this could be a pretty non-eventful report.
- President Trump stated this afternoon that discussions with China are taking place now and are going well
- The energy markets are higher today with crude oil up 0.12 at $58.55/barrel
- The US$ index down 22 ticks at 97.428 and the DIJA up 20.27 at 27670.05
Corn prices drifted lower on weak demand for US corn and possibly some position squaring ahead of next week’s USDA S&D report. There are forecasts for another bout of snow to move across the Northern Plains early next week.
- Closes: March at $3.76 ¾, down 1 ¾ cents, July at $3.87, down 2 ¼ cents, Setpember at $3.86 ¼, down 1 ¼ cents, and December at $3.90 ½, down 1 ½ cents.
- Weekly export inspections were disappointing at 546 tmt.US sees stiff competition from Ukraine (through Feb) and Argentina (beyond Feb).
- The Average trade estimate for US ending stocks is at 1.919 billion bushels (1.890-1.960). This compares to 1.910 billion bushels in November.
- Spreads: H/K at 5 ¾ carry, H/N at 10 carry, and N/Z at 3 ¾ carry
Soybean prices traded higher on technicals and spillover strength in the meal market. Ideas of big South American crops could keep a lid on rallies in the soybean market. Soymeal drew strength from a crush plant in Argentina experiencing financial struggles, and difficulties making commitments. Argentina has carried the title of being the #1 soymeal exporter in the world market.
- Closes: January at $8.84 ¼, up 6 ¼ cents, March at $8.98 ¾, up 6 ¼ cents, November at $9.33, up 3 ¾ cents.
- Weekly export sales were below what the trade was expecting. Sales were reported at 684 tmt and the trade was looking for 700 tmt to as much as 1.3 mmt.
- The average trade estimate for US ending stocks is at 0.476 million bushels (0.455-0.500). This compares to November at 0.475 million bushels.
- News today regarding that an Argentine soy crusher is experiencing financial stress fueled the meal market higher today, with the January contract up $4.80 at $301.50 a ton.
- USDA announced the flash sale of 245,000 metric tonnes of soybeans to unknown destinations
- Spreads: F/H at 14 ½ carry, F/K at 29 carry, F/N at 41 ¾ carry, N/X at 6 ¾ carry
The wheat market opened a bit higher but failed to hold at the higher prices. Prices turned lower midday on disappointing demand and plentiful global supplies. Mpls looked to be gaining on KC and Chicago. The spot floor has seen an increase in car receipts this week and bids have retreated. It seems that wheat is what the elevators have available to load in the cars.
- March closes: Mpls at $5.14, down 1 ¼ cents, KC at $4.35 ¼, down 5 ¼ cents, and Chicago at $5.23 ¾, down 3 ¾ cents
- Algeria bought 500k tonnes of optional origin milling wheat for Dec/Jan shipment.
- Japan bought 161k tonnes of wheat for LH Jan/FH Feb (57k US spring, 19k US HRW and 15k US White).
- Weekly export sales were 228 tmt, versus trade estimates of 300-700 tmt.
- The average trade estimate for US ending stocks is at 1.010 billion bushels (0.989-1.025). This compares to 1.014 billion bushels in November.
- Spreads: Mpls H/K 9 carry, KC H/K 7 ¾ carry, and Chicago 4 ¼ carry