Afternoon Market Highlights
1/15/2020 4:06:29 PM
The long awaited signing of the Phase One trade agreement with China took place today. There is much uncertainty surrounding the details of what the agreement entails. No threatening weather to speak of over the next week or so. Next week is a short trade week with the grin markets closed on Monday, in observance of the Martin Luther King Day holiday.
- The energy markets are weaker with crude oil down 13 cents at $58.10/barrel.
- The US$ down 157 @ 97.22, the gold market up 11-12 bucks at $1,556 / ounce and the CD$ up a hair at .7667.
- DJIA up 90 @ 29030 (pushing up to the 30k mark that was thought to have been triggered by the first of the year), S&P 5-6 @ 3293, NASDAQ up 7 @ 9258.
The corn market traded lower on weakness in the soybean market and uncertainty over the details about Chinese purchases of US corn. China stated that market conditions would dictate timing of purchases.
- Closes: March at $3.87 ½, down ½ cents, July at $4.00 ½, down 1 ¾ cents,
- Weekly ethanol production was decent at 1,0905,000 barrels per day, up 33k bpd. Stocks were a bit on the high side.
- Weekly export sales estimates: 500-950 tmt.
- Spreads: H/K 6 ½ carry, H/N 12 ¾ carry, N/Z 2 carry.
I thinks we saw buy the rumor / sell the fact type action today. The soybean market had been trading higher on hopes of a good deal and that China would be a significant buyer of more US soybeans.
- Closes: March at $9.28 ¾, down 13 ½ cents, July at $9.54 ¼, down 13 cents, November at $9.58 ¾, down 10 ¾ cents. The products were lower with meal down 1-2 bucks and oil down 77 points.
- Weekly export sales estimates; 400-850 tmt for beans, 75-250 tmt for meal and 0-25 tmt for oil.
- Soyoil trade lower on weakness in Malaysian palm oil stocks and big US soyoil stocks. Prior to today, the funds have been holding a long position in soyoil, to the tune of 100k contracts or slightly higher.
- NOPA crush for December was above trade estimates at 174.8 mmt.Soyoil stocks at 1.751 billion pounds (8-month highs).
- There was a bit of uncertainty over whether China would ramp up US bean purchases in light of the upcoming SA bean harvest. Brazil farmers have been active sellers with the weakness in their currency.
- South America soybeans are said to be the cheapest March and forward, in time for the Brazilian harvest to begin in a few weeks.
- Spreads: H/K 13 ¼ carry, H/N 25 ¼ carry, N/X 4 ½ carry, X/F 3 carry.
Th wheat market traded both sides in trying to figure out just what all the signing ceremony would entail. The signing is a done deal. What is not a done deal, or is not real clear, is what the commodity breakdown will be, and can we count on China to followthrough with their said increased purchase of US ag products over the next two years.
- March closes: Mpls at $5.56 ¼, up ¼ cents, KC at $4.96 1/4, down ¾ cent and Chicago at $5.73 ¼, up 4 ¾ cents.
- Chicago traded higher on new speculative buying from rising world prices. Open interest was said to be increasing, suggesting new longs getting in the wheat market.
- By class stocks to use: HRW 56.5%, HRS 46.2%, SRW 35.8%, White 30.4% and HAD 16.4%
- Weekly export sales estimates: 200-500 tmt.
- Ukraine and France both look to step up their exports. France expects to despite ongoing strikes in the country.
- Freezing rains were said to be moving across the US Southern Plains today.
- Spreads: Mpls H/K 8 carry, Kansas City H/K 7 1/2carry, Chicago H/K ½ carry.