Afternoon Market Highlights
1/27/2020 2:05:32 PM
The grain markets took a hit early in the session on uncertainty over the Chinese virus that has spread over various countries, including the US. Wheat and soybeans saw additional pressure from lack of Chinese purchases after the signing of the Phase One Trade Agreement. China is on the Lunar New Year Holiday this week, which has been extended to February 2nd.
- The energy markets are mostly weaker with crude oil down a buck at $53/barrel.
- The US$ is up 106 at 97.95, the gold market is up 8 bucks at 1580 and the CD$ is down 0.0024 at 0.75855.
- DJIA down 377 at 28611, S&P down 45 at 3248 and NASDAQ down 145 at 9169.
- StatsCan December 31 stocks report is scheduled for February 5th.
- The next biggie will be the USDA March 31st Prospective Planting Intentions and March 1 Grain Stocks.
Corn prices were on the defensive from uncertainty about the Chinese virus that has been spreading around the globe. Prices drew additional pressure from technicals and weakness in the equity, soybeans and wheat markets.
- Closes: March at $3.80 ½, down 6 ¾ cents, July at $3.92 ¼, down 5 ½ cents, September at $3.91 ¾, down 4 cents, December at $3.95 ¼, down 3 cents.
- Weekly export inspections were 667 tmt, mid-range of trade estimates (500-900 tmt).
- The USD announced the sale of 111k tonnes of corn sold to Japan.
- Funds were estimated short nearly 70k contracts, leaving the corn market vulnerable to short covering rallies.
- This year’s corn quality remains a concern with the low TW, higher moisture and high FM. The FM seems to be the biggest challenge to control. It’s tough to handle this year’s corn without creating a significant amount of additional screenings.
- Spreads: H/K 6 ¼ carry, H/N 11 ¾ carry, N/Z 2 ¾ carry.
The soy complex was weaker on waning optimism that China would buy a significant amount of beans from the US once the trade agreement was signed on the 15th. Prices drew additional pressure from the spread of the Chinese virus and weakness in the equity and energy markets.
- Closes: March at $8.97 ¼, down 4 ¾ cents, July at $9.11, down 4 ¾ cents, August at $9.29 ¼, down 5 cents, and November at $9.33 ½, down 5 ¼ cents. The products closed in negative territory but bounce off their lows made earlier in the session.Soymeal finished down 50 cents and oil finished down 50 points.
- Weekly export inspections came in at 1.0 mmt, near the top end of the trade estimates (700 tmt-1.3 mmt).
- The Brazilian soybean harvest was 4.2% complete as of last week. This compares to 13% last year at this time.
- The canola market traded lower in sympathy with the US soy complex.
- Spreads: H/K 13 ¾ carry, H/N 27 ½ carry, N/X 9 carry, X/F 5 ½ carry.
The wheat market traded lower on concerns of the Chinese virus and weakness in the equity and row crops. Prices drew support from technicals and a bout of short covering, which pushed KC into positive territory by the close. Chicago and Mpls closed slightly lower. Overall demand for US wheat is disappointing, with no sign of China in the market for US wheat.
- March closes: Mpls at $5.47 ¼, down ¼ cent, KC at $4.87 ¼, up 1 ¼ cent and Chicago at $5.72 ¼, down 1 ¼ cent.
- Weekly export inspections came in at 224 tmt, well below trade estimates between 400-600 tmt.
- Russian wheat price for export were higher on strength in their domestic wheat prices.
- Egypt plans to add 330k tonnes of additional storage to their existing storage.
- Spreads: Mpls H/K 9 ½ carry, Kansas City H/K 7 ½ carry, Chicago H/K 1 ¼ cent inverse.