Afternoon Market Highlights
2/4/2020 1:55:45 PM
The grain markets started out higher on a technical bounce from recent weakness. Prices were tempered from big crop ideas in Brazil and Argentina. There was an overall lack of fresh supportive news to keep the momentum going this morning. The grains closed higher but were off their daily highs made earlier in the session. There are ideas that the current virus situation in China may not be affecting their overall economy as badly as what was thought to be the case last week.
- The energy markets are mixed with crude oil trading down 41 cents at $49.70/barrel.
- The US$ is up 151 at 97.95, the gold market is down 26-27 bucks at $1,552/ounce and the CD$ is up a hair at 0.7527.
- DJIA up 480 at 28879, S&P up 58 at 3303 and NASDAQ up 198 at 9471.
- StatsCan December 31 stocks report is scheduled for February 5, the USDA’s monthly S&D report is scheduled for February 11 and the Annual Ag Forum is scheduled for February 20 & 21.
The corn market traded higher on spillover strength in the wheat and soybean markets. Gains were limited from lack of fresh supportive news and ideas that there may be no big Chinese buying of US goods until after the containment of the Chinese coronavirus.
- Closes: March at $3.82 ½, up 3 ½ cents, July at $3.92 ¾, up 3 ¼ cents, September at $3.89 ½, up 2 ¾ cents, December at $3.92 ¾, up 3 ¼ cents.
- North Dakota’s corn harvest progress was estimated at 49% complete at the end of January.
- US corn production is expected to see a sizable increase in acreage for 2020/21.
- Spreads: H/K 6 carry, H/N 10 ½ carry, N/Z even money. Consider rolling short March hedges at 6 cents.
Soybean prices traded higher on strength from outside markets overnight. Palm oil and Chinese markets were both significantly higher. Prices retreated from the earlier highs on ideas of big crops in both Brazil and Argentina.
- Closes: March at $8.79 ½, up 2 ½ cents, July at $9.06 ¼, up 1 ¾ cents, August at $9.11 ½, up 2 cents, November at $9.18 ¼, up 1 ¾ cents. The products were mixed with meal down 1-2 bucks and oil up 44 points.
- CIF premiums were 1-2 cents weaker for Feb and March.
- Brazil’s soybean production is estimated at 124 mmt, up 7.0 mmt from last year. Early yield reports in Matto Grosso are said to be good at 57.1 bushels per acre.
- Harvest activity in Brazil is slowed because of rain events in northern and central areas.
- Rumors today were that China was a buyer of Brazil beans for March and April at nearly 15-cent discount to the US.
- The canola market traded 2-3 bucks higher on borrowed strength in the US soyoil market and strength in the palm oil market.
- Spreads: H/K 13 ½ carry, H/N 27 carry, N/X 12 ¼ carry, X/F 6 carry. Consider rolling short March hedges to the May at 13 ¾-14 cents.
The wheat market traded higher on technical buying after recent weakness across all three wheat markets. Stocks in Mpls and Dul were increased 233k and 91k bushels respectively. Country movement was pretty light. Spot floor bids were down 40 cents for 14s and unchanged for 14.5s and 15s. Car receipts were 53 with 2 trains.
- March closes: Mpls at $5.31 ¾, down 1 ¼ cents, KC at $4.67 ¾, up 1 cent and Chicago at $5.57 ¼, up 1 ¾ cents.
- Paris milling wheat prices stabilize on decent demand after recent setbacks from the corona virus situation.
- The US Southern Plains should see beneficial moisture form this week’s rain/snow winter storm that is moving up from the south.
- Spreads: Mpls H/K 10 carry (I took my dime today), Kansas City H/K 6 ½ carry, Chicago H/K 3 inverse.