Afternoon Market Highlights


Highlights

The grain markets have been trading rangebound from non-threatening weather in South America and the ongoing spread of the coronavirus throughout the Chinese provinces. While China allegedly pledges to honor the increased purchases of US goods, they have not yet stepped up to the plate. 

·         The USDA updated US and world balance sheets are scheduled for release February 11th at 11 AM CST.

·         The Ag Forum Outlook is scheduled for February 20 & 21.

·         March options expiration take place at the close on February 21st.  First notice day for March futures is February 28th with all longs being reported after the close on the 27th.

·         The energy markets are mostly weaker with crude oil down 55 cents at $50.40/barrel.

·         The US$ is up 182 at 98.67, the gold market is up 4-5 bucks at $1,571/ounce and the CD$ is weaker at 7517. The gold market rose on fears that the coronavirus could slow the economy.

·         DJIA down 276 at 29103, S&P down 16 at 3329 and NASDAQ down 58 at 9513.     

Corn

The corn market traded in positive territory on a bout of short covering ahead of the weekend. The March contract traded in a nine-cent trading range this week. Fresh news was light and optimism over Phase One Trade Agreement purchases swayed back and forth all week. Non-threatening weather in South America weighed on prices. 

·         Closes: March at $3.83 ½, up 4 ¼ cents, July at $3.92 ¼, up 4 ¼ cents, September at $3.89 ½, up 4 cents and December at $3.94, up 4 ¼ cents.

·         Forecasts for rains in Brazil could slow bean harvest and consequently delay the planting of their 2nd corn crop.

·         Spreads: H/K 4 ¾ carry, H/N 9 carry, N/Z 1 ¼ carry. Consider having orders in place to roll short March hedges to May at 5 cents or better. We may see some jockeying of positions next week ahead of the USDA report, but otherwise #2 grade corn supplies are tight.  

Oilseeds

Soybean prices turned higher on a bout of technical buying and short covering.  The March contract saw a nine-two cent drop from Jan 2 to Feb 3 (9.61-8.68 ¾).  The soybeans appear to be stuck in a 10-20 cent range from near record to record harvest in Brazil to Chinese optimism (that they will prove true on their trade deal to significantly increase their purchases of US goods). 

·         Closes: March at $8.82, up 1 cent, July at $9.08, up ¼ cent, August at $9.12 ½, unchanged and November at $9.18 ½, down 1 ½ cent. The products were mixed with meal up 1-2 bucks and oil down 27 points.

·         Forecasts for rain around Brazil could slow bean harvest. Yield reports so far suggest that another record crop is in the making. Last ranges I have seen/heard are from 124.0 mmt to 126.0 mmt. The USDA was last at 123.0 mmt.

·         Spreads: H/K 12 ¾ carry, H/N 25 ¾ carry, N/X 10 ¼ carry, X/F 5 carry.  

Wheat

The wheat market traded higher on a bout of short covering ahead of the weekend. It has bee a tough go for the wheat market this week. Demand is slow, optimism is waning over possible Chinese demand for US wheat and the winter wheat crop is getting beneficial moisture. Domestic mills for both spring and winter wheat appear to have their mitts full for the time being. The trade is expecting a slight reduction in US and world ending stocks. 

·         March closes: Mpls at $5.35 ¾, up 3 ¼ cents, KC at $4.73, up 5 ¼ cents and Chicago at $5.58 ¾, up 2 ½ cents.

·         Russia may curb their wheat exports because of the spread of the coronavirus in China.  China had made inroads with Russia during the Trade War between China and the US, but it may take some time to implement Russian shipment to China for now.

·         EU wheat prices rose on weakness in the Euro against the US$ and improving demand. China has been a buyer of French wheat this week.

·         Spreads: Mpls H/K took a poke at 10 cents again but settled at 9 ½  carry, Kansas City H/K 6 carry and Chicago H/K at a 2-cen inverse.