Afternoon Market Highlights


Highlights

Lots of waiting for the USDA Ag Forum acreage numbers and then they came out and there was not a whole lot of reaction to the numbers. The grain markets suffer from lack of fresh supportive news. Lots of grain and lack of decent demand for the US products at this time. China remains busy trying their best to corral the virus spreading around the country, along with trying to get ready-made food products to their docks and then to their people. The reduction in tariffs is scheduled for March 2, so there is a bit of a waiting period yet. 

  • March option expiry takes place with tomorrow’s close.
  • FND for March futures is next Friday, February 28, with all long positions being reported after the close on the 27th.
  • The next USDA S&D report is scheduled for March 10th at 11 AM CDT.
  • Daylight Savings Time takes place on Sunday, March 8. All clocks to spring ahead one hour on Saturday, February 7.
  • Talk is that China will live up to their end of the bargain, but the timing of their buying of US goods may get delayed for a bit longer as they wrestle with the coronal virus and work to keep their economy from faltering.
  • The energy markets were mixed with crude oil up 48 cents at $53.78/barrel (support is near $50.00 and resistance is near $55.00).
  • The US$ stays strong, up 171 at 99.87, the gold market soars and roars, up another 11-12 bucks at $1,620/ounce (ideas are that it could go to $1,800/ounce), and the CD$ is steady at 0.7540.
  • DJIA down 138 at 29210, S&P down 16 at 3370 and NASDAQ down 75 at 9742.     

Corn

The corn market continues to live in a stage of rangebound trade.  Weekly export sales are estimated at 700 tmt -1.1 mmt. Favorable rains around SA benefits their corn crop also. Ideas are that they will have a decent amount of grain to peddle come April, and with the weaker currency in Brazil, they just become all that much more competitive in the world market. 

  • Closes: March at $3.78 ½, down 2 cents, July at $3.85 ½, down 2 ¾ cents, September at $3.84, down 2 ½ cents, December at $3.88 ½, down 2 ¼ cents.
  • The USDA Ag Forum projects US 2020 corn acreage at 94.0 million acres. This compares to 89.7 million acres planted last year.
  • The window of opportunity is closing in on having the USDA reduce the 2019/20 corn crop.The focus will soon turn to the planted acres and spring weather.Ideas are that we could have a 2.0-2.6 billion carryout for 2020/21, which could overshadow any potential shortfall in the 2019/20 crop.
  • Spreads stay narrow on firming cash markets and farmer retention. H/K 4 ¼ carry, H/N 7 ¼ carry, N/Z 2 ¾ carry, Z/N1 15 ¼ carry.   

Oilseeds

Soybean prices slump on lack of fresh supportive news, not sign of China stepping up to the plate to buy US goods and big to bigger crops being harvested in South America. Weekly export sales are estimated at: 600 tmt-1.2 mmt for beans, 200-400 tmt for meal and 15-45 mmt for soyoil. 

  • Closes: March at $8.92 ¾, down 4 ½ cents, July at $9.11, down 4 ½ cents, August at $9.13 ¾, down 5 cents and November at $9.17 ½, down 5 ½ cents. The products were weaker with meal down a freckle and oil down 22 points.
  • The USDA Ag Forum projects the 2020 US soybean acreage at 85.0 million acres. This compares to 76.1 million acres planted last year.
  • Big crops look to get bigger for Argentina, should the beneficial rains continue to fall around the country.
  • The canola market bounced on lack of farmer selling and a bit renewed buying after the past several sessions of weaker trade. The market has lost 3-4 bucks since the 13th of February.
  • Spreads: H/K 8 ¼ carry, H/N 18 ½ carry, N/X 6 ½ carry, X/F 3 ¼ carry. 

Wheat

The wheat market struggles with a stronger US$ and plentiful world supplies. There is some business around, just not necessarily business that typically would go to the US. Prices drew additional pressure from technical selling. 

  • March closes: Mpls at $5.29 ½, down 6 ¾ cents, KC at $4.73 ¼, down 6 ½ cents, Chicago at $5.60, down 5 ¼ cents.
  • The USD Ag Forum projects the 2020 US All Wheat acreage at 44.5 million acres. This compares to 45.2 million acres planted last year.
  • Winter wheat is thought to be doing ok in the Southern Plains area, with the exception of the far SW area.
  • The domestic mills have been pretty quiet for spring wheat and winter wheat.
  • Farmers have been reluctant sellers at current price levels.
  • Spreads: Mpls H/K 10 ¾ carry, Kansas City H/K 7 ¼ carry, Chicago H/K 1 inverse.