Afternoon Market Highlights
3/5/2020 2:50:16 PM
Broad-based selling was seen across the grain and oilseed markets as uncertainty about the fate of the global economy roils Wall Street. Coronavirus has made its way into the US and creating heightened concerns for the states of New York and California. Argentine farmers look to protest the hike in export taxes on their oilseeds by organizing a 4-day strike.
- Daylight Savings Time this weekend. Spring ahead my friend! Roll clocks forward 1 hour.
- The energy markets are weaker with crude oil down 98 cents at $45/97/barrel (support is seen near $42/barrel).
- The US$ down 596 at 96.40, the gold market is sharply higher, up thirty bucks at 1672 as the investment community seeks a safe haven, and the CD$ is slightly lower at 7451.
- Wall Street took a beating again today on more concerns of a global economic slowdown as the coronavirus moves through the US.
- DJIA down over a thousand points at 26,049, S&P down 112 at 3002, NASDAQ down 287 at 8731.
- The next USDA S&D report is scheduled for March 10 at 11 am CDT. The next biggie will be the March 31 Planting Intentions and March 1 Grain Stocks at the end of the month.
Corn prices were on the defensive from big South America crop ideas and a bout of profit taking from recent moves higher. Prices drew additional pressure from sharp declines on Wall Street.
- Closes: May at $3.81 ¾, down 3 ¼ cents, July at $3.83 ¾, down 2 ½ cents, September at $3.80, down 2 cents, December at $3/83 ¾, down 1 ¾ cents, July 21 at $4.00 ½, down 11/2 cents.
- CIF premiums were unchanged for FH March and 1 cent weaker for LH Mar.
- Weekly export sales were 869k tonnes versus trade ideas of 700 tmt-1.1 mmt.
- The average trade estimate for next week’s USDA S&D report: US carryout at 1.888 billion bushels (1.798-1.942) and world carryout at 297.25 tonnes (294.90-299.50).
- Taiwan buying Argentine corn and record US ethanol stocks also pressured the corn market.
- Spreads: K/N 1 ¾ carry (heading for an inverse it seems), N/Z ¾ cent inverse, Z/N1 16 ½ cent carry.
Soybean prices lost ground today on lack of Chinese buying and harvest pressure from Brazil. Farmers have been active sellers from weakness in their currency. Ideas are that they have sold nearly 60% of their huegorphus crop. Prices drew additional pressure from weakness in the stock market on coronavirus concerns.
- Closes: May at $8.97, down 10 ¼ cents, July at $9.05, down 10 ¾ cents, August at $9.06 ½, down 10 cents, November at $9.08 ½, down 9 cents. The products were lower with meal down 4-5 bucks and oil down 34 points.
- CIF premiums were 1 cent firmer for FH Mar and unchanged for LH March.
- May beans traded above yesterday’s high and closed below yesterday’s low (bad juju one thinks).
- Weekly export sales were 346 tmt versus trade ideas of 500 tmt to 1.0 mmt. There are about six months left in the marketing year. Might be tough to hit the target on this one.
- The average trade estimate for next week’s USDA report: US carryout at 0.426 million bushels (0.410-0.450) and world carryout at 99.30 tonnes (97.80-101.00).
- South America production estimates: Argentina at 53.75 mmt (53.00-55.50) and Brazil at 125.03 mmt (124.20-126.00).This compares to the USDA at 125.00 mmt in their Feb report.
- The canola market took it in the shorts from weakness in the US soy complex. May canola closed down four bucks at $462.90.The K/N spread closed at an 8.10 carry.
- Spreads: K/N 7 ¾ carry, N/X 4 carry, X/F 1 ¼ carry, X/N1 5 ½ inverse.
Wheat prices struggle with plentiful global supplies. There has been a decent amount of demand for wheat, but competition is fierce in the world market. The US$ stays strong overall, despite recent weakness. The USDA lowered the all wheat carryout in their Feb S&D report, but the big declines were in the SRW and White winter wheat classes, not HRW or NSW classes. World stocks stay large or get larger.
- May closes: Mpls at $5.22, down 7 ¼ cents, KC at $4.55 ½, down 7 ¾ cents, Chicago at $5.18 ¾ cents.
- Weekly export sales were mid-stream at 570 tmt. The high end of the trade estimates was closer to 675 tmt.
- Morocco did not receive any offers in their recent tender for 354 tmt of durum.
- The average trade estimate for next week’s USDA S&D report: US carryout at 0.944 million bushels (0.940-0.9650) and world carryout at 287.47 mmt (286.30-291.00).
- Spreads: Mpls K/N 10 carry, Kansas City K/N 7 ¼ carry, Chicago K/N ¾ cent carry.