Afternoon Market Highlights
3/6/2020 3:05:49 PM
The selling continues across the grain markets with sharp losses in the equity and energy markets. Investors have been fleeing Wall Street in search of a safer haven for their money.
- Daylight Savings Time this weekend. Spring ahead my friend! Roll clocks forward 1 hour.
- 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.
- The energy markets are sharply lower with crude oil down over four bucks at $41.45/barrel (support at $40/barrel).
- US$ down 810 at 96.01, gold up 8-9 bucks at 1677, CD$ steady at 7448.
- DJIA down 697 at 25423, S&P down 81 at 2932, NASDAQ down 305 at 8433.
Corn prices were in the dumps on lack of fresh supportive news and spillover weakness in outside markets. Brazil is expected to harvest a big crop of corn this year. Farmers are mostly unwilling sellers at current price levels. Most months settled the week at 5-10 cents above contract lows.
- Closes: May at $3.76, down 5 ¾ cents, July at $3.79 ¼, down 4 ½ cents, September at $3.77 ½, down 2 ½ cents, December at $3.81 ½, down 2 ¼ cents.
- Gulf premiums were 1-2 cents weaker for March.
- The USDA announced the sale of 211k tonnes of corn to Unknown destinations for the current marketing year.
- The USDA also announced the sale of 235k tonnes of US corn to Japan for the current marketing year.
- Chines corn imports are estimated at 6.0 mmt for 2019-20 as they increase poultry and aquatic animals, hence the need to increase feedstuffs supplies.
- South Korea bought Argentine corn.
- Spreads: K/N 2 ¾ carry, N/Z 2 carry, Z/N1 18 ½ carry.
The soy complex was weaker on spillover weakness in the energy and equity markets. The meal market did manage to pop into positive territory by the close. China continues to purchase SA bean over US beans, despite reduced tariff on US Beans to China and their commitment to purchase increased beans from the US.
- Closes: May at $8.91 ¼, down 5 ¾ cents, July at $9.00, down 5 cents, August at $9.01 ¾, down 4 ¾ cents, November at $9.05 ½, down 3 cents. The products were mixed with meal up 90 cents and oil down 62 points.
- Gulf premiums were steady for March.
- Brazil is set to ship massive amounts of soybeans to China as the farmer continues to be aggressive seller on weakness in their currency. Exports are able to ramp up from dwindling rain events along Brazil’ export facilities.
- Argentina is still dry with some scattered showers expected to move in next week.
- Spreads: K/N 8 ½ carry, N/X 5 ½ carry, X/F 2 ½ carry, X/N1 1 inverse.
Wheat prices struggle with technical selling and plentiful supplies of wheat, despite weakness in the US$. There was chatter that China has given tariff exemptions for some importers to use to purchase US wheat. Not sure that the zero ergot issue has been changed, so might be tough to peddle US spring wheat to China at this time.
- May closes: Mpls at $5.25 ¼, up 2 ¾ cents, KC at $4.44, down 2 ¼ cents, Chicago at $5.15 ¾, down 3 cents.
- The French wheat crop holds steady at 64% G/E.
- The funds have gone from long 8k to short 2k contracts over the past week and they have gone from short 14k contracts to short 17k contracts in Mpls.
- Spreads: Mpls K/N 9 ½ carry, Kansas City K/N 7 ¼ carry, Chicago K/N 1 carry. Mpls May sits at 79 cent premium over the KC May.