Afternoon Market Highlights
3/17/2020 4:46:03 PM
The grain markets were mixed with beans and wheat trading higher on a bout of bargain buying, and corn trading significantly lower. Fears from the virus and economic situation continue to hang over the market.
- The energy markets are mostly weaker with crude oil down 1.88 to 26.82/barrel.
- The US$ is firmer, up 1.457 at 99.53, the gold market revived itself, trading up 42-43 bucks at 1529 and the CD$ finished lower at 0.7097.
- DJIA finished the day up over a thousand points, the S&P up 70 points and the NASDAQ up 430 points.
The corn market got hammered on weak demand for US corn and sharp weakness in crude oil. There are concerns of ethanol plants either slowing their production or closing all together from ongoing negative margins. Support in the May corn is at $3.40 (we got within 2 ¾ cents of that today).
- Closes: May at $3.44, down 10 ¾ cents, $3.50, down 8 ¼ cents, September at $3.54 ¾, down 6 ¼ cents, December at $3.62 ½, down 4 ½ cents.
- CIF premiums were 5 cents weaker for March and 4 cents weaker for April and 2 cents weaker for May.
- There are concerns that there will be much less use of gasoline given the current virus situation.
- With expectations of reductions in ethanol use and increased corn acreage for 2020/21 there are ideas that carryout could reach 2.8-3.0 billion bushels.
- South Korea has purchased over 300k tonnes of optional origin corn over the past couple of days.
- Processor bids were significantly weaker from negative margins and sharp weakness in the energy markets.
- Spreads: K/N 6 carry, N/U 5 carry, N/Z 12 ¾ carry, Z/N1 19 ½ carry.
Soybean prices were slightly higher on bargain buying and ideas of declining production in SA from dry weather conditions in southern Brazil and parts of Argentina. Price rallies were hampered by lack of demand for US soybeans.
- Closes: May at $8.24 ¼, up 2 ½ cents, July at $8.31, up ½ cent, August at $8.34 ¾, down ½ cent, November at $8.42 ¾, down 2 cents. The products closed higher with meal up 2 bucks and oil up 25 points.
- CIF premiums were Steady for March /Apr and 1 cent firmer for May.
- There are ideas that soymeal garnered strength from talk of reduced production of DDGs as ethanol plants look to slow down or close some of their operations around the US.
- Perhaps the soybean market can get some support from acreage ideas being less than what the USDA Ag Forum published in February.
- Spreads: K/N 6 ¾ carry, N/Q 3 ¾ carry, N/X 11 ¼ carry, Q/X 7 ¾ carry, X/F 3 carry, X/N1 5 carry.
Wheat prices were stronger as bottom pickers surfaced. KC got an additional boost from declining crop conditions in Kansas. The market seemed to ignore sizable improvements in TX, and OK. Mpls lost some ground against KC and Chicago.
- May closes: Mpls May at $5.09 ¼, down ½ cent, Dec at $5.42 ½, down 2 ½ cents, Kansas City May at $4.30 ¼, up 6 ½ cents, September at $4.45, up 5 cents, Chicago May at $4.99 ¼, up 1 ¼ cents, December at $5.15, down 1 ¾ cents.
- Paris milling wheat bounced higher on recovery in the Equity market.
- Spreads: Mpls K/N 9 ¾ carry, U/Z 14 ¾ carry, Kansas City K/N 6 carry, K/K 50 3/4 carry, Chiago K/N 1/2 carry, N/U 5 3/4 carry.