Afternoon Market Highlights


Highlights

The grain markets were thought to have garnered strength from hopes of increased demand for meal and wheat. The corn market lagged beans and wheat on dwindling demand for corn use for ethanol. The stocks market is still on the defensive although has bounced of lows made earlier in the session.  Today marks the first day that the New York Stock Exchange was 100% electronic trading after closing its doors from the CoronaVirus. 

  • The Federal Reserve is planning to purchase $125 billion in securities every day this week.
  • Weather conditions are expected to be non-threatening this summer.While there could be a delay to spring planting this year, it is not expected to be anything like last year.
  • The energy markets are mixed with crude oil up 68 cents at 23.31/barrel and RBOB down 0.01439 at 0.4615.
  • The US$ down 394 at 102.42, the gold market up 75 bucks at $1,559/ounce and the CD$ down 0.0045 at 0.6886.
  • DJIA down 400-700 at 18666, S&P down 57 at 2247 and NASDAQ down 16 at 6890.
  • The Cold Storage report for end of February showed frozen beef stocks at 491 million pounds, up form 488 million pounds in January and 474 million pounds this time last year.
  • Frozen pork stocks were at 662 million pounds at the end of February versus 626 million pounds in January and 616 million pounds this time last year. 

Corn

The corn market traded on the defensive from lack of ethanol demand for fuel with the current virus situation across the globe. 

  • Closes: May at $3.43 ½, down ¼ cent, July unchanged at $3.49 ½, September at $3.55 ¼, up ½ cent, December at $3.64 ¼, up 1 cent.
  • Inspections were reported at 817 tmt, in the range of trade expectations of 700 tmt-1.05 mmt.
  • Poet looks to suspend the purchasing of corn at their ethanol plants with the current fallout of demand for motor fuels as more states look to keep their folks safe at home.
  • Spreads: K/N 6 carry, N/U 5 ¾ carry, N/Z 15 carry, Z/N1 16 carry.

Oilseeds

The soy complex continues to soar as strength in the meal market fuels the soybean market. Meal stocks are said to be very tight in China. Prices drew additional support from concerns about potential delays in shipments from South America. 

  • Closes: May at $8.84, up 21 ½ cents, July at $8.85 ½, up 20 ¾ cents, August at $8.84 ¾, up 19 ½ cents, November at $8.72 ½, up 11 ¾ cents. The products were stronger with meal up 8-9 bucks and oil up 50 points.
  • Inspections were reported at 571 tmt, in-line with trade estimates of 450-650 tmt.
  • Hopes for increased demand from China and logistical pickles in SA gave the soybean market an added boost.
  • Ports in Argentina remain open amidst port strikes from workers concerned about the CoronaVirus.
  • AgRural pegs the Brazilian bean harvest at 66% complete versus 67% this time last year. Production is estimated at 124.3 mmt compared to 125.6 mmt previously because of hot/dry weather conditions in Rio Grande do Sul.
  • Brazil’s state of Mato Grosso sees non-essential services closing and the suspension of operations at industrial sites on CoronaVirus concerns.This could possibly affect China’s Cofco and Bunge (US based grain trader) as they both have plants in the area.
  • The Brazilian Real continues to weaken (5.1230 versus 5.0627 going home last Friday).
  • Spreads: narrowing across the board with the K/N 1 carry, N/X 13 inverse, X/F 2 inverse, X/H 27 ¾ inverse (hit 30 cent inverse earlier), X/N1 16 ¾ inverse.

Wheat

The wheat market pushed higher on increased global demand, strong domestic mill demand. Mpls lagged KC and Chicago as China’s demand for wheat is not thought to be that of spring wheat, because their specifications are thought to be much tighter than what we could most likely deliver. Prices drew additional support from weakness in the US$. 

  • May closes: Mpls at $5.30 ¼, up 9 ¼ cents, KC at $4.89 ½, up 20 ½ cents, Chicago at $5.62 ½, up 23 ¼ cents.
  • Inspections were reported at 349 tmt, the bottom of the trade estimates of 350-600 tmt.
  • Big day for Mpls spot floor with 125 car receipts/ 4 trains. 14s were 5-45 cents weaker and 15s were unchanged to 20 cents weaker.
  • Paris milling wheat prices were stronger in sympathy with the Chicago wheat market. The challenge France faces is that of securing enough trucks and staff to keep their factories and ports running during the current virus situation.
  • Spreads: Mpls K/N 8 ½, Kansas City K/N 3 ¾ carry, Chicago K/N 6 ¼ carry. Mpls May sits at a 40 cent premium on the KC May.