Afternoon Market Highlights
4/6/2020 3:17:03 PM
The grain markets struggle with the ongoing spread of the CoronaVirus and disruptions to the supply chain. Tyson Foods Inc. closed one of their Iowa hog slaughterhouses because of multiple cases of their employees affected by the CoronaVirus. Stimulus economic relief is expected to hit homes and small businesses this week. The OPEC meeting scheduled for today has been delayed until Thursday. Cool, rainy weather conditions across the US Midwest (later this week) could keep farmers out of the fields for another couple of weeks.
- The USDA S&D report is scheduled for Thursday at 11 AM CDT.
- There will be no trade Thursday evening or Friday this week in observance of the Good Friday Holiday.Trade will resume Sunday evening at 7 PM CDT.
- The energy markets are mixed with crude oil down 2 bucks at 26.33/barrel.
- The US$ is stronger, up 154 at 100.73, the gold market is sharply higher, up 56 bucks at 1693/ounce and the CD$ is up 0.0023 at 0.70935.
- DJIA is up 1552 at 22629, S&P up 164 at 2646 and the NASDAQ up 519 at 7892.
The corn market struggles with lack of fresh supportive news. The USDA last week pegged corn acreage at a whopping 97.0 million acres. It feels like the trade is expecting more like 92-94 million acres. Concerns mount about herd liquidation from the fallout in the livestock sector. The CoronaVirus continues to mess with the corn market from the fallout in the energy and ethanol markets.
- Closes: May at $3.27 ¾, down 3 cents, July at $3.33 ½, down 3 ¼ cents, September at $3.39 ¼, down 3 cents and December at $3.48 ½, down 2 ¼ cents.
- New contract lows made in most all months, with continued weakness in the crude oil market.
- Gulf premiums were 1 cent firmer for April and 2 cents firmer for May.
- Weekly export inspections were impressive at 1.3 mmt and above the top end of what the trade was expecting.
- The average trade estimates for Thursday’s USDA report: US stocks at 2.004 billion bushels versus 1.892 billion bushels in March and world stocks at 287.37 mmt versus 287.14 mmt in March.
- Hearing that some Illinois farmers started the corn seeding season this past Sunday (on their way to getting that 97.0 million acres in the ground this year).
- Spreads: K/N 5 ¾ cents, N/U 5 ½ cents, N/Z 14 ¾ carry, Z/N1 21 ½ carry.
Soybean prices opened lower on poor demand. Prices turned higher midday from concerns of dryness in Brail and Argentina that has led to some downward revisions to the soybean crop. There are ideas that Brazil’s soybean crop could be reduced to 122.0 mmt versus the current USDA estimate of 126.0 mmt. Argentina’s crop is also being downsized from ongoing hot/dry weather conditions.
- Closes: May at $8.55 ½, up 1 ¼ cents, July at $8.61 ¼, up 1 ¾ cents, August at $8.64, up 2 cents and November at $8.65 ¼, up 3 ¾ cents. The products were mixed with meal down 6-7 bucks and oil up 40 points.
- Weekly export inspections were poor at 298 tmt, coming in below the low end of what the trade was expecting.
- The canola market traded slightly higher on strength in the US soybean and soyoil markets. May canola closed up 1.10 at $462.50.
- The average trade estimate for Thursday’s USDA report: US stocks at 430 million bushels versus 425 million bushels and word stocks at 101.10 mmt versus 102.44 mmt in March.
- Spreads: K/N 5 ¾ carry, N/Q 2 ¾ carry, N/X 4 ¼ carry, X/F 1 carry, X/H 14 ½ inverse, X/N1 8 ½ inverse.
The wheat market traded higher on export ideas and dryness in the Black Sea Region (especially southern parts of Russia) and cold temps throughout the US Southern Plains area this week. Prices retreated as the day wore on from disappointing weekly export inspections. Winter wheat conditions were reported at 62% G/E versus 60% last year.
- May closes: Mpls at $5.26 ¾, up 2 ¼ cents, KC at $4.74 ¾, up 2 ¾ cents, Chicago at $5.55 ¾, up 6 ½ cents.
- Weekly export inspections were poor at 320 tmt, coming in at the low end of what the trade was expecting.
- The average trade estimates for this week’s USDA S&D report: US stocks at 940 million bushels, unchanged from March and world stocks at 287.37 mmt versus 287.14 mmt in March.
- Jordan bought 120k tonnes of optional origin wheat for LH Jun/FH Jul at $233.50/$226.50/tonne C&F.
- Turkey looks to purchase 250k tonnes of optional origin wheat.
- Spreads: Mpls K/N 11 carry, Kansas City K/N 6 ¼ carry, Chicago K/N 5 ¼ inverse.