Afternoon Market Highlights
4/8/2020 4:04:07 PM
The grain markets were mixed with corn pressured form the meltdown in ethanol production on lack of demand for gasoline as many folk continue their work from home status. Soybeans were mixed with lack of demand and higher energy prices. The wheat market draws strength from adverse weather conditions and concerns of possible tightening supplies.
- The USDA S&D report tomorrow at 11 AM.
- The energy markets are mostly stronger with crude oil up 2.51 at 26.14/barrel.
- The US$ is stronger, up 248 at 100.147, the gold market is down 2-3 bucks at 1669 and the CD$ is slightly weaker at 0.71445.
- DJIA is up 779 at 23433, S&P up 97 at 2739 and the NASDAQ up 204 at 8091.
The corn market failed to hold early gains. Another week of a significant drop in ethanol production pushed corn prices into negative territory.
- Closes: May at $3.30, down 1 ½ cents, July at $3.35 ½, down 1 ¾ cents, September at $3.40 ½, down 1 ¾ cents, December at $3.49 ¼, down 1 ¾ cents.
- Weekly ethanol production declined by 168k barrels per day to 672k barrels per day. This is the second week to have a massive decline (last week saw a decline of 165k barrels per day). Stocks rose to a record level of 27.1 million barrels.
- Weekly export sales estimates: 1.2-1.9 mmt (we had the big sale to China of 500 tmt announced last week, with the lion’s share slated for 2020/21).
- Spreads: K/N 5 ¼ carry, N/U 4 ¾ carry, N/Z 13 ¾ carry, Z/N1 22 carry.
The soybean market finished mixed on position squaring ahead of tomorrow’s USDA data and a long weekend. Losses were limited on hopes of Chinese business with the logistical snags in Brazil getting vessels loading and on their way to Chinese ports for unload. There are ideas that China will come to the US for some quick ship beans to tide them over until they get their massive purchases from Brazil.
- Closes: May at $8.54 ½, down ¼ cent, July at $8.61 ¾, up ¾ cents, August at $9.64 ½, up ½ cent, November at $8.68, up 1 ¼ cents. The products were lower with mela down a buck and oil down 30 cents.
- Weekly export sales estimates: 700 tmt-1.4 mmt for beans, 100-275 tmt for meal and 8-45 tmt for soyoil.
- The canola market was slightly higher in quiet trade as the market awaits direction from tomorrow’s S&D report.
- Spreads: K/N 7 ¼ carry, N/Q 3 carry, N/X 5 ¾ carry, X/F 3 carry, X/H 9 inverse, X/N1 ¾ inverse.
Wheat prices garnered strength from concerns of dryness in Europe, Russia and Ukraine. Prices drew additional support from food security with Russia and Kazakhstan implementing quotas on their wheat exports. A bout of cold temperatures forecast for the Southern Plains later this week and over the weekend raised some concern about possible damage to the winter wheat crop.
- May closes: Mpls at $5.30, up 5 ½ cents, KC at $4.79 ¼, up 6 cents, Chicago at $5.48 ¼, down 1 cent.
- Weekly export sales estimates: 200-550 tmt.
- Where the EU wheat crop saw heavy rain events during the seeding season, they are now experiencing an extended period of dryness.
- Spreads: Mpls K/N 10 ¾ carry, Kansas City K/N 7 carry, Chicago K/N ½ inverse.