Afternoon Market Highlights
4/17/2020 5:04:11 PM
Another tough week for the markets as demand destruction takes its toll on corn and beans. Prices drew additional pressure from weak demand and concerns of a possible decline in feed demand. The President has left it up to each state’s government as to how they re-open their state after the virus situation. The equity market was stronger, seeing the news as positive for the US economy. The next week’s forecast for warmer weather should be good getting farmers out in the fields and getting the 2020 spring planting season off to a good start.
- The energy markets were mixed with crude oil down 1.75 at 18.27 in the May and down 39 at $25.03 in the June.
- The US$ is weaker, down 309 at 99.71, the gold market is down 38 bucks at 1684 and the CD$ is up 0.00565 at 0.71445.
- DJIA was last up 704 at 24242, S&P up 82 at 2870 and NASDAQ up 117 at 8650.
The corn market opened higher on a bout of bargain buying after several sessions of lower prices (making new contract lows and dipping down to 3 ½ year lows during the week). Prices continue to suffer the ramifications of the drop in gasoline demand and ethanol use from the “Shelter in Place” situation across the US.
- Closes: May at $3.22 ¼, up 2 ½ cents, July at $3.29 ¼, up 3 cents, September at $3.33 ¾, up 2 ¾ cents, December at $3.43 ½, up 2 ½ cents.
- Gulf premiums were unchanged for April and 1 weaker for May.
- Big acreage ideas hang over the corn market as the ECB folk are out planting corn and the WCB gets ready to begin in 2-3 weeks, providing favorable weather conditions.
- Spot basis firms on lack of farmer selling as the focus begins to shift to planting versus selling.
- Spreads: K/N 7 carry, N/U 4 ¼ carry, N/Z 13 ½ carry, Z/N1 23 ½ carry.
The soy complex traded on the defensive from slowed export demand and worries about declining feed needs for livestock.
- Closes: May at $8.32 ½, down 4 ½ cents, July at $8.42 ¼, down 3 ½ cents, August at $8.44 ½, down 3 ¾ cents, November at $8.51, down 3 ½ cents. The products were weaker with meal down 3-4 bucks and oil down 1 point.
- Gulf premiums were weaker earlier in the day but bounced back by the afternoon with last report 1 cent weaker form yesterday after.
- The canola market traded on the defensive form weakness in the US soy complex and softening crush margins.
- The USDA announced the sale of 120k tonnes of beans to Unknown for the current marketing year.
- Spreads: K/N 9 ¾ carry, K/X 18 ½ carry, N/Q 2 ¼ carry, N/X 8 ¾ carry, Q/X 6 ¾ carry, X/F 2 ¾ carry, X/H 7 ¼ inverse, X/N1 1 ¾ carry.
Wheat prices struggle with poor demand and potential crop losses in the Southern Plains area. Prices saw pressure from Egypt passing on US wheat in this week’s tender for HRW. Prices drew support from strength in outside markets and corn.
- May closes: Mpls at $5.06 ¾, up ½ cents, KC at $4.79 ¾, up 9 ¾ cents, Chicago at $5.33 ½, up 3 ¾ cents.
- Taiwan tenders for up to 200k tonnes of US milling wheat.
- Winter wheat conditions were unchanged last week at 62% G/E.There are concerns we could see a significant decline in conditions after this week’s freezing temperatures.
- Spring wheat planting was reported at 5% and thought to be in good shape.Plantings should pick up over the next couple of weeks as the ND farmer attempts to get in the field next week with warmer weather forecasts. Plantings are expected to be 10-12% complete through Sunday, April 19.
- Spreads: Mpls K/N 13 carry, U/Z 11 ¾ carry, K/U 23 ¾ carry (consider waiting for something more like 26 cents or better for this one (6.5/month)).