Afternoon Market Highlights
4/24/2020 2:30:04 PM
Lots of activity across the countryside with both harvesting and planting corn. Spring wheat planting is underway as well. The farmer is totally disengaged in the idea of selling anthing at this juncture. The current virus situation lurks overhead of most commodities with weakness stemming from demand destruction. More ethanol plants go idle in the WCB. Mixed emotions about how and when the US gets reopened and back running with folks getting back to the workplace.
- The energy markets are mixed with June crude oil up 64 cents at $17.14/barrel (15.64-17.97).
- The US$ down slightly at 100.345, the gold market is down 5-6 bucks at $1,728/ounce, the CD$ is down 0.00315 at 0.70900.
- DJIA up 193 at 23709 (making a slow crawl back to better levels), S&P up 38 at 2818, NASDAQ up 99 at 8594.
- Next week we have end of month positioning and First Notice Day for May futures.
- Check your open deck for orders that can be canceled.
- The next USDA report is scheduled for May 12 at 11 AM (updated US and world balance sheets).
The corn market was on the defensive from decent planting progress and poor demand from the ethanol arena form lack of gasoline demand as folks continue staying at home. The USDA increased carryout for 2018/19 and 2019/20 which sit at 2.221 bb and 2.092 bb respectively. There could very well be another increase in the May report from declines in ethanol and feed.
- Closes: May at $3.15 ¾, down 3 ½ cents, July at $ 3.23, down 3 cents, September at $3.27 ½, down 2 ¼ cents, December at $3.36 ¾, down 2 cents.
- July sits a few cents below its 10-Day MA of $3.26 ½ and failed to hold at the day’s high of $3.27 ¾. Dec 21 at $3.63 ¾ is not a bad place to start selling given our current situation.
- The USDA announced the sale of corn to Mexico for this and next year 589k tonnes = 370k for the current marketing year and 220k tonnes for next year).
- Spreads: K/N 7 ¼ carry, N/U 4 carry, N/Z 13 ½ carry, Z/N1 23 ½ carry.
The soy complex traded on the defensive from a bout of profit taking, despite another round of export business for US soybeans. Planting progress is moving right along as some folks finish up their corn planting. Some farmers are willing to take a chance on planting beans in the cooler soils (they remember all too well what happened when the rains came last spring).
- Closes: May at $8.32 ¼, down 7 cents, July at $8.39 ½, down 7 ¼ cents, August at $8.40, down 7 cents, November at $8.41 ½, down 6 ½ cents. The products were weaker with meal down a buck and oil down 56 points.
- Soybean plantings were reported at 2% last week with expectations for progress to be near 5-10% complete by next week.
- The USDA announced bean sales to China and Mexico.China has been buyers of US beans for the past three days.
- The canola market traded lower in sympathy with the US soy complex, strength in the CD$ and ample supplies of canola. Canola harvest is sad to be taking place in Canada.
- Spreads: K/N 7 ¼ carry, N/Q ¾ carry, N/X 3 ¼ carry, Q/X 2 carry, X/F ¾ carry, X/FH 12 inverse, X/N1 6 ¾ inverse.
The wheat market stumbled on a bout of profit taking. Improving conditions for EU, the Black Sea Region and rain forecasts for the Southern Plains area over the weekend. Demand destruction has been noted and weak export demand is seen to be keeping a lid on prices. Mpls drew additional pressure from improving weather conditions for spring wheat planting in the Northern Plains.
- May closes: Mpls breaks $5 with a close at $4.99, down 6 ½ cents, KC at $4.75, down 10 ½ cents, Chicago at $5.26 ¾, down 20 ½ cents.
- Some of the later planted crop is expected to benefit from this weekend’s rain events.
- Spring wheat planting was reported at 7% complete last week.With forecasts for this and next week across the Northern Plains, spring wheat planting is expected to pick up.Planting progress is seen at 10-20% complete through Sunday, April 26, 2020.
- Winter wheat conditions are mixed with some ideas we will see anther reduction in G/E as more of the wheat crop gets a looksee, while rain events are expected to improve some of the crop that was planted later.
- Crop conditions were reported at 57% G/E last week with KS at 46% G/E.
- Trade awaits word on the Saudi Arabian 655k tonne tender; to see if the US winter wheat is priced competitively enough to get the business or some of the business.
- Spreads: Mpls K/N 14 carry, U/Z 13 ½ carry, Kansas City K/N 8 ¾ carry, U/Z 10 ¼ carry, Chicago K/N 3 ¼ carry.