Afternoon Market Highlights
4/30/2020 3:03:32 PM
A nice bounce was seen in the grain markets on decent weekly export sales across the board and Chinese buying optimism. The US is re-opening and folks are beginning to move around utilizing gasoline, which could hopefully resume operation at some of the ethanol plants around the states (slow going at that).
- The energy markets are stronger with June crude oil up 3.95 at 19.02/barrel.
- The US$ is weaker, down 559 at 99.005, the gold market is down 17-18 bucks at 1696 and the CD$ is down 0.00125 at 0.71835.
- DJIA down 301 at 24310, S&P down 44 at 2896 and NASDAQ down 54 at 8860.
The corn market drew strength from strong weekly exports despite rapid planting. Gains were limited from the collapse in the ethanol market. The international Grains Council forecasts the 2020/21 world corn production at 1.158 billion bushels, up from their previous estimate of 1.157 billion bushels.
- Closes: July at $3.19 ¼, up 4 ¾ cents, September at $3.25 ¾, up 3 ¾ cents,
- Weekly export sales were decent at 1.4 mmt. YTD we are at 84% of our target. This week’s top destinations were Mexico, Japan, Korea.YTD top destinations are Mexico, Japan, Columbia.
- Planting progress is going well this week, ideas are that the US will be at 50% planted by Monday. Some of the corn is said to be popping up above ground to soak up those rays of sunshine out there.
- Hand sanitizer being made by ethanol plants have been stifled by the Trump Administration from tightening restrictions on the use of ethanol to make hand sanitizer.
- Spreads: N/U 6 ½ carry, N/Z 17 ¼ carry, Z/H 13 carry, Z/N 25 ½ carry.
The soybean market was stronger on decent exports, increased Chinese buying of US soybeans for the fall and a bout of end of month position squaring. Chatter today was that China may be looking to replenish their state reserve stockpiles and honor their Phase One Trade Agreement.
- Closes: July at $8.55 ½, up 18 cents, August at $8.55 ¾, up 17 ¼ cents, November at $8.57 ¾, up 13 ½ cents. The products were higher with meal up 6-7 bucks and oil up 45 points.
- Weekly export sales were decent at 1.1 mmt, 81% of the yearly target. This week’s top destinations were China, Egypt and Indonesia. YTD top destinations are China, Mexico and Egypt.
- Planting progress is zooming along with the US expected to be near 25-30% planted by Monday.
- Reports are that China has bought a bunch of US beans (nearly 300k tonnes and mostly from the Gulf not the PNW) for Aug/Sep.
- Spreads: N/Q ½ carry, N/X 2 ½ carry, Q/X 1 ¾ carry, X/F 1 ¾ carry, X/H 8 ½ inverse, X/N 2 ½ inverse.
The wheat market turned higher on strength in the row crops, bargain buying at six-week lows and decent weekly export sales. Additional support stems from concerns of crop losses in the US winter wheat along with that of Russia and Ukraine.
- July closes: Mpls at $5.15 ½, up 8 cents, KC at $4.87 ½, up 10 ½, Chicago at $5.23 ½, up 7 cents.
- International Grains Council estimates 2020/21 world wheat production at 764 mmt, down from 768 mmt previously. This compares to 762 mmt in 2019/20.
- Russia and Ukraine 2020/21 production expected to be reduced from extended dryness and reductions in planted area.
- There is a fair amount of uncertainty as to how much damage was done to the HRW crop and how much crop loss can be expected.
- Spring wheat planting is off to a great start this week with ideas we could see planting progress near 30-35% complete by Monday.
- There were 9 deliveries posted against the May contract in Chicago, zero contract in KC and 238 contracts in Mpls.
- Spreads: Mpls N/U 10 ½ carry, U/Z 12 ¾ carry, Kansas City N/U 7 carry.