Afternoon Market Highlights
5/5/2020 3:52:32 PM
The grain markets garnered some strength from the energy and equity markets. Gains were limited from decent planting progress in the row crops and crop concerns for the US winter wheat, Europe and the Black Sea Region.
- StatsCan Acreage and stocks report to be released on Thursday morning.
- The energy markets are stronger with June crude oil up 4.49 at 24.90 (21.13-25.10).
- The US$ is stronger, up 336 at 99.85, the gold market is 1-2 bucks stronger at 1715 and the CD$ is a freckle higher at 0.7117.
- DJIA up 133 at 23883, S&P up 32 at 2857 and NASDAQ up 98 at 8809.
The corn market caught a bid on borrowed strength in the crude oil market. Prices drew underlying support from hopes of increased use of corn-based ethanol as the US reopens and folks start driving around more like they used to (prior to the stay at home situation back in March). Gains were limited from this year’s rapid planting progress.
- Closes: July at $3.17 ¼, up 1 ¾ cents, September at $3.23 ½, up 1 cents and December at $3.34 ½, up ½ cent.
- Gulf premiums started out firmer but lost ground as the day wore on.May 2-3 cents weaker, June 1 cent weaker and July 1 cent weaker to 2 cents firmer.
- The USD announced the sale of 109k tonnes of corn to Mexico (45k for this year and 64k for next year).
- Spreads: N/U 6 carry, N/Z 17 carry, Z/N1 26 ¾ carry.
The soybean market traded higher from strength in the energy markets and Chinese soybean purchases. Decent plantings kept a lid on gains, along with ideas of losses to the use of meal in livestock rations.
- Closes: July at $8.38 ½, up 2 cents, August at $8.39 ¾, up 1 ¼ cents and November at $8.45 ½, down ¼ cent. The products were higher with meal up 70 cents and oil up 11 points.
- Gulf premiums were steady for May/June/July.
- The USDA announced the sale of 378k tonnes of beans to China (136k for this year and 242k for next year).
- The canola market trade slightly higher on borrowed strength in the US soy complex. 20/21 acreage is estimated at 21.1 million acres versus 20.95 million acres in 2019.
- Spreads: N/Q 1 ¼ carry, N/X 7 carry, Q/X 5 ¾ carry, X/F 3 carry, X/H 8 ½ inverse, X/N 2 ¾ inverse.
The wheat market traded both sides, weighing spring wheat plantings against freeze damage in the winter wheat crop. Prices drew underlying support from dryness in the US Southern Plains and long-term dryness in Europe and the Black Sea Region.
- July closes: Mpls at $5.10 ¼, up 2 cents, KC at $4.82 ¼, down 4 ¾ carry, Chicago at $5.19 ½, unchanged.
- Spring wheat plantings were reportedly behind last year and the 5-year average. Could be a tough one for planting progress in the Northern Plaines with this week’s cool temperatures and recent shots or moisture.
- This week’s forecast for cold and frigid temperatures across the US raises concerns of possible freeze damage to the SRW crop.
- Ukraine looks to cap wheat exports by July in hopes for a balance between foreign currency earnings and food security.
- Russia and Ukraine are expected to receive beneficial rains this week.
- Argentina’s wheat plantings are off to a good start with total production estimated at 20.1 mmt as reported by the BA Grain Exchange.
- Oklahoma’s winter wheat harvest is estimated at 96.5 million bushels with an average yield of 33.16 bushels per acre.
- Spreads: Mpls N/U 11 carry, N/N1 54 ¾ carry (4.6 cents a month), U/Z 13 ¾ carry.........Kansas City N/U 6 ¾ carry, N/N 31 ½ carry, U/Z 11 carry.