Afternoon Market Highlights
5/12/2020 4:19:59 PM
Today was all about what the USDA might reveal in their monthly S&D report. The market was pleasantly surprised with the lower than expected carryout for both years (2019/20 and 2020/21). Improving weather for the US, Europe and the Black Sea Region lurked over the wheat market and the soybean market seemed to losing hope for big purchases from China.
- The energy markets are mostly weaker with June crude oil able to maintain positive territory, up 1.2 at 25.34 (24.22-26.23).
- The US$ is weaker, down 234 at 100.02, the gold market is up 7-8 bucks at 1705 and the CD$ is weaker, down 0.00275 at 0.71040.
- DJIA down 457 at 23764, S&P down 84 at 2839 and NASDAQ down 190 at 9002.
The corn market opened lower on lack of fresh supportive news and rapid planting progress. Prices turned higher midday from a friendly USDA report, with ending stocks coming in below what the trade was expecting. The USDA trimmed the 2019/20 harvested acres and yield slightly, reducing total production 29 mb.
- Closes: July at $3.22 ¼, up 3 ¾ cents, September at $3.26 ¼, up 2 ¼ cents and December at $3.36 ¼, up 1 ½ cents.
- 2019/20 ending stocks were reported at 2.098 bb versus the average trade estimates of 2.224 bb.
- 2020/21 ending stocks were reported at 3.318 bb versus the average trade estimate of 3.389 bb.
- The growing season has just begun, and much can happen over the next few months, especially weather during the critical pollination period.
- Hearing much chatter about farmers looking to prevent plant their corn acres because the fields are still too wet, along with some still needing to harvest their corn before they can plant this year’s crop.
- Spreads: N/U 4 carry, U/Z 9 ¾ carry, N/Z 13 ¾ carry, Z/H 12 ¾ carry, Z/N 25 ¼ carry.
Soybeans traded lower on increased ending stocks for 2019/20, despite more business to China overnight. Talks is that China will look to a more aggressive buyer of US beans come the next marketing year rather than the current one. It is thought that their interest lies more for the fall and winter months (Aug -Jan).
- Closes: July at $8.52 ¼, down 3 cents, August at $8.53 ¾, down 2 cents and November at $8.57, down 1 ½ cents. The products were mixed with meal up 2-3 bucks and oil down 25 points.
- The USDA announced the sale of 136k tonnes of beans to China for the current marketing year.
- 2019/20 ending stocks were raised 100 mb to 580 mb form a like reduction in exports.
- Spreads: N/Q 1 ¾ carry, N/X 4 ¾ carry, Q/X 3 ¼ carry, X/F 1 ¼ carry, X/H 13 ½ inverse, X/N 10 ¾ inverse.
The wheat market was mixed with Mpls higher and KC and Chicago lower. Mpls garnered strength from slowed planting progress. Chicago was on the defensive from improving weather conditions and slowing demand for wheat.
- July closes: Mpls at $5.21, up 2 ¼ cents, KC at $4.68 ¾, down 6 ¼ cents, Chicago at $5.14 ¼, down 3 cents.
- Paris milling wheat was lower on increased moisture for Europe.
- World stocks for 2019/20 were reported at 295 mmt up from 293 mmt previously. 2020/21 world stocks were reported at 310.12 mmt, above the average trade estimate of 293 mmt.
- HRW crop was estimated at 733 mb versus the average trade estimate of 739 mb. SRW was reported at 298 mb versus the average trade estimate of 280 mb.
- The Southern Plains have seen rain events this week, but the southwest part of KS have missed much of the moisture.
- Spreads: Mpls N/U 10 ½ carry, Kansas City N/U 7 ¼ carry, Chicago N/U 3 ¼ carry.