Afternoon Market Highlights


Highlights

Heavy losses in the grain markets throughout much of the session. Grain prices drew pressure from yesterday’s USDA report, decent planting progress and forecasts for rain across much of the US Midwest. US/Chinese trade meeting today on the Phase One Agreement.  Chatter today was that China may look to increase import quotas for US corn and wheat in a pledge to comply with world trade rules. 

  • The energy markets are weaker with crude oil down 42 cents at 25.36 (support is seen at 25 bucks).
  • The US$ is up 318 at 100.252, the gold market is up 11-12 bucks at 1719 and the CD$ is weaker, down 0.0033 at 0.7090.
  • DJIA lost some major ground today, down 675 at 23095 (23067-23708), S&P down 49 at 2803, NASDAQ down 223 at 8779.
  • NOPA monthly crush report on Friday: trade estimates we will have crushed 170.43 mb of beans in April. 

Corn

The corn market traded lower on fund selling after yesterday’s USDA data and rain in the forecast for the US Midwest, which should be beneficial to the newly planted crop. Prices drew additional pressure from weakness in wheat and soybeans. Spread activity was noted (buying corn/selling beans). 

  • Closes: July at $3.17 ¾, down 4 ½ cents, September at $3.22, down 4 cents, December at $3.32, down 3 ¾ cents.
  • Gulf premiums were 1-2 cents firmer for M/J/J.
  • Weekly export sales estimates are from 1.1-2.1 mmt.
  • Weekly ethanol production saw another bounce higher this week, up 19k barrels per day at 617k barrels per day. Stocks saw a nice draw, down 1.4 million barrels to 24.2 million barrels.
  • Hearing more positive things from the ethanol sector as plants start to look at coming back online and posting late summer and new crop bids once again.
  • Cool/wet weather across the Norther Plains for the balance of the week and on into the weekend should keep the farmers out of the fields until mid-week next week.
  • South Korea Feed groups continue to purchase South American corn rather than from the US, despite weaker corn futures prices.
  • Spreads: N/U 4 ¼ carry, N/Z 14 ¼ carry, U/Z 10 carry, Z/H 12 ¾ carry, Z/N 26 carry. 
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Oilseeds

Soybeans prices stumbled despite continued Chinese bean business from the US.  So today we trade yesterday’s report and rain ahead in the forecast for the newly seeded beans. SA soybeans are thought to be priced lower than US soybeans (for China) during the fall months as well as the nearby. Prices drew additional pressure as traders unwound their long bean/short corn positions. 

  • Closes: July at $8.38 ¾, down 13 ¼ cents, August at $8.40 ½, down 13 cents, November at $8.44 ¾, down 12 ¼ cents.
  • Gulf premiums were 1 cent weaker for May and June and unchanged for July.
  • Weekly export sales are estimated from 700 tmt-1.5 mmt for beans, 100-300 tmt for meal and 5-30 tmt for soyoil.
  • USDA announced the sale of 396k tonnes of beans for this and next year (196k tonnes for each.
  • Spreads: N/Q 2 carry, N/X 6 carry, Q/X 4 ¼ carry, X/F 2 carry, X/H 9 inverse, X/N 5 inverse.

Wheat

Wheat prices were in the dumps on lack of demand and ample supplies globally. It seemed like the trade was trading yesterday’s USDA report (from the 3.0 mmt increase in 2019/20 world stocks and record forecast for 2020/21 world stocks). Exports from Russia, Argentina, Australia and Canada are expected to see an increase in 2020/21 at the expense of US wheat exports. 

  • July closes: Mpls $5.08 ¼, down 12 ¾ cents, KC at $4.54 ¼, down 15 cents, Chicago at $5.01 ½, down 13 cents.
  • Weekly export sales are estimated from 250-600 tmt.
  • Paris milling wheat lower in sympathy with the US wheat market.
  • Algeria bought nearly 500k tonnes of milling wheat, which was thought to be primarily sourced from France with a possibility of some from the Black Sea Region.
  • Japan was not in this week for their routine food tender.
  • This week’s weather across the Northern Plains should slow spring wheat plantings down a bit, which were already reportedly behind last year and the 5-year average.
  • The Southern Plains are expected to benefit from this week’s rain events, although the far southwest KS area is thought to possibly miss out on the moisture.
  • Even with all the talk of the smallest acres planted in over 100 years, dryness starting out, freezing temperatures in April the USDA pegged the KS wheat crop at 310 mb and overall HRW crop at 733 mb.
  • Spreads: Mpls N/U 11 ½ carry, U/Z 13 ½ carry........Kansas City N/U 7 ¼ carry, U/Z 12 ½ carry........Chicago N/U 3 ½ carry, U/Z 10 ½ carry. The Mpls July went from a 21 ¼ cent premium to the KC July on May 4th to a 53 ¼ cent premium to KC July today. Chicago July is at a 47 cent premium to KC July.