Afternoon Market Highlights
5/22/2020 2:41:31 PM
Quiet grain markets ahead of the long holiday weekend. Farmers are busy in the field, pushing hard to get the crops in ahead of this weekend’s rain events. The grains were mostly lower on lack of fresh supportive news along with a bout of pre-weekend positioning.
- Markets closed Sunday evening and Monday in observance of the Memorial Day Holiday. Trade resumes Monday evening at 7 PM Chicago Time.
- Cattle on Feed report out today at 2 PM CDT: On Feed May 1 at 95% versus trade estimate of 95.1 % (94-96), April placements at 78% versus trade estimate of 77.4% (71.8-86.7) and April marketings at 76% versus 75.1% (70-82.7).
- The energy markets are mostly weaker with crude oil down 62 at 33.30/barrel.
- The US$ is up 405 at 99.79, the gold market is up 12 bucks at 1733, the CD$ is down 0.0026 at 0.7144.
- DJIA down 29 at 24444 (24294-24470), S&P up 3-4 at 2941, the NASDAQ up 32 at 9317.
Corn prices were weaker all day on lack of fresh supportive news and weakness in the wheat market. The crop is mostly planted with a good share of it up already. While there have been some pretty heavy rains in the ECB this past week, it seems pretty tough for prices to rally much as much of the market sentiment has been “Rain Makes Grain”. Tough to believe this year would be any different.
- Closes: July at $3.17 ½, down ¼ cent, September at $3.22 ¼, down ¾ cent, December at $3.31 ¾ down 1 ¼ cents.
- Planting progress expected to be near 90-95% complete versus 80% last week.
- There has been some chatter about China returning to the market for a sizable chunk of US corn, although there has been no sign of them showing any interest so far.
- China was said to be making plans to auction off nearly 4.0 mmt of their state reserves next week (May 28th). Possibly this is in preparation of replenishing stocks with this year’s crop (that is expected to be of much better quality than last year).
- The crop conditions report should begin June 1st with estimates of the crop being reported between 73-77% G/E.
- Spreads: N/U 4 ¾ carry, N/Z 14 ½ carry, U/Z 9 ¾ carry, Z/H 12 ½ carry, Z/N 25 ¼ carry.
Soybean prices traded both sides in thin trade ahead of the long weekend. Fresh supportive news is lacking. The crude oil market was weaker with weakness rolling over to the soy complex. China buying has been chattered about most of the week, although there was very little sign of them having interest in US soybeans this week. Prices drew additional pressure from mostly favorable weather for the fresh new plants to germinate and pop up above ground to soak up a bit of sunshine. The canola market was lower on a bout of technical selling and improving conditions for getting the canola crop planted.
- Closes: July at $8.33 ¼, down 1 ¾ cents, August at $8.37, down 1 ½ cents, November at $8.44, down 1 ½ cents.
- CIF premiums were mostly unchanged.
- The products were mixed with soymeal up 1-2 bucks with the emergence of the bargain hunters after hitting contract lows.
- Soyoil was down 44 points, after seeing pressure from the weakness in the energy markets. Support is near the 50-Day MA.
- Planting progress expected to be near 60-65% complete versus 53% last Monday.
- Spreads: N/Q 3 carry, N/X 10 ¾ carry, Q/X 7 ¾ carry, X/F 3 ¾ carry, X/H ¾ inverse (after dipping to ¼ carry earlier in the session), X/N 8 ¼ carry.
The wheat market suffers from plentiful supplies, lack of demand and a bout of pre-holiday profit taking. This week’s virtual HRW tour pegged the Kansas wheat crop at 284.4 mb with an average yield of 44.5 bushels per acre (USDA at 306 mb and 47.0 bpa). ND made some real progress planting spring wheat this week as weather was mostly favorable. Prices drew additional pressure from this week’s rain events across the US southern Plains.
- July closes:Mpls at $5.13, down 5 cents, Kc at $4.44 ½, down 10 cents, Chicago at $5.08 ¾, down 7 ¼ cents.
- EU wheat prices traded lower as this week’s rain forecasts create thought of improving yields in some parts. Russia and Ukraine still see dryness in their southern parts.
- Japan bought 111k tonnes of wheat for July (6k spring wheat and 41k HRW and 20k White).
- Planting progress is estimated at 80-85% complete come Monday (ND at 55-60).
- Winter wheat conditions were 52% G/E last week. Would guess they come in unchanged or slightly better from this week’s rain events across the US Southern Plains.
- Spreads: Mpls N/U 11 carry, N/N 49 ¾ carry, U/Z 13 ½ carry.......Kansas City N/U 7 carry, N/N 40 ½ carry, U/Z 12 ¼ carry......Chicago N/U 4 carry, U/Z 8 ¾ carry.