Morning Highlights


Highlights

  • Grain and oil seed markets continue to see follow-through selling after yesterday’s sell-off.
  • As of 7:00 am: Crude oil futures are down 25¢ at $53.13 per barrel, gold is $0.60 higher an ounce at $1,240.60, US dollar $0.13 higher at 100.6300, and the DJIA up 8 points at 20,619.   
  • The bird flu virus that continues to spread across China may be worse than originally thought.  The virus has been linked to a 100 human deaths this winter alone and continues to grow.  The government is planning implementing stricter surveillance in order help slow the spread of the virus.
  • Presidents’ Day: Grain markets are closed Sunday PM and Monday. CHS Hedging will have staff in the office from 8:00 am until noon CT on Monday, February 20th to take orders. Energy markets are open until noon on Monday and will resume trading at 5:00 pm CDT. Overnight grain trading opens back up at 7:00 pm CDT.
  • We will be holding Energy Hedging classes on Thursday, March 16 in Colby, KS at the City Limits Convention Center and Wednesday, March 22 in Champaign, IL. Sign-up and the agenda will be available soon at www.chshedging.com.
  • March open interest continues to deteriorate due to liquidation and spreading ahead of first notice day.  First Notice Day is February 28.  The March Agricultural contracts expire on March 14. 

Corn

  • Iowa biofuels supporters ask that EPA nominee, Scott Pruitt, reject any changes to the RFS that is currently being advocated by billionaire, Carl Icahn. A reduction in the RFS would be a blow to the agricultural sector.
  • Corn prices still at attractive levels, but 5¢-10¢ more would increase farmer engagement.
  • Spreads; H/K 7 ¼¢ carry, K/N 7¢ carry and N/Z 11 ½¢ carry.
  • Open interest: March corn 341,505, May 533,401 and July 282,230 contracts.

Outlook:  3 to 4 cents lower following the soybean complex.

Oilseeds

  • Overnight in China the soybeans traded down 26 ¼¢, soymeal was down $7.50 and soyoil dropped 96 points.  
  • Palm oil closed down 70 ringgits to 2,859 basis the May contract. Palm oil prices are down 137 ringgits this week.
  • Palm oil futures fell to a new 12-week low overnight, pushing CBOT soybeans to 5-month lows.
  • Weather remains favorable in South America in the 1-5 day forecast.
  • Spreads: H/K 10 ¾¢ carry, K/N 8 ½¢ carry and N/X widened back out to a 38 ½¢ inverse.
  • Open interest: March soybeans 165,111, March soymeal 69,260 and March soyoil 84,348 contracts.

Outlook:  Look for the soybean to trade lower.

 Wheat

  • Warmer weather in the Southern Plains have traders on edge that winter is still not over and there is still the risk of a freeze event in the winter wheat crop.
  • The French wheat crop remains in good shape with 92 percent of soft wheat rated as good or excellent and 85 percent of durum wheat rated as good or excellent.
  • Spreads; Mpls H/K 5 ½¢ carry, Kansas City H/K 12 ¾¢ carry and Chicago H/K last traded at 13 ¼¢ carry.   
  • Open interest: March Chicago wheat: 123,850, March KC 41,519 and Mpls March 19,011 contracts. 
Outlook:  Chicago and KC wheat both lower to start the morning.  Mpls slightly higher after yesterday’s selloff.