Morning Highlights


Highlights

  • The Euro is at a 3 week high ahead of the first round of the French Presidential election on Sunday, April 23. OpinionWay shows Emmanuel Macron in the lead, but at just 23%, with all four candidates separated by less than 4% of the vote. If no candidate wins a majority, a run-off election between the top two will be held on May 7.
  • China’s government announced they will cut their value-added tax on farm and natural gas products from 13% to 11%, in an effort to aid economic growth.
  • May options expire this Friday, April 21, 2017. Strikes with highest open interest are $3.60 and $3.70 for corn, and $10.00 and $9.80 for soybeans.
  • As of 7:00 am CT, crude oil is up 39 cents to $50.83/barrel, gold is down $2.80 at $1278.60, DOW up 29 to 20364, dollar index is down 192, and Euro is up 240 pts.

Corn

  • Weekly corn export sales totaled 756.4 MT for 2016/17 vs 700-1000 MT estimate, with an additional 91.8 MT for 2017/18.
  • Updated forecasts show a strong ridge from the KS/MO border up to WI/Great Lakes in the 6-10 day period, with the upper Midwest much drier and OK, MO, and IL much wetter.
  • The North Carolina feed market is set to import is first cargo of corn from Paraguay since 2015, arriving next month.
  • Weekly ethanol production was surprisingly up 7k barrels/day to 993k vs 939k last year. Production now needs to average less than 1% above year ago levels to meet USDA’s projected usage. Ethanol stocks were up 5 million gallons to 967 million vs 926 million last year.
  • Cattle on feed estimates for Friday afternoon’s report are as follows: on feed 99.7%, placed 106.5%, marketed 109.4%.

Outlook: Open interest was down 17.1k contracts yesterday, as traders are exiting or rolling May positions, which should be supportive with funds covering some of their 160k short position. May corn is challenging its 200 day moving average again this morning.


Oilseeds

  • Weekly soybean export sales were on the low end at 211 MT for 2016/17 vs 300-500 MT and 14 MT for 2017/18 vs 100-300 MT estimates. Meal sales were 135 MT vs 50-200 MT old and 0.10 vs 0-150 MT new crop estimates.
  • Argentina’s central bank may raise its cash reserves from 10% to 15%, which would devalue the Argentine peso. Fear of the currency continuing to fall may encourage farmer selling.
  • Chinese Dalian soybeans were up 9 points overnight, still down 44 ¾ on the week, while soymeal was up 3.10 and soyoil up 1 point. Malaysian palm futures were up 39 points, although weekly export sales were down 1% from last year.

Outlook: Still trading sideways, with open interest down 14.9k contracts, similar to corn. Weak export sales, although still in line to meet USDA projections.

Wheat

  • Weekly wheat export sales were stong at 414 MT vs 250-450 MT old and 137.2 MT vs 100-300 MT new crop estimates.
  • The Buenos Aires Grain Exchange estimates Argentina's 2017/18 wheat crop at 17.5 million metric tons, up from 16.3 MMT the previous year, which could result in an additional 1-2 MMT in exports.
  • Stats Canada will release 2017 acreage estimates Friday, with all wheat projected at 22.4 million hectares, down from 23.2 million last year, corn at 3.2 million ha vs 3.32 last year, and barley 6.0 million vs 6.39 last year.

Outlook: Traders believe some HRW export business may have been done yesterday, and the lower dollar will help us stay competitive.