Morning Highlights


Highlights                

  • There was talk that US tariffs would be implemented/announced this Friday on China, which gave markets a negative tone yesterday. Pres. Trump will meet with advisors today considering the tariff situation.
  • China issued a new cotton import quota of 800,000 metric tons.
  • US weather forecasts next 6-10 days remain non-threatening.  Rains showing up over much of Iowa this morning.
  • U. S. Dollar index +.056 @ 93.594, Dow Futures +40 @ 25,223, Crude Oil futures +.24 @ $66.88.

        

Corn

  • Western corn belt basis levels remain firm.
  • Weekly ethanol production in the US was up 12k bpd to 1.053 mil barrels per day. This was also 5% above last year’s same week production.Ethanol stocks were up slightly to 22.174 mil barrels. It was also noted that weekly gasoline demand was up 6.6% above last year’s same week.
  • USDA weekly export sales 936,000 tons old crop, 240,000 tons new crop.
  • Informa put their corn planted acreage estimate at 88.7 mil acres.

 Outlook: negative trade issues blanketed the corn market yesterday and overnight. Bean collapse drug corn along to the downside. Since the post-report rally earlier this week, Dec corn remains under $4.00 and has not been able to scrape together a close above that level. To buck the trend of the weekly chart, Dec corn needs to see this by Friday. Calls: 3-4 lower to start.      

 

Oilseeds

  • Bean markets dragged lower by negative meal chart action yesterday morning. July meal traded into and filled the ‘gap’ from back in Feb at $351.60-$348.50. But gaps remain in the Aug and Sept meal charts. Speculative funds had been longer in meal than in beans for a time.
  • USDA weekly export sales beans 519,000 tons old crop, 291,000 new crop. Meal 74,000 tons, with 23,000 new crop.
  • NOPA May bean crush will be out Friday morning. Trade expects it to come in between 163-164 mil bu.
  • Brazilian bean export lineup is said to be 8.3 mil tons, versus a last year estimate around 5.8 mil tons.
  • Informa put their corn planted acreage estimate at 89.9 mil acres.

Outlook: tariff headlines and negative chart action in bean meal took a toll on the bean bulls yesterday. Spec funds in beans could be close to even or a little net short now, but the die-hard spec bulls were still long about 50,000 meal and this weighed on the market as well. Add to all this a continued weaker Argentine Peso, and there was nothing to hold beans. The market tried to rally a few times during the session, but fell back to the lows at the close.  Calls: mixed to -2 cents.

 

 Wheat

  • Australian wheat planting outlook remains ‘parched’, as some weather followers indicating it is the driest autumn since 1902. ABARE forecasts wheat plantings to be down 10%, and much of what is planted is having difficulty sprouting due to dry conditions.
  • USDA weekly export sales all wheat 302,000 tons. By class: HRW 134k, SRW 9k, HRS 71k, SWW 88k. 
  • KC HRW spot basis was back higher yesterday:ords unch @ +111N, 11% unch @ +124N, 12% +8 @ +160N, 13% +15 @ +175N.
  • Informa put their HRS planted acreage estimate at 12.177 mil acres, down from 12.4 mil last month.
  • Strategie Grains lowers its EU soft wheat production forecast 1% to 139.9 mil tons.
  • Iraq was said to buy 100,000 tons of Australian milling wheat at $313.75/ C&F in their tender this week.US wheat had been offered $29/ton higher.

 

Outlook: southern HRW farmers are seeing a much better basis and higher board flat price for the crop this year than last, but half the bushels if that to play with. And the commercials have plenty of space available to hold this crop and wide board spreads.  Calls: 7-9 lower