Morning Highlights


 

Highlights

  • Hurricane Florence, now a category 1, sees its eyewall making landfall on the North Carolina coast.

  • Energy markets are mixed, with Nymex crude oil trading 30 cents better, heating oil is higher and RBOB is weaker. The US$ is weaker and DOW futures are firm.

  • September grain futures contracts expire today at noon, CDT. 

Corn

  • The corn market sees a small bounce to prices after setting new contract lows for many contracts yesterday. CZ breached the $3.50 level yesterday but has spent the overnight session trading above that level. Overnight saw relatively light trade volumes.

  • Larger than expected US yield estimate, combined with signs that maybe demand is slowing, keeps upside momentum muted.

  • US weather appears favorable for harvest with many areas expected to be warm and dry, aiding in field drydown.

  • Managed money continues to add to their short positions, currently carrying an estimated net short of about 93,000 contracts.

  • Deliveries of 41 contracts overnight against the CU headed into the last trading day.

  • Spreads trade is quiet: Z/H last trading at a 12 ¼ cent carry and Z/K at a 20 ½ cent carry. 

Outlook:  Slightly higher with little fresh news and a poor technical outlook.  

Oilseeds

  • The soybean market is higher in overnight trading, and remains well off the recent contract lows.

  • Fresh news is limited as the projected 845 mb carryout currently leads the fundamental outlook to be negative.

  • US weather should allow harvest to increase as we move forward over the next few weeks, adding to the supply available to the US crusher. A slow export program will push beans into storage.

  • Malaysian palm oil was down 21 ringgit in overnight trade.

  • Spread trade is quiet: X/F 13 ½ cent carry, X/H 26 ¼  and X/K 39 ¼ cent carry. Cash remains weak with poor export demand. 

  • Deliveries of 33 contracts of beans, 282 soyoil and 11 contracts of soymeal. 

Outlook: Trading higher and no apparent progress on US/China trade relations. 

Wheat

  • The wheat market trades higher and continues to be choppy with not much fresh news to trade.

  • There is talk that Russia phyto-sanitary agreements/requirements may slow Russia exports.

  • The world still has a few remaining issues, with uncertain Australia production and declining EU production. Argentina’s economic and export tax situations also lead to uncertainty about their ability to export.

  • Iraq tenders for 50 tmt  US, Canada or Australian wheat.

  • Deliveries: 2 contracts Chicago SRW, 7 contracts Chicago HRW, 27 MGEx.

  • Spreads are lightly mixed: MWZ/H is trading at a 16 cent carry, KWZ/H is 21 ½ cent carry and the WZ/H is trading at a 21 cent carry.  

Outlook: Higher trade as support comes from the world scenario.