Morning Highlights


Highlights

  • Significant progress on trade war issues is expected to take place during this week’s trade talks with China.
  • Weekly exports sales are expected to be released on Thursday.
  • Energy markets mostly higher, rebounding from yesterday’s losses.
  • The gold market traded higher overnight, reaching levels not seen since last May. 

Corn

  • The corn market continues to trade in narrow ranges. The March traded in a 2-cent range and is sitting 7-8 cents below its 200 Day MA of $3.88.
  • Support should stem from good demand for corn and ideas of reductions in final yield numbers.January final production numbers are expected to be released with the February 8th S&D report.
  • Spreads: H/K 8 ½ carry, N/U 2 ¼ carry, Z/H 8 ½ carry. Consider rolling short March hedges to the May at current levels. 

Outlook:  Choppy trade, taking direction from action in the wheat and bean market 

Oilseeds

  • The soybean market traded lower on concerns of heightened tensions between the US and China.Gains were also limited on improving weather conditions in Brazil.
  • Palm oil closed 33 lower, taking away what it had gained the day before on spillover weakness in US soyoil.April sits at 2,294 ringgit.
  • China beans were down 9 cents, meal was down 3.60 and oil was up 24 points.
  • Spreads: H/K 13 ¾ carry (70% of full carry), consider rolling short March hedges to the May or July at current levels. The H/N is at a 26 ½-cent carry. 

Outlook: lower trade ahead of trade war talks and renewed concerns of increased tensions between both parties 

Wheat

  • The wheat market traded slightly higher on hopes of improving demand and a slowdown in Russian wheat exports.
  • The US is said to be the lowest offer in the Egyptian tender at $243/tonne for SRW.
  • Spreads: Mpls H/K at a 2 ¾-cent carry, Kansas City H/K at a 10 ¼-cent carry. Mpls March is at a 67 ½-cent premium to KC.
  • Frigid temperatures hang over the winter wheat area the next few days, with a significant warmup over the weekend. 

Outlook: Steady, better awaiting Egyptian tender results