Morning Highlights


Highlights                

  • Markets were full of chatter on Friday about China purchases, or intensions to buy US beans, and maybe corn and wheat and ethanol. Early upside strength in beans did fizzle out towards the close, but wheat values held late gains better.
  • The CFTC did release on Friday the commitments data for the period ending Dec 24th.Another update is scheduled for Tuesday that will cover the following week period [Dec 31st ].This data is mostly outdated at this time.
  • USDA will release the regular Feb S&D report this Friday 2/8/19 along with the delayed January reports, including the Dec quarterly stocks report, and winter wheat planting intentions, and final corn/bean production yield estimates.
  • A big round of snow blew across the Dakotas and northern states, while milder temps spread across the Midwest, breaking the frigid cold spell.
  • Asian markets are closed for Lunar New Year.
  • U. S. Dollar index +.090 @ 96.707, Dow futures +27 @ 25,023, Crude Oil futures -.23 @ $55.05.

        

Corn

  • Mato Grosso second crop corn planting is estimated near 30% complete by IMEA.
  • CH/K spread at -8.75.

 Outlook: corn was higher, but quietly put in an inside trade session on Friday. For the week it pretty much stayed side-ways. Overnight values sitting mostly unchanged.  Calls: steady/flat

 

Oilseeds

  • SH19 had a strong start on Friday, and did manage to hold above the 10 day moving average. However, the close was nowhere close to the early price action.
  • Farmer selling was noted on the strong early bean price action Friday.
  • SH/K spread at -14.
  • Brazilian FOB bean basis was down a nickel or more on Friday, reflecting interest switching to US origin supplies.

Outlook: headlines from Friday had China buying 1.0 million or more tons of US beans. Traders confirmed the inquiries, but we’ll see if USDA puts out 24 hour daily sales notices concerning this today. The rumor mill had up to 5 mil tons additional in play? So the wire stories at the end of the day took on a little disappointed tone. Other reports this morning saying COFCO and Sinograin each bought 1.0 mil tons for April-June.  Calls: steady/mixed

 

 Wheat

  • Stats Canada will release wheat, canola, and barley Dec 31st stocks estimate on Tuesday Feb 5th.
  • SRW CIF barge basis firmed on Friday, bids for Feb/Mar pushed to +94H.WH/K spread was trading in to -3 ½, while KWH/K settled at -8.5.TX gulf HRW bids were also better on Friday.
  • Pakistan is offering to sell wheat in an export tender this week.

Outlook: something was cooking in the SRW cash markets last week, as CIF SRW basis popped from mid-80’s WH to bids around +94H. Whether this is covering new business or logistics, it will be interesting to see. Spreads firmed as well. Helping in the wheat business mix has been cheaper ocean freight, allowing US FOB values to gain competitiveness. Calls: 1-2 lower