Morning Highlights


Highlights                

  • US and China trade officials plan to meet next week in Beijing. Further trade discussions are on tap for this meeting.
  • Former Fed Chair Janet Yellen said she thinks the Fed may consider a cut in interest rates this year if global economic growth starts to slowdown. But felt the US economy otherwise was solid.
  • 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 estimate.
  • USDA export sales report today is for the week ended Dec 27th, as USDA plays catch up with the report data.
  • Barge freight remains front end firm on winter logistics.
  • Goldman Sachs index roll order flow should start up today, selling March longs and buying May.
  • U. S. Dollar index +.144 @ 96.527, Dow futures -145 @ 25,182, Crude Oil futures -.67 @ $53.36.

        

Corn

  • Weekly ethanol production was down 45k to 967,000 bpd. Ethanol stocks were at 23.95 mil barrels, down 33k. This was said to be a 1 ½ year low on production.
  • The average trade guess for Friday’s final US corn yield is 177.9 bpa, versus the Nov yield that was at 178.9 bpa.
  • Export sales for 12/27 corn were 503,000 tons.

 Outlook: lower ethanol output likely kept corn to the downside yesterday. Nothing else but waiting seemed to be the feature. Even though it was lower all day, CH19 managed to close at $3.80, above the packed range of moving averages [3.78-.79].  We will get to Friday and it still won’t be soon enough!  Calls: mixed/stead/lower

 

Oilseeds

  • A second outbreak of swine fever has been found in another Japan prefecture.10-15,000 head of hogs will be culled due to this.
  • The average trade guess for Friday’s final US bean yield is 51.8 bpa, versus the Nov yield using 52.1 bpa.
  • Export sales for 12/27 for beans were 1,051,000 tons. 

Outlook: a few more China sales came out in the daily reporting system from USDA. But beans were content to chop narrowly either side of unchanged. Bean oil was firmer, but that was about it. Producers may want to start putting in some sell orders in front of the Friday reports a bit above the market. Calls: 1-2 lower

 

 Wheat

  • The wheat spreads in Chicago and KC gave back a little ground yesterday, trading a tad weaker early on.Daily volume has been increasing this week, so the wheat story is gaining some interest it appears. WH/K traded from -1.25 back to -3.25.
  • Cash HRW export basis found some selling interest this week from hedged commercials, as narrowing spreads are squeezing out the cash carry. Some interest also surfaced for new crop paper trades and deferred positions.
  • HRS rail premiums were said to be firmer, as winter logistics have slowed due to weather.
  • Egypt’s GASC reported they have wheat stocks on hand to cover the next 3 ½ months.
  • Japan bought 131,000 tons of wheat in their weekly tender. 59k US, 37k Canadian, and 34K Australian.
  • Export sales for 12/27 all wheat were 593,000 tons.

Outlook: another really pretty quiet session. Wheat spread uncoiled a bit, so otherwise there was not much to talk about. The index roll starts up today, which may bring a bit of relief to the shorts. But each flat price break in the board seems to bring buying interest on the export sector for US wheat. But at least something is going on!  Calls: 2-4 lower