Morning Highlights


Highlights

  • The US and Japan looks to have come to a trade agreement over the weekend, which should allow for increased US products to be exported into Japan (Agriculture, industrial products and digital commerce).
  • China and the US plan for more talks, which are expected to be geared toward resolving the current trade situation.
  • The energy markets are mostly higher with crude oil trading above $54/barrel.
  • The US$ is stronger at 97.94, the gold market is 4-5 bucks higher at 1532 and the CD$ is steady to easier at 0.75165.
  • Another case of the ASF was detected in their Yunnan Province.
  • Weekly export inspections out at 10 AM CDT and crop progress/conditions out at 3 PM CDT.  

Corn

  • The corn market traded slightly higher overnight, rebounding from last Fridays’ losses. Gains were limited from last week’s crop tour results. The average yield from the crop tour was reported at 163.3 versus the latest USDA forecast of 169.5.
  • There are chances for rain across the US Midwest this week, which is expected to be beneficial to the developing corn crop.
  • Crop conditions this afternoon are expected to be steady to down 1%. The crop could use a week or two of some good heat units.
  • A possible trade deal with Japan could bring about additional opportunities for the US to export corn.
  • Spreads: Z/H 12 ¼ carry, Z/N 26 ¾ carry, N0/Z0 8 carry. 

Outlook:  higher trade on crop concerns and outside markets 

Oilseeds

  • The soybean market traded higher on results of last week’s crop tour and strength in the Chinese bean market. Gains were limited from heightened tensions between the US and China. The products were stronger with meal up 2-3 bucks and oil up 21 points.
  • Last week’s crop tour results suggests this year’s soybean crop is struggling with less than desirable weather conditions. Low pod counts were reported throughout the tour routes.Crop conditions are expected to be steady to lower.
  • Palm oil prices rose overnight on spillover strength in the Dalian. November was up 7 ringgit at 2,269 ringgit.Strength in the Dalian was said to be from the ongoing trade war between the US and China.
  • Chinese soy complex was stronger with beans up 28 ½ cents, meal up 4 bucks and soyoil up 51 points.
  • Spreads: X/F 14 ¼ carry, F/K 24 ¾ carry, X/N 49 ¾ carry. 

Outlook: higher trade on crop concerns and strength in Chinese beans overnight 

Wheat

  • The wheat market traded mixed with KC and Chicago up 2-3 cents and Mpls down a freckle.
  • The stronger US$ and lack of significant demand should keep a lid on rising prices.
  • Spring wheat harvest picked up in some areas last week, while other areas were hindered by scattered rainfall during the week.
  • Spreads: Mpls U/Z 16 carry (good time to move your shorts if you have not already done so), Kansas City U/Z 13 ¼ carry. 

Outlook: mixed trade on harvest activity and action in the row crops