Morning Highlights


Highlights

  • President Trump signed an executive order yesterday to impose sanctions on Turkey in response to them entering northern Syria. Included in the order is an increase of steel tariffs to 50% and an immediate stop to trade negotiations on a $100 billion deal with Turkey.
  • Agriculture commodities are modestly lower this morning across the board as things with China on trade have simmered and will take time to get phase one agreed upon. Most commodities have also had sizable rallies and may be running out of steam for the time being.
  • Outside markets as of 7:00 AM Central: November crude oil is down $0.38 at $53.20; Dow futures up 78 points; U.S. Dollar is up 0.080 at 98.250.
  • The USDA will release the Crop Progress report this afternoon at 3:00 pm CT, postponed a day due to Columbus Day.

 Corn

  • Futures were weaker overnight led by the December, down around 4 cents but still above yesterday’s lows. Lack of fresh news regarding weather, crop reports, and China trade deal on top of a nice run higher make corn susceptible to a pullback.
  • It will take time before the market can get an idea of how much damage has been done by snow and freezing temperatures over the weekend but the idea that some damage has been done should provide support.
  • Crop progress is expected to show harvest around 22% complete vs. 15% last week and the 5-year average of 35%.
  • The corn maturity in the crop progress report is a point of interest for the market as it looks to get a better idea of where the crop was at when the freezing temperatures hit.
  • Spreads: Z/H 10 cent carry; Z/K 15 ¾ cent carry; Z/N 19 ¾ cent carry.

 Outlook:  Lower, lack of fresh news giving a week market tone.

 Oilseeds

  • Soybeans were lower on a China and US needing more talks and time to get phase one of the trade deal figured out.
  • Crop progress is expected to show harvest around 25% complete vs. 14% last week and the 5-year average of 49%.
  • NOPA crush is out today at 11:00 am CT with the market expecting crush at 162.2 million bushels for September vs. 160.8 million last year.
  • Brazil soybean planting is slightly behind average with the planting pace at 11% vs. 20% last year and the average of 12% according to AgRural. Dry weather in the center of the country is causing the delay. Delayed soybean planting in that center part of the country could mean safrinha corn will get planted late as well in early 2020, making itself susceptible to dry conditions due to the end of the rainy season sometime in May.
  • Chinese soybeans were up 4 ½ cents at 3,430 yuan per ton. Soymeal was up 0.90 at 2,975 and soyoil was down 26 at 5,918. Malaysian Palm oil was up 16 ringgits at 2,173.
  • Spreads: X/F 14 ¼ cent carry; X/H 24 ¾ cent carry; X/N 40 ¾ cent carry.

 Outlook: Lower, China putting a damper on a trade deal being made spurring weakness in the market.

 Wheat

  • Wheat was lower across the board this morning, but the global prices have come back up strong with EU matif wheat and Black Sea wheat climbing.
  • Crop progress report out tonight is likely to show little harvest progress on spring wheat for Montana and North Dakota and what’s remaining likely won’t get harvested at all. Winter wheat planting progress will be included as well.
  • Turkey tendered to buy 127,500 metric tonnes of durum from the EU and 190,000 metric tonnes of milling wheat from the EU.
  • APK Inform in Ukraine raised its wheat forecast to 27.9 MMT and increased the export forecast to 18.6 MMT.
  • Spreads: Chicago Z/H 6 ½ cent carry; Kansas City Z/H 12 ¼ cent carry; Minneapolis Z/H 14 ¼ cent carry.

 Outlook: Lower, lack of fresh news providing some weakness.