Morning Highlights


Highlights

  • U.S. energy and equity markets are taking a pause as tensions in the Middle East recede. At last WTI February futures are trading down $0.45 at 62.82 per barrel and S@P futures are 3.0 pts higher at 3,245.50 pts.
  • Fires continue to burn in Australian with rains and cooler temperatures continue to aid firefighters over the next 10 days. The fires have burned nearly 15 million acres. 2019 was the hottest and driest year on record for many areas in Australia.
  • ADM is selling their Palm oil business and assets to a local group. The transaction is expected to be completes within a few weeks.
  • CHS Hedging will be holding an energy hedging class in Inver Grove Heights, MN on January 23. The Agenda and sign-up can be found at chshedging.com. 

Corn

  • EMATER estimates 54% of the corn in Rio Grande Do Sul is at the mature/fill stage and 1% has been harvested.
  • Late yesterday the CFTC released their latest Commitment of Traders report. The report showed at of 12/31/2019, managed money was short 82,456 lots short.
  • Dr. Michael Cordonnier lowered his Brazilian corn estimated 1.0 MMT to 101.0 MMT citing hot and dry weather. He left his Argentine corn estimated unchanged at 47.5 MMT.
  • At the Dalian exchange overnight corn fell 2 ½¢.
  • Funds are estimated to be short 84,900 contracts futures and options combined as of 12/31/2019.
  • China’s corn market was up 3 ¼¢ overnight.
  • Spreads: H/K 6 ½ carry, H/N 12 ½ carry, N/Z 2 carry. 

Outlook:  Prices expected to be range bound with a negative bias ahead of Fridays reports.  

Oilseeds

  • Deliveries: Soybeans 90, Soymeal 843, and Soyoil 312 contracts.
  • The latest COT report showed managed money to be short only 3,159 soybeans and 25,410 soymeal futures and options contracts combined. Managed money remains long 112,183 contracts of soyoil.
  • Dr. Michael Cordonnier lowered his soybean estimate 1.0 MMT to 122.0 MMT. Excessive rains in November stymied planting while a lack of moisture in December has had a negative effect on growth potential.
  • Palm oil futures were unchanged overnight at 3,042.
  • India has informally asked palm oil refiners to circumvent Malaysian palm oil purchases due to their criticism of India political actions in the Kashmir region.
  • China markets were mixed overnight at the Dalian exchange. Soybeans rose 14¢, soymeal down $0.10, soyoil 21 points lower.
  • Spreads: H/K 13 ¾ carry, H/N 26 carry, N/X 4 ¼ carry, X/F 4 ¾ carry. 

Outlook: Futures are trading slightly lower ahead of Fridays reports.  

Wheat

  • The Russian and Ukraine markets are likely to be slow this week due to the Orthodox Christmas that runs through today
  • The latest COT report showed funds long 27,270 contract of Chicago wheat and 1,284 contact of KC wheat. Funds have cut their Mpls wheat short position to 8,416 contracts.
  • Spreads: Mpls H/K 10 carry, Kansas City H/K 7 ¾ carry, Chicago H/K 6 ½ carry. 

Outlook: 1-4¢ lower to start the day. Tensions in the middle east are easing but remain and continue to weight on futures.