Morning Highlights


Highlights

  • The U.S. and Iran tensions continue to dwindle with both sides saying they are not seeking a war. Many experts are saying Iran would not be able to afford a war due to their weak economy. Years of international sanctions have crippled Iran’s economy.
  • China’s Vice Premier Lui will be in Washington next week to sign U.S. trade deal.
  • U.S. regular retail gasoline prices averaged $2.60 per gallon in 2019, down 11¢/gal from 2018.
  • The USDA’s Export Sales Report will be published at 8:30 a.m. EST on Friday, Jan. 10, instead of today, due to the weather-related closure of federal offices on the afternoon of Jan. 7.
  • Estimates for the monthly USDA Grain stocks, Crop production and Supply and Demand reports can be seen at the bottom of the newsletter.

 

Corn

  • The EIA reported ethanol production decreased by 4,000 bpd this week to 1,062,000 bpd. Ethanol inventories rose by a weekly record 1.5 million to 22.5 million barrels. Net margins were 3 cents lower this week and are at minus 9¢.
  • CONAB raised their increased total corn production to 98.7 MMT, up from 98.4 MMT in December.
  • At the Dalian exchange overnight Chinese corn futures fell 1 ¾¢.
  • Funds are estimated to be short 85,500 contracts futures and options combined.
  • Spreads: H/K 6 ¾ carry, H/N 13 carry, N/Z 2 carry.

 

Outlook:  Futures are trading higher ahead of tomorrow reports.  

 

Oilseeds

  • Deliveries: Soybeans 315, Soymeal 371, and Soyoil 297 contracts.
  • Palm oil futures were rose 69 ringgits overnight at 3,110.
  • China markets were mixed overnight at the Dalian exchange. Soybeans rose 3¢, soymeal down $3.90, soyoil 3 points lower.
  • CONAB raised their soybean crop projection to 122.2 MMT from 121.1 MMT. If realized, it will be a record crop.
  • Funds are estimated to be short 26,300 soybeans and 28,000 soymeal futures and options contracts combined. Managed money remains long 108,200 contracts of soyoil.
  • Spreads: H/K 12 ¼ carry, H/N 23 ¾ carry, N/X 2 carry, X/F 4 ¼ carry.

 

Outlook: Higher. The Chinese are expected to sign “phase one” of the U.S. Chinese trade deal January 15. A Chinese delegation is expected to arrive on Monday.  

 

Wheat

  • Egypt’s GASC bought 300,000 MT of wheat for February shipment. The breakdown consists of 120,000 MT of 120,000 MT Romanian, Russian, and 60,000 Ukrainian wheat.
  • Dryness is being reported in Russia’s southern wheat areas. Some regions have received nearly 20% of normal precipitation through January 7th.
  • Trade anticipates wheat export sales between 200,000-550,000 MT.
  • Funds are long an estimated 26,300 contracts.
  • Spreads: Mpls H/K 9 carry, Kansas City H/K 7 ½ carry, Chicago H/K 3 carry.

 

Outlook: Prices are higher ahead of tomorrow’s USDA reports.