Morning Highlights


Highlights

  • U.S Agriculture Secretary Sonny Perdue announced yesterday that he still expects farmers to be paid a third and final tranche of the 2019 trade aid, even after Phase 1 was signed.
  • Official data showed that China’s pork output for 2019 was at a 16-year low due to ASF, the output data came out at 42.55 million tonnes, down 21.3% from 2018.
  • Drier weather is forecasted for the next 15 days in Argentina, leading to a decline in soil moisture and causing concern for crops in southeastern Argentina.
  • Russia’s agriculture safety watchdog stated that Russia is expected to start supplying beef to China, and that China has certified two Russian beef producers.
  • As of 7:00 AM: Crude oil up 0.19 at 58.71, Dow futures up 64 ticks at 29,304, and the U.S$ index up 141 ticks at 97.461.                          

 Corn

  • The corn market is trading higher this morning, gaining back some of yesterdays substantial losses that brought corn down to a one month low.
  • South Korea’s KFA purchased around 66,000 tonnes of corn via tender at around $216.30 a tonne c&f.
  • Yesterday’s export sales for corn came in above trade expectations at 784,700 tonnes.
  • Dalian corn futures closed higher today, the benchmark contract was up 12 yuan, about 1.74 dollars, at 1,947 yuan per tonne.
  • Open interest for corn is up 20,848 contracts, with the March contract up a total of 16,129 contracts.
  • Spreads: H/K 7 cent carry; K/N 6 ½ cent carry; N/Z 5 ¼ cent carry .

Outlook: Trading steady to higher after seeing large losses in the market yesterday.

 Oilseeds

  • The soybean market was trading lower overnight, set to see the largest weekly loss in 5 months.
  • Weather patterns in Brazil are expected to change over the next 15 days, with rain moving to favor the northern regions rather than the southern. The rains will improve soil moisture; however, they will also delay harvest of soybeans in Mato Grosso and Goias.
  • Losses this week were due to a disappointing Phase 1 deal that left traders skeptical that China would make the promised large purchases of U.S agricultural goods.
  • Malaysia raised the February export tax on crude palm oil to 6% from 5% in January, traders believe that this could lower Malaysia’s exports of crude palm oil.
  • Malaysian palm oil futures saw their worst weekly loss in over 11 years due to the tensions with India. The benchmark contract closed 43 ringgit lower today.
  • Spreads: H/K 13 ¼ carry, H/N 26 ¼ carry, N/X 7 carry

Outlook: Trading lower today as traders continue to be skeptical about Chinese purchases of U.S. soybeans.

 Wheat

  • Wheat markets trading higher overnight due to continued world supply concerns and an increase of tenders and overseas demand this week.
  • Paris milling wheat futures closed higher for today’s session.
  • The estimated French soft wheat planted area for 2020 harvest is down 10% at a 19-year low due to rains delaying planting.
  • The lowest offer for Tunisia’s tender for 100,000 tonnes of soft wheat is said to be $245.99 a tonne c&f
  • Spreads: Chicago H/K 1 ¼ cent carry; Kansas City H/K 7 ½ cent carry; Minneapolis H/K 9 ¼ cent carry.

Outlook: Trading slightly higher today as global business continues to pick up and export prices remain firm in the Black Sea region.