Morning Highlights


 Highlights

  • The coronavirus outbreak in China is grabbing headlines around the world as 9 people have died and 440 have been infected, but it’s how quickly the disease can spread that has the world watching.The first reported case in the U.S. happened yesterday.
  • Chinese Vice Premier Zheng told the World Economic Forum the trade deal with the U.S. wouldn’t hurt rival exporting nations as complaints are being heard that they were left out of the deal.
  • After the annual U.S. soybean delegation visited the Chinese last week, it’s being reported that commercial soy importers are not being told by the Chinese to prioritize the buying of U.S. soybeans.
  • The Senate approved rules for the impeachment trial of President Trump by a vote of 53-47.

 Corn

  • The corn market is seeing stronger overnight trade, yesterday’s trade was encouraging with corn able to close off of its lows.
  • With the latest WASDE news digested and the market waiting on the Chinese to do something, direction in the corn market should be influenced by what wheat decides to do.
  • Inspections were nothing special yesterday at 345k MT, below the lowest estimates.Corn keeps losing ground to the pace needed to meet USDA targets.
  • Spreads: H/K 5 ¾ carry, K/N 5 ¼ carry, N/Z 1 ¾ carry.

 

Outlook:  Rangebound and sideways trade until the market can shake the rut it is stuck in.

 

Oilseeds

  • Soybeans are following wheat higher, as with corn, news remains mostly thin.
  • The idea of a large Brazilian crop is not going away any time soon, with some private estimates putting the production number as high as 124 MMT.
  • Export inspections yesterday were strong yesterday at 1.2 MMT.Total inspections are up 23.7% from this point last year.
  • Demand from China is still up for questions as they are rebuilding their hog herds, and seasonally, this is the time of year where more export demand comes from South America.
  • Spreads: H/K 13 ½ carry, H/N 27 ¼ carry, N/X 7 ¼ carry, X/F 4 carry.

 

Outlook: Trends continue lower for the soybean market as the market struggles to find support to bounce off.

 

Wheat

  • Chicago wheat is leading the way higher in technical trade, it is on pace to break the highs going back to July 2018, if that happens, it would then be the highest levels since July 2015.
  • Support could be seen from the lack of fresh supplies hitting the market for the next 4-5 months.
  • SRW deliverable stocks are the lowest in 12 years and export sales have been strong the last 5 weeks.
  • Jordan purchased 60k MT of hard milling wheat, sourced from optional origins.South Korea canceled an international tender to buy 200k MT of soft wheat from Russia.
  • Spreads: Mpls H/K 8 ½ carry, Kansas City H/K 7 ¼ carry, Chicago H/K 2 ¾ carry.

 

Outlook: The market looks like it wants to keep climbing higher, cautious trading ahead as the market can get overbought in situations like this.