Morning Highlights


Highlights

  • A surge of coronavirus infections outside of China is being seen, with a sharp rise in cases in South Korea, Italy, and Iran.
  • There are now 79,524 confirmed cases of coronavirus, with 2,626 deaths and 25,157 recovered.
  • A shortage of Chinese made fertilizer is being seen due to the coronavirus causing areas of China, such as Hubei, to be put under quarantine.
  • According to customs data released this morning, China has lifted a ban that restricted the import of U.S beef from American cows that were more than 30 months old.
  • Brazil’s Agriculture Minister announced on Friday that the U.S will be reopening its market for Brazilian fresh beef exports.
  • As of 7:00 AM: Crude oil down 2.05 at 51.33, Dow futures down 758 ticks at 28,223, and the U.S$ index up 319 ticks at 99.581.                          

 Corn

  • The corn market is trading lower overnight following weakness in other commodities stemming from the coronavirus and a strong U.S dollar.
  •  Markets dropped to the lowest levels seen since mid-December, breaking out of the recent range that corn had been trading in.
  • According to the CFTC COT report on Friday, corn specs were small buyers last week of 3,100 contracts, leaving their new short position at 114,100 contracts.
  • Ukraine’s Deputy Minister reported that Ukraine’s 2020 grain harvest is expected to fall to 65-70 million tonnes from 75.1 million tonnes in 2019.
  • South Korea’s KFO and FLC both purchased around 65,000 tonnes of corn in private deals late on Friday. These deals follow multiple other deals that South Korea has made since last week.
  • Spreads: H/K 3 ½ cent carry; K/N 2 ¾ cent carry; N/Z 2 ¾ cent carry .

Outlook: Trading lower today as the markets are controlled by the fear of coronavirus growing into a pandemic.

 Oilseeds

  • The soybean market is trading lower this morning due to fears of the coronavirus spreading more and more outside of China.
  • Open interest for soybean contracts is down 31,100 contracts, with the March contract down 46,400 contracts.
  • The CFTC COT report showed that soybean specs were small buyers last week after 4 straight weeks of selling. They purchased a total of 3,600 contracts leaving their net short position at 97,600 contracts.
  • Widespread rainfall across Brazil continues to slow down soybean harvest, with the forecast expecting rain to continue through this week.
  • Malaysian palm oil futures were lower during todays session due to continued coronavirus concerns and a weaker ringgit. The benchmark contract fell 25 ringgit to 2,598 ringgit per tonne.
  • Spreads: H/K 8 carry, H/N 19 carry, N/X 10 ¼ carry

Outlook: Trading lower today as the market assesses the risk of the coronavirus.

 Wheat

  • Wheat markets trading lower this morning due to continued coronavirus fears and weakness in the equity markets. A strong U.S. dollar is also pressuring the market.
  • The CFTC COT report showed that wheat specs were good buyers last week, buying a total of 18,300 contracts and leaving their net long at 32,100 contracts. Chicago wheat is now at a new record long.
  • SovEcon estimates Russia’s February wheat exports at 1.6 million tonnes, vs January’s 1.9 million tonnes.
  • Ukraine grain exports are up 24% at 39.5 million tonnes so far for this year, with wheat exports up at 16.4 million tonnes.
  • Saudi Arabia’s SAGO purchased 715,000 tonnes of wheat via tender for an average price of $247.46 a tonne.
  • Tunisia has issued a tender to purchase 125,00 tonnes of milling wheat from optional origins.
  • Spreads: Chicago H/K ¼ cent inverse; Kansas City H/K 7 cent carry; Minneapolis H/K 13 cent carry.

Outlook: Trading lower today as the strong U.S dollar and global concern over the coronavirus affects the markets.