Morning Highlights


Highlights

  • CHS Hedging will be attending the Commodity Classic in San Antonia February 27-29. For those that will be attending, please stop by booth 2071 to visit with Scott Strand and Kent Beadle.  
  • This Friday is First Notice Day for March futures, with all long positions being reported after the close on Thursday.
  • China’s top container ports have started to clear up congestion as workers return to their posts.
  • Japan has announced the closure of all schools due to the spreading of the coronavirus.
  • The Dow is expected to open lower this morning after the first U.S case of the virus with unknown origins was reported.
  • As of 7:15 AM: Crude oil down 1.44 at 47.29, Dow futures down 386 ticks at 26,526, and the U.S$ index down 396 at 98.600.                          

 Corn

  • The corn market is trading a few cents lower this morning as coronavirus fears continue to leave traders nervous. The March contract trading in a narrow range of $3.67 ½ to $3.70.
  • Export sales came out at 864,600 tonnes compared to estimates of 800,000-1,300,000 tonnes.
  • Net ethanol margins were 1 cent lower this week at a 1 cent negative, and ethanol production came in at 1054 kb vs 1040 in the previous week.
  • Broiler egg data for the week ending Feb 22 showed a 3% increase compared to a year earlier.
  • Open interest for corn is down 55,970 contracts, with the March contract down 81,5000, May up 11,700, July up 7,300, and Dec up 5,200.
  • Spreads: H/K 4 ¼ cent carry; K/N 4 ¾ cent carry; N/Z 3 ¾ cent carry .

Outlook: Trading lower today as the equity markets are set to see another day of losses, due to new developments in the coronavirus.  

 Oilseeds

  • The soybean market is trading lower overnight, losing any gains the market managed to make yesterday after the announcement that Argentina would be suspending export registrations.
  • Export sales for soybeans came in very poor at 339,300 tonnes, with estimates set at 600,000-900,000 tonnes.
  • Exports for soymeal were reported at 157,500 tonnes compared to estimates of 150,000-350,000 tonnes, and soyoil sales came in at 5,600 tonnes compared to estimates of 8,000-45,000 tonnes.
  • The rumors that Argentina will raise the export tax for soybeans by 3% have been confirmed, leaving their new export tax at 33%.
  • Open interest for is down 20,230 contracts for soybeans, down 20,470 contracts for soymeal, and down 19,490 contracts for soyoil.
  • Malaysian palm oil futures were higher today due to the announcement that there would be a 20 billion ringgit stimulus package to help counter the economic effects of the coronavirus. The benchmark contract was up 1.69%.
  • Spreads: H/K 11 carry, H/N 22 ¼ carry, N/X 10 ½ carry

Outlook: Trading lower today as coronavirus fears continue to shake the markets.

 Wheat

  • Wheat markets are all trading lower this morning as fears of the virus developing into a pandemic continue.  
  • Exports sales were reported at 381,800 tonnes, with estimates pegged at 400,000-600,000 tonnes.
  • The International Grain Council forecasts that world wheat production for the 20/21 season will rise to a record 769 million tonnes due to a 2% increase in planted area.
  • Australia’s Bureau of Meteorology stated that there is a 70% chance of above average rains over the next three months, which could help boost wheat production.
  • The lowest offer received for Bangladesh’s 50,000 tonne wheat tender is believed to be $265.38 a tonne, no purchase has been made yet.
  • Egypt’s agriculture ministry stated that they aim to harvest 9.5 million tonnes of local wheat and import 3-3.5 million tonnes of wheat this season.
  • Jordan issued a new tender for 120,000 tonnes of wheat to be sourced from optional origins.
  • Spreads: Chicago H/K 5 cent inverse; Kansas City H/K 7 ¼ cent carry; Minneapolis H/K 14½ cent carry.

Outlook: Trading lower today as the market continues to be pushed by fears of the spreading coronavirus.