Morning Highlights


Highlights

  • The White House has decided that they will appeal the federal court decision that had called into question the program that exempted small refineries from biofuel blending mandates.
  • U.S Treasury yields have fell to a record low today as virus uncertainty fuels the market, the 10-year Treasury yield fell to 0.695% and the 30-year Treasury yield fell to 1.28%.
  • Equities are set to open lower this morning as fears regarding the coronavirus in California control the markets.
  • Crude oil prices have fallen this morning as it is reported that Russia will not agree to steeper output cuts by OPEC.
  • As of 7:00 AM: Crude oil down 2.30 at 43.60, Dow futures down 710 ticks at 25,350, and the U.S$ index down 840 at 95.980.                          

 Corn

  • The corn market is trading lower overnight, pressured by lower equities and growing virus fears.
  • Estimates for next weeks March supply and demand report peg U.S corn ending stocks at 1.888 bb, compared to 1.892 in February.
  • Corn exports for Brazil quiet, with the shipments in Febuary down 78% from last year at an 8 year low for the month.
  • There is some chatter in the market that Chinese buyers are making inquiries for U.S cargoes of DDGs.
  • Dry weather is forecasted to continue throughout central and southern Brazil for the next 10 days, causing dryness concerns for the safrinha corn crop.
  • South Korea’s KFA has purchased 65,000 tonnes of corn via a private deal, with the corn most likely being sourced from South America.
  • Open interest for corn is down 11,880 contracts, with the May down 16,500 contracts and the July up 2,200 contracts.
  • Spreads: H/K 3 cent carry; K/N 2 cent carry; N/Z 1 cent carry .

Outlook: Continuing to trade lower within a narrow range as pressure from the equities due to the virus mount.

 Oilseeds

  • The soybean market traded lower overnight as virus fears continue to spread and disappointing export sales hurt the market.
  • China has granted tariff exemptions for U.S soybeans to some of its crushers, the government has also asked these crushers that applied for exemptions for their monthly purchase plans.
  • Argentina’s farmer groups are planning on holding a four-day sales strike next week due to the recent announcement that Argentina would be raising the export taxes on soybeans and products.
  • Brazilian soybean exports remain strong, as they are set to see massive exports in March due to their record crop.
  • U.S. soybean sales to China for the week ended Feb 27th were the lowest seen in almost six months, coming in at just 6,012 tonnes of soybeans.
  • Malaysian palm oil futures fell by almost 3% today due to weakness in rival oils and virus fears, however the futures still saw a 5% weekly gain.
  • Deliveries: Soybeans 199, Meal 31, and Soyoil 44.
  • Spreads: H/K 7 ¼ carry, H/N 17 carry, N/X 5 ¾ carry

Outlook: Trading lower today due to lackluster export demand and virus fears.   

 Wheat

  • Wheat markets are mixed overnight, with Chicago and KC trading lower and Minneapolis trading slightly higher.
  • Estimates for next week’s March supply and demand report peg U.S wheat ending stocks at 0.944 bb, compared to 0.940 in February. World ending stocks are estimated at 288.47 million tonnes, vs 288.03 million in February.
  • Paris wheat futures fell to the lowest price seen since December due to the expectation that Russia could harvest their second largest crop in history this coming season.
  • Ukraine’s grain exports have risen by 24% to 41.7 million tonnes so far in the 19/20 season, with wheat exports rising to 16.7 million tonnes.
  • FranceAgriMer estimates that French soft wheat conditions were unchanged this week at 64% G/E.
  • Spreads: Chicago K/N 1 cent carry; Kansas City K/N 7 ¼ cent carry; Minneapolis K/N 10 cent carry.

Outlook: Trading steady to lower today as traders remain warry of the coronavirus spreading and its effects of the global economy.