Morning Highlights


Highlights

  • Officials from the Trump administration indicated yesterday that they would not take economic measures against China if Beijing sticks to the trade commitments made earlier this year.
  • Tyson Foods Inc stated yesterday that regardless of Trump’s order to keep facilities open, they expect the coronavirus crisis to continue to slow production and idle U.S. plants, and in turn constrain the U.S meat supply.
  • The energy markets are all trading higher this morning as states in the U.S had begun to ease their lockdowns yesterday. However, there are concerns that gains could be lost if we were to see a second wave of infections due to the easing lockdowns.
  • As of 7:00 AM: Crude oil up 2.06 at 22.45, Dow futures up 262 ticks at 23,833, and the U.S$ index up 396 ticks at 99.880.                          

 Corn

  • The corn market is trading slightly higher for the front months while the deferred months are trading lower. The market seems to be taking a breather after two consecutive sessions of losses.
  • The USDA’s crop progress report pegged corn planting at 51% complete which was above the avg analysts estimate of 48%. Planting progress is significantly ahead of the 5 year avg of 39%.
  • Corn planting saw very good progress in the northwestern regions of the Midwest over the last week, while areas in the far eastern Midwest and northern Plains lagged behind a little.
  • Brazil continues to see dryness in their safrinha crop areas, with production estimates leaning more towards 95 million tonnes vs the USDA’s April estimate of 101 million tonnes.
  • Ethanol prices are beginning to see some support, following the RBOB market as more and more cars begin to get back on the roads.
  • Spreads: K/N 7 ¼ cent carry; N/Z 18 ¾ cent carry; Z/N 28 ¼ carry .

Outlook: Trading steady to lower as traders seem to have run out of fresh headlines to trade.

 Oilseeds

  • The soybean market is trading slightly lower this morning as tensions between the U.S and China continue to weigh on the market.
  • The USDA’s crop progress report pegged soybean plantings at 23% complete, above the avg estimate of 21% and the 5 year avg of 11%.
  • Brazilian soybean exports for the month of April hit an all time record of 16.3 million tonnes, the previous record had been set in May of 2018 at 12.35 million tonnes.
  • Malaysian palm oil stocks in April rose by 10% compared to March, the futures market in turn closed at a more than 9 month low with the benchmark contract settling at 1,977 ringgit per tonne.
  • Spreads: K/N 2 ½ cent carry, N/X 6 ½ cent carry

Outlook: Trading lower today as tensions between the U.S and China remain.   

 Wheat

  • Wheat markets are all trading lower this morning as forecasts for the EU continue to show beneficial rains.
  • The USDA reported that 55% of the winter wheat crop is G/E, which is a 1% improvement from the previous week’s ratings, analysts had expected a decline to 53%.
  • The USDA also reported that spring wheat plantings were only at 29% complete vs the 5 year avg of 43%.
  • Ukraine plans to decide on their next wheat export quota in July according to the Ukraine Economy minister.
  • Romania’s agriculture minister has reported that the Romanian wheat crop has been damaged by the drought and that an estimate of the damage may be available next week.
  • Spreads: Chicago K/N 5 ¾ inverse; Kansas City K/N ½ inverse; Minneapolis K/N 8 ½ cent carry.

Outlook: Mostly weaker today with winter wheat leading the way lower due to the unexpected increase in crop ratings.