Morning Highlights


Highlights

  • China’s President Xi stated in a televised report today that China would strictly prevent the rebound of coronavirus inside their country.
  • Forecasts are expecting a widespread frost to occur across the Midwest on Saturday with parts of Michigan, NE Indiana, central and northern Ohio, central Kentucky, Wisconsin and northern Minnesota expecting to see a hard freeze that could damage soft wheat as well as emerging corn.
  • The crude market is trading higher this morning and is set to see a second consecutive week of gains as demand begins to return due to easing lockdowns across the globe.
  • As of 7:00 AM: Crude oil up 0.38 at 23.93, Dow futures up 212 ticks at 24,055, and the U.S$ index down 138 ticks at 99.751.                          

 Corn

  • The corn market is trading slightly higher this morning as support stems from the energy market and an increase in Chinese demand.
  • Traders will now look towards next week’s WASDE report to see possible changes in old crop demand and in turn an increased carryout. The trade also looks toward the first look at the 20/21 balance sheet as March planting intentions will be factored into the data.
  • The average estimate for new crop ending stocks is set at 3.41 billion bushels, with the average estimate for old crop set at 2.28 billion bushels.
  • South Korea’s MFG is said to have purchased 138,000 tonnes of corn from South America for an estimated prices of $170.98 a tonne c&f.
  • BAGE reported that Argentine corn harvest is now 38% complete vs 37% complete last week and a 31% 5 year avg.
  • Spreads: K/N 1 ¾ cent carry; N/Z 15 ¾ cent carry; Z/N 25 ¼ carry .

Outlook: Trading slightly higher today due to support from ethanol and Chinese demand.

 Oilseeds

  • The soybean market is trading higher this morning with support still stemming from Chinese purchases. Although we have now seen two consecutive sessions of gains due to Chinese demand, soybeans are still set to see a small weekly decline.
  • For now, Chinese purchases are supporting the market, but we will need to see more purchases in order to support these prices.
  • According to Bloomberg, citing sources familiar with the matter, China was said to have purchased about 6 cargoes of U.S. beans on Thursday.
  • Malaysian palm oil futures rose as much as 4% during today’s session due to hopes of seeing some demand recovery as countries ease lockdowns.
  • Open interest for soybeans was up 17,890 contracts as new buyers enter the market.
  • Spreads: K/N 3 cent carry, N/X 4 ½ cent carry

Outlook: Trading higher today as the market is supported by Chinese purchases.

 Wheat

  • Wheat markets are mixed this morning with Chicago trading lower, KC trading steady and Minneapolis trading slightly higher.
  • The market focuses on demand concerns due to Covid19 while finding some support from drought and frost risks in the U.S.
  • The average trade estimate for U.S. wheat ending stocks on next week’s WASDE report is set at 824.1 million bushels for new crop and at 973.8 million bushels for old crop.
  • Spreads: Chicago N/U 2 ¾ cent carry; Kansas City N/U 7 cent carry; Minneapolis N/U 10 ½ cent carry.

Outlook: Trading steady today as demand concerns and weather concerns seem to balance each other out.