Morning Highlights


Highlights

  • Despite negative comments from President Trump on the relationship with China, the Chinese Foreign Ministry spokesman Zhao Lian said that keeping a bilateral relationship with the U.S. was in the interest of both countries. 
  • China has reported a rebound of 3.9% from a year ago in industrial production in April, a positive sign that their economy is starting to recover from the effects of the outbreak.  This also is giving crude reason to trade higher this morning as well.
  • Eurozone is reporting first quarter GDP down 3.2% from a year ago, the largest decline on record.
  • Forecasts for the U.S. continue to show rain across much of the southern and eastern midwest, helping to alleviate dry conditions in these areas. Temperatures warm up next week to help push the crops out of the ground. 
  • As of 7:15 AM: Crude oil up 68 cents at 28.24, Dow futures down 203 ticks at 23,339 and the U.S. $ index up 2 ticks at 100.510.                        

 Corn

  • Corn futures saw quiet trade again on the overnight’s as fresh news is relatively thin.
  • Rains were seen in the overnight stretching from Missouri to Michigan.  Much of the midwest, minus North Dakota, have forecasts showing strong signs for moderate to heavy rainfall. 
  • Gasoline demand continues to recover, offering hopes that ethanol production will continue to see a slow rebound as well.
  • Argentina corn harvest is estimated to be 40% complete as reported by the BAGE, with an estimated production level of 50 MMT.
  • Spreads: N/U 4 1/2 cent carry; N/Z 13 ½ cent carry; Z/N 25 ¾ carry.

Outlook: Slightly higher/steady trade as markets watch weather forecasts and the strong planting pace in the U.S.

 Oilseeds

  • The soybean complex traded higher on the overnights; board crush values start to trend higher the last few sessions.
  • The NOPA crush report for April is due out today with an estimated crush level of 170.483 million bushel according to analyst surveyed by Reuters. 
  • China continues to make purchases of U.S. soybeans despite Brazil being at a discount.  Speculation swirls on if China will still fulfill Phase 1 commitments.
  • Argentina soybean harvest is estimated to be 87.4% complete according to the BAGE.  They kept their production estimates steady at 49.5 MMT.
  • Spreads: N/Q 2 ¾ cent carry, N/X 4 ½ cent carry.

Outlook: Higher trade to start the day with as the market continues to see a technical bounce.

 Wheat

  • India has produced a record setting wheat crop at 106.21 MMT, but they struggle to market the crop as the coronavirus lockdown means the countries more than 7,000 wholesale food markets are lightly staffed.
  • The Black Sea region is on deck to receive some rains this weekend as they continue to hope for dry conditions to be over with.
  • Despite rains in the forecasts, southwestern HRW wheat areas look to remain in a drought pattern. 
  • Spring wheat planting in North Dakota has been at a slow pace this spring as they battle excess moisture.  But the 5-day forecast does call for dryer conditions to help with planting.
  • Spreads: Chicago N/U 2 ½ cent carry; Kansas City N/U 6 ½ cent carry; Minneapolis N/U 11 ½ cent carry.

Outlook: Higher trade to start the morning but forecasted rains for dry areas in the world will be watched by traders for direction today.