Morning Highlights with Export Sales


 

Highlights

  • According to people familiar with the matter, trade negotiators from both the U.S and China are expected to hold a phone call as early as next week discussing progress with phase 1.
  • Minneapolis Fed President Kashkari stated yesterday that the U.S Labor Department’s monthly jobs report, that will be released tomorrow, will presumably understate COVID19 job losses due to many people not actively searching for new work.
  • Today’s jobless claims report showed that U.S jobless claims fell to 3,169,000 for the week of May 2nd compared to 3,846,000 in the week prior. U.S insured unemployment rate rose to 15.5% compared to 12.4% the week prior.
  • The energy markets are finding some strength this morning as yesterday’s EIA report showed U.S crude stockpiles rising less than expected and gasoline seeing a draw for the second consecutive week.
  • Oil exports to China also saw an unexpected increase during last month which granted additional support to the energy markets.
  • As of 7:15 AM: Crude oil up 2.32 at 26.31, Dow futures up 324 ticks at 23,387, and the U.S$ index up 193 ticks at 100.284.                          

 Corn

  • The corn market is trading higher with support stemming from exports and the ethanol market.
  • Yesterday’s ethanol report showed that production had increased for the first time in 8 weeks, while inventories had decreased and dropped down from the recent highs.
  • As more commuters return to the roads, we can expect to continue seeing support from ethanol. However, the damage has still been done and we can’t ignore the effects that will be seen on the balance sheets, especially with the large crop that continues to be planted at a very fast pace.
  • Export sales were reported at 774,600 MT compared to estimates pegged at 600,000-1,100,000 MT.
  • Spreads: K/N 2 ½ cent carry; N/Z 16 ½ cent carry; Z/N 26 carry .

Outlook: Trading slightly higher today as the short term fundamentals remain friendly.

 Oilseeds

  • The soybean market is trading higher this morning gaining support from Chinese cargo purchases. For now, China has mostly covered their nearby soybean needs with Brazilian beans, however they are still expected to fulfil this year’s commitments made in phase 1.
  • As tensions remain high between the U.S and China, the markets continue to cap gains and await talks set to happen next week.
  • Export sales were reported at 653,100 compared to estimates of 600,000-1,100,000 MT. Soymeal sales came in at 131,400 MT compared to estimates of 100,000,-250,000 MT and Soyoil came in at 18,900 MT with estimates at 5,000-30,000 MT.
  • Chinese soybean imports in April fell by 12% compared to a year earlier due to delayed cargoes from Brazil.
  • Open interest for soybeans is up 9,400 contracts.
  • Spreads: K/N 1 ¾ cent carry, N/X 5 ¼ cent carry

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

 Wheat

  • Wheat markets are all trading higher this morning due to frosts forecasted for this weekend in the Midwest that may threaten some soft red winter wheat.
  • Hard red winter wheat continues to see dryness concerns and will need the rain that is forecasted over the next week and a half.
  • Export sales for 19/20 were reported at 244,800 MT compared to estimates set at 50,000-300,000 MT. Sales for the 20/21 marketing year were reported at 135,300 MT compared to estimates of 100,000-350,000 MT.
  • Canada 2020 wheat seeding intentions were reported at 25.4 million acres vs 25.7 million acres in 2019 according to Statscan.
  • The FAO reported that world wheat production in 20/21 will be stable at 762.6 million tonnes, stating that losses in the EU, Ukraine and the U.S. will be offset by larger harvests in Australia, Kazakhstan, and Russia.
  • Spreads: Chicago N/U 2 ¾ cent carry; Kansas City N/U 6 ½ cent carry; Minneapolis N/U 11 cent carry.

Outlook: Trading higher today as traders remain cautious of weather threats across the globe.