Morning Highlights with Export Sales


Highlights

  • Equity markets start the day out weaker ahead of this week’s jobless claims which is expected to show 2.5 million people filing for unemployment, this would be the lowest number in seven weeks.
  • Weather continues to look good for the U.S. as the southern plains see rains and the corn belt looks to see warm temperatures next week.
  • Weekly gasoline demand posted another increase to 7.398 million barrels per day, a 734,000-bpd increase from the week prior.
  • Energy markets trade higher as demand slowly starts to come back and gasoline stocks see another drop this week.
  • Vice General Manager of China’s COFCO International, Zhan Hua, said “China will still implement the trade deal and chances are high that China will speed up purchases”.
  • As of 7:00 AM: Crude oil up 60 cents at 25.90, Dow futures down 192 ticks at 22,970, and the U.S. $ index up 204 ticks at 100.5.                         

 Corn

  • The corn market saw a quiet overnight session as futures try to stabilize after the down day yesterday.
  • Exports sales for 2019/20 were at 1,073,200 MT compared to estimates of 800,000-1,500,000 MT.  For 2020/21, sales were 554,000 MT compared to estimates of 300,000-600,000 MT.
  • Markets will look to stabilize from the increased ethanol production and continued strong export interest.
  • Yesterday’s ethanol production was up 19,000 bpd to 617,000 bpd, the highest production level in 5 weeks but 41% below the production level from a year ago.
  • Despite the strong planting progress in much of the midwest, states like North Dakota are about 90% unplanted, South Dakota 50% unplanted, and 2/3 of Ohio and Michigan unplanted.
  • Spreads: K/N 2’0 cent inverse; N/Z 14’0 cent carry; Z/N 25 ¾ carry.

Outlook: Trading weaker as reaction to the report on Tuesday catches up and futures pulled lower by wheat and soybeans.

 Oilseeds

  • The soybean complex continues to trade weaker on the overnight as the relationship between the U.S. and China remains on rocky ground.
  • Export sales for 2019/20 were 655,500 MT compared to estimates of 500,000-1,000,000 MT.  For 2020/21, sales were 440,000 MT compared to estimates of 200,000-500,000 MT.
  • Soymeal export sales for 2020/21 were 101,400 MT compared to estimates of 100,000-225,000 MT.  For 2020/21, sales were 18,000 MT compared to estimates of 0-75,000 MT.
  • For 2019/20, soyoil export sales were at 6,700 MT compared to estimates of 5,000-25,000 MT.  For 2020/21, export sales were 2,800 MT compared to estimates of 0-5,000 MT.
  • The USDA projects Chinese total imports at 3.527 bil/bu. If this comes true, it would be the largest soybean imports in a single marketing year on record.
  • U.S. exports for the year were set at an optimistic 22% ahead of last years number as it is presumed, we will see an uptick in sales from the Chinese.
  • Spreads: K/N 4’0 cent carry, N/X 6 ½ cent carry.

Outlook: Markets will look for a bounce back in today’s trade after the pressure yesterday felt overdone.

 Wheat

  • Wheat markets saw mostly weaker trade on the overnight session
  • Export sales for 2019/20 were at 203,500 MT compared to estimates of 100,000-300,000 MT.  For 2020/21, sales were 149,800 MT compared to estimates of 150,000-300,000 MT,
  • Much of the HRW winter wheat belt is expected to receive moderate to heavy rains in the next 3 days.
  • Black Sea futures traded to their lowest point since March 18th as they are receiving much needed rains.
  • If the world new crop carryout numbers are confirmed, it would be the 3rd year in a row of record global production. 
  • Ukraine’s major grain production region of Odessa has lost about 1.24 million acres of winter crops due to severe drought which could cut the regions production by 70%.
  • The Black Sea region is expected to have 32.5% of the global wheat trade this year, worth noting that with the bounce back in production Australia is expected to have 7.98% of wheat trade vs. 4.47% last year.
  • Spreads: Chicago N/U 3 ¾ cent carry; Kansas City N/U 7 ¼ cent carry; Minneapolis N/U 10 ¾ cent carry.

Outlook: Mostly weaker today as forecasts look favorable for wheat growing regions in the world.