Morning Wire


Highlights                

  • CHS Hedging is offering Energy Hedging classes June 19, Grain Hedging classes June 25 and Technical Trading classes on June 26. Go to our website at www.chshedging.com for registration and class details.      

  • U. S. and Mexican leaders will begin meeting today in hopes of finding a negotiated solution to the immigration problems at the U. S. border as a possible 5 % tariff on all Mexican goods coming into the U. S. is set to take effect on June 10th.  President Trump’s own party leaders are vowing to block any tariffs pointed towards Mexico.                        

  • World leaders have gathered in England today and on the beaches of Normandy, France tomorrow to commemorate the 75th anniversary of the D-Day invasion of Nazi occupied northern France by Allied forces.    

  • Fed chairman Jerome Powell has stated that the Federal Reserve is prepared to cut rates if it decides that trade conflicts are threating the U. S. economy. Dow futures are up again this morning after a sharp rise yesterday.

  • Chinese importers are preparing applications for waivers on import tariffs on about 730 U. S. goods affected by the U. S.- Chinese trade war. This come after the Chinese ministry of finance posted a list of goods for which waivers could be granted. The list included beef and pork, soybeans, coal and copper scrap. The applications must show the tafiffs have caused the applicant serious economic damage.                                                                                

  • A/0 7:35 A. M. Crude Oil down 81 @ 52.67, Dow Futures up 61 @ 25,407 , U. S. Dollar Index -230  @ 96.897.   

            

Corn

  • Brazil’s government passed legislation on Tuesday that would allow ethanol makers to sell fuel directly to gas stations as a resolution was passed to increase fuel industry competition. Additional work will be needed to bypass fuel distributors to complete the legislation.                   

  • Mexico has bought 2.5 million tons of Brazilian corn in the past week as tariff threats from the U. S. loom.               

  • Not new news, but an expansion, as lots of talk on Tuesday as to corn being shipped into the U. S. from South America. Some sources are saying 5-10 cargoes of corn from Brazil are to be loaded onto ships to the U. S. between September and January, while others are saying an additional 1 million tons of corn is to come to the U. S. from Argentina and Paraguay.                           

Outlook: A little break in the weather this week has allowed some planting to get done and put pressure on prices. Watch the weather over the next few days as rains are to increase and may put an end to corn planting as areas have or will pass PP dates. Needless to say, market is and will remain highly volatile.                         

 

Oilseeds                      

  • Brazil experienced it smallest month of May soybean exports since 2016. 8.7 million tons of soybeans were exported in May as slow farmer sales and African swine fever slowed down Chinese demand.                     

  • As the trade war escalates, Chinese officials cut their estimate of total soybean exports for 18-19 to 84 million tons, down 3 ½ % from the earlier estimate of 87 million tons.       

  • Crop consultant Dr. Cordonnier is using planted soybeans acres in the U. S. of 84 million, yield of 45 bu/acre to arrive at a projected U. S. soybean crop of between 3.6 to 3.8 billion bushels                                        

Outlook: Overnight trade has taken soybean prices down 6-7 cents as better weather early this week has allowed some planting progress. Nearby forecasts are talking drier weather across a good portion of the belt late this weekend and most of next week.                          

 

 Wheat

  • Russia has delivered approximately 4,000 tons of wheat as humanitarian aid to North Korea as a severe drought is being experienced by that country.                                          

  • Japan will import 12,080 tons of feed wheat purchased in a simultaneous buy and sell auction that closed overnight. The feed wheat is to arrive in japan by November 28, 2019. 

  • Overnight, China sold 107,231 tons of wheat at auction from state owned reserves. The sale represented about 3 ½ percent of the total wheat available at the auction.

  • Germany expects their 2019 wheat harvest to increase almost 22% on a year to year basis, to 24.70 million tons after a massive drought last year.  

  • Late Tuesday afternoon, some forecasts talked of increased rains and cooler weather in Russia, Canada and Australia. While some rain is forecast in western Australia this week, the forecasts we’ve seen continue the hot, dry pattern over the next 10 days in Russia and make no mention of significant rain in Canadian wheat areas.                                                                                                    

Outlook: Wheat prices have continued to go south overnight after a big down day on Tuesday. Better weather over HRW areas the past few days has eased some thoughts of potential damage to the new crop but rains are to increase starting tonight through Saturday over a good portion of the belt. A pullback in corn and beans prices are not helpful either.