Morning Wire


Highlights

 

  • Grain futures will close at 12:05pm CT today, December 24th, and will not re-open until 8:30am CT on Thursday, December 26th.

  • January grain options expire this Friday, December 27th.

  • Sign up for the Hedging Academy training class on January 9th by CHS Hedging is still available.  See our website for more information:  CHS Hedging.

  • China has opened a research center in the country’s northwest Shaanxi province. The center will study crop diseases, monitor pests and has developed an automatic monitor for wheat scab, a main crop disease in China.

  • Argentine’s Ag Minister Luis Basterra has reportedly been talking to farmers about the possibility of applying lower grains export taxes to producers located farther from ports. Farmers in that country have not been happy due to the export taxes that were raised from 25 % to 33 % on soybeans and from 7 % to 15 % on corn and wheat nearly two weeks ago.    

  • Outside markets as of 7:30am CT: Dollar Index up .0640 at 97.723, Crude Oil up $.21 at $60.73, Dow Futures up 33 at 28,583.

     

Corn

  • In his weekly crop update, Dr. Cordonnier left his estimates of 19/20 corn production in Brazil and Argentina unchanged @ 102.0 and 47.5 million tons respectively.

  • Monday afternoon’s hog and pig report a/o December 1st was mostly in line with trade expectations. All hogs and pigs were @ 103 % of last year, Hogs kept for breeding was @ 102 % of last year while marketing’s were pegged @ 103 % of last year.    

  • South Korea’s MFG purchased about 66,000 tons of optional origin corn in a private deal. Cargill is believed to be the seller @ $209.74/ton c&f for arrival in South Korea around April 1st.

  • China’s customs cleared it protocol in order to allow the import of DDG’s from Bulgaria. The allowance is effective today and further diversifies China’s ability to import feed ingredients from origins other than the U. S.     

 

Outlook:  Expect light range-bound pre-holiday trade. Overnight trade has been executed slightly lower in ½ to 1 cent ranges.  

 

Oilseeds

  • First Notice for Delivery of January contracts is Tuesday, December 31st.

  • Dr. Cordonnier is estimating Brazilian 19/20 soybean production @ 123.0 million tons while his peg for soybean production in Argentina stands @ 52.0 million ton. Both estimates are unchanged from last week. 

  • Egypt’s GASC has tendered to purchase 30,00 tons of soybean oil and 10,000 tons of sunflower oil. Deadline for offers is December 30th. The oils are to arrive in Egypt between Feb. 1 and Feb. 15th.

  • Palm oil futures closed higher overnight on thoughts of lower output and higher biofuel mandates. The benchmark March contract closed 16 ringgits higher @ 2,923. Palm oil market will now be closed until Friday December 27th.  

 

Outlook: Market taking a breather after making six-week highs on Monday. Short-covering has been the name of the game lately on optimism for additional Chinese demand. Overnight trade about a penny off the lows but 3 ½ -4 ½  cents lower into late overnight trade.  

 

Wheat

  • EU soft wheat exports for the 19/20 marketing year stand @ 13.4 million tons a/o December 22nd. The tonnage exported so far this year constitutes a 67 % increase from the same time a year ago.

  • Ukraine has exported 29.35 million tons of grain so far in the 19/20 marketing year that began on July 1 through December 23, 2019. Exports are up 35 % from year ago levels and wheat exports represent 14.5 million tons of the total.

  • In order to ensure supplies and stable market prices, Morocco will suspend its 35 % customs duty on soft wheat from Jan. 2 to April 30. The official announcement will be made on Thursday after a government meeting.

  • Index rebalancing beginning on the 5th business day of January (for 5 days) is expected to bring buying of about 16k contracts in KC wheat and selling of 8k contracts in Chicago wheat.  

  • KC spot wheat protein scale was largely unchanged on Monday but 11.20 proteins were down 5 cents to +105/115H while 14.0 proteins rose 13 cents to +213/223H. 

     

Outlook: Firm overnight trade with KC and Chicago wheat up 2 cents or so and Minneapolis up 3 cents. World prices continue to be firm, weather not ideal in Europe, Australia and Black Sea areas, and hopes of possible Chinese wheat purchases provide underlying strength.