Morning Wire


Morning Highlights

 

  • March options go off the board at the close of trading this Friday February 21st.

  • CHS Hedging will be attending the Commodity Classic in San Antonio February 27-29.  For those that will be attending, please stop by booth 2071 to visit with Scott Strand and Kent Beadle.

  • The CFTC will reportedly propose rules changes today on how swap trades are reported to data repositories. The CFTC will propose a two-day delay for end users, including companies that use swaps to hedge their business, from the current 15-minute reporting requirement. In addition, the CFTC will propose a one-day delay for dealers and other large institutions to report block trades      

  • The USDA announced on Thursday afternoon a goal for biofuels that would allow the fuels, by the year 2050, to make up 30 % of U. S. transportation fuels.   

  • Overnight, China cut key lending rates in order to further stimulate their economy hit hard by the coronavirus.     

  • Outside markets as of 7:15 am CT: Dollar Index up .1650 @ 99.870, Crude Oil up .49 at 53.98, Dow Futures down 43 at 29,295.

     

Corn

  • The average trade estimate from a Reuters poll ahead of today’s USDA Outlook Forum estimates 2020 corn planted acres @ 93.6 million. Yield is pegged @ 176.5 bpa, production @ 15.111 billion bushels and ending stocks for 20/21 @ 2.443 billion bushels.        

  • Iran’s state-owned animal feed importer SLAL has tendered to purchase 200,000 tons of corn. The tender closes February 25th. Shipment is slated for March.

  • Latest wire stories have the Chinese buying at least 4 cargoes of U. S. sorghum for April-May shipment.   

  • Grain trade lobby Coceral is estimating EU 2020 corn production @ 65.0 million tons, up from 61.0 million tons in 2019.         

 

Outlook:  Lackluster, narrow 2 cent range in overnight trading. March options go off the board tomorrow at the close, OI is large at 380 strike level. Trade will be influenced today by USDA Outlook Forum planted acre projections.         

 

Oilseeds

  • Trade estimates from a Reuters poll ahead of today’s beginning of the USDA Outlook Forum peg soybean planted acres for 2020 @ 84.6 million acres with a range of 80.0-87.5 million acres. Yield is estimated @ 50.3 bpa with production @ 4.225 billion bushels. Ending stocks for 20-21 are estimated 2 519 million bushels.      

  • Soybean production in Paraguay could exceed 10 million tons this year according to an agriculture minister. Timely rains in that country have allowed for the lofty estimate.

  • Brazil’s national crop agency Companhia Nacional de Abastecimento estimates that country could export 9 million tons of soybeans in February. This would be an 80 % increase from February 2019.           

  • Malaysian palm oil closed higher overnight breaking a two-session losing streak. Optimism for an increase in exports and India issuing licenses for 1.1 million tons of refined palmolein from Indonesia fuel the rally. The benchmark May contract close 43 ringgits higher @ 2,590.             

 

Outlook:  Not much new with futures down about a nickel in overnight trade. Waiting on Chinese demand, bigger SA crops, lend to choppy to lower trade. USDA Outlook Forum soybean planting estimates will be at the forefront in traders minds the next couple of days.      

 

Wheat

  • A Reuters poll taken ahead of the annual USDA Outlook Forum beginning today pegs 20/21 wheat plantings @ 44.9 million acres with the range of estimates from 43.3 to 46.7 million acres. Average yield is estimated @ 49.1 bpa, production @ 1.860 billion bushels. 20/21 ending stocks are pegged @ 829 million bushels.

  • Saudi Arabia’s state grain buyer SAGO has tendered to purchase 715,000 tons of optional origin wheat for delivery between April and June. The tender close tomorrow February 21st. The tender seeks wheat with both 11 % and 12.5 % protein content.       

  • KC deliverable stocks were down 1.208 million bushels vs last week. Chicago deliverable stocks were down 253,000, while deliverable stocks in Duluth were up 153,00 and up 185,000 in Minneapolis.

  • Coceral estimated EU soft wheat production in 2020 @ 137.9 million tons vs 145.7 million tons in 2019. Excessive rains in the fall led to reduced planted areas in France, Germany, Denmark and Britain.                   

  • The Thai Feed Mill association bought 50,000 tons of optional origin animal feed wheat from Black Sea origins @ $243.50/ton c&f for April 15-May 15 shipment.  

               

Outlook:  What market offers as much frustrating trade as wheat? Tuesday rally, give a lot of that back in early trade on Wednesday, only to come back and actually have a decent close, then lower again overnight. Saudi tender results could be interesting, demand has picked up a bit, but this market has shown no propensity to sustain any meaningful rallies for a long time.