Morning Wire


Morning Highlights

 

  • March options go off the board at the close of trading today.

  • FND for March Futures is Friday February 29th. Be out of long positions by the close on Thursday February 28th or risk participating in the delivery process.   

  • 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.

  • China will launch @ $200 million-dollar fund to combat an increasing infestation of armyworms along with a possible invasion of locusts across their agricultural sector this year.

  • China’s Hubei, the center of the coronavirus outbreak has now asked firms to not resume work before March 11. This extends the previous no work edict that was to expire today.          

  •  In early trading, Deere & CO shares are up 8 ½ % after higher Q1 profits were reported.     

  • Outside markets as of 7:40 am CT: Dollar Index down .1430 @ 99.723, Crude Oil down .72 at 53.16, Dow Futures down 96 at 29,075.

     

Corn

  • Export sales for 19/20 were 1,249,300 MT vs trade estimates of 700-1.0 MT. Sales for 20/21 came in at 1,000 MT vs estimates of 1-100 MT.

  • Export sales for Sorghum were 49,600 MT for 19/20 and 33,000 MT for 20/21.  

  • The USDA Outlook Forum estimated 2020 corn plantings @ 94.0 million acres, up slightly from the average estimate of 93.6 million acres. This compares to 89.7 million acres in 2019. This morning, the forum has projected corn production for the 20/21 crop @ 15.460 billion bushels vs 13.692 billion bushels in 19/20. Yield is estimated @ 178.5 bpa vs 168.0 bpa in 19/20. Ending stocks for 20/21 corn are estimated @ 2.637 billion bushels compared to 1.892 billion in 19/20.          

  • The weekly Ethanol report showed production was up by 7,000 barrels per day to 1,040,000 barrels per day. Stocks rose by 423,000 barrels to 24.78 million barrels. Ethanol margins were a penny higher this week and are now at break-even levels.  

  • The EPA announced on Thursday afternoon that 1.25 billion ethanol blending credits were generated in January 2020 compared to 1.31 billion blending credits in December of 2019.

  • South Korea’s NOFI bought 135,000 tons of optional origin corn overnight. The purchase was made in two consignments for June arrival in South Korea. Cargill and Pan Ocean were the sellers.

  • Destructive armyworms are expected to affect 6.67 million hectares of corn in China this year, hence the aggressive prevention and control measures being taken as mentioned earlier in this wire.                 

 

Outlook: Corn export sales were supportive. March options go off at the close with 3.80 seeming to be the target area. USDA Forum ending stocks offers overhead resistance. Not really much new, range bound choppy trade to continue.           

 

Oilseeds

  • Soybean export sales for 19/20 were 434,900 MT vs trade estimates of 600-1.2 MT. Sales for 20/21 came in @ 3,400 MT. Soymeal sales for 19/20 came in @ 169,400 MT     vs trade estimates of 200-400 MT. Soybean oil sales were 42,000 MT for 19/20 vs estimates of 15-45 MT.       

  • The USDA Outlook Forum estimated 2020 soybean plantings @ 85.0 million acres vs the average estimate of 84.6 million acres. This compares to 76.1 million acres in 2019. Early this morning the forum estimated the 20/21 soybean crop @ 4.195 billion bushels vs 3.558 billion bushels in 19/20. Soybean yield was pegged @ 49.8 bpa vs 47.4 bpa in 19/20. Soybean ending stocks for 20/21 were estimated 2 320 million bushels vs 425 million bushels in 19/20.

  • Malaysian palm oil futures posted gains again overnight on improving exports and strength in related oil markets. The benchmark May contract closed higher, up 32 ringgits @ 2,622.               

 

Outlook: Beans sales were disappointing, the Outlook Forum ending stocks offer some support. Trade continues to wait on the Chinese to engage bean export business.        

 

Wheat

  • Export sales for 19/20 were 346,300 MT vs trade estimates of 400-650 MT. Sales for 20/21 were 60,100 MT vs estimates of 0-50 MT.  

  • USDA’s Outlook Forum estimated wheat plantings for 2020 @ 45.0 million acres vs the average estimate of 44.9 million vs 45.2 million acres a year ago. Early this morning the forum estimated 20/21 wheat production @ 1.836 billion bushels vs 1.920 billion bushels in 19/20. Wheat ending stocks for 20/21 were pegged @ 777 million bushels vs 940 million bushels in 19/20.       

  • The Taiwan flour Millers’ Association bought 102,525 MT various classes of U. S wheat for April-May shipment. Itochu and ADM were the sellers.

  • A flour miller in Indonesia bought 35,000 tons of Black Sea wheat for July shipment. Price was $235.00/ton c&f. New crop business out of the Black sea usually begins in late March or early April but reportedly the miller wanted to test market prices before business begins in earnest in a month or so.

  • French farm office FranceAgrimer estimated that 65 % of the French soft wheat crop is in Good/Excellent condition by 2-17-20. The rating was unchanged from the previous week.

  • As stated above, China is bracing for an increasing problem with armyworm pests this year. Wire story this morning states that already at least 170 hectares of wheat have been hit by the pest in china’s southwestern Sichuan province since December of 2019.                          

               

Outlook: Wheat prices are higher after USDA Outlook Forum ending stock projections were released this morning. HRW prices may be tempered a bit by the expectation of widespread rains across parts of northern Texas, all of Oklahoma and Kansas beginning Sunday afternoon thru Monday morning.