Morning Highlights


Highlights

  • USDA March S&D report is Thursday Mar 9 @ 11:00 a.m.CONAB will also have Brazil production estimates out on Thursday.
  • A second strain of bird flu was reported in Barron Co. Wisconsin in a flock of turkeys.This was reported as a lower pathogenic strain.
  • Eastern US areas are expecting to see cooler temps going into this weekend, with chances of snow returning. In the Southwest, windy and dry conditions prevail for this week, with colder temps forecast for the upper Midwest.
  • Rail freight premiums were down yesterday, as UP shuttles were quoted near tariff, while BN shuttles were said to be down almost $1,000/car on the front slots.
  • The US dollar index is +.130 pts @ 101.950, crude oil futures -.54 @ $52.60, DOW equity futures steady @ 20,918.

Corn 

  • The market did see a daily corn sale of 120k tons announced yesterday to unknown destination.
  • Analysts’ average trade guess for Thursday’s corn carryout is 2.317 bil bu [last month USDA 2.320 bil].
  • Private forecasts are now putting Brazil corn crop production as high as 91-93 mil tons. USDA last had them at 86.5 mil tons.
  • Kansas and Missouri fertilizer traders estimate NH3 applications so far about 75% complete already. The mild winter and early spring weather is helping to get field work off to a fast start.
  • A couple of Midwest ethanol plants were said to be limiting corn unload times this week, due to full space.

 Outlook: corn has spent the week so far trending lower each day. The corn market lacks a ‘new’ story to latch on to, so prices correct back lower from last week’s surge. Major support in CZ would come in at $3.89 – the 50 week moving average.  Night trade is seeing further price erosion as front months are trading down through the short term moving averages. Calls 1-2 lower

Oilseeds

  • SK17 futures came under technical selling pressure, as values penetrated the 100 day moving average [10.34], and also saw the 10 day average cross down through the 100 day average – a sell point for some technical traders. The next support level would be at the 200 day moving average at $10.20.
  • China customs data show February bean imports at 5.54 mil tons, up 23% from previous year. However this is down from the January level of 7.6 mil.
  • US Census data show bean export loadings for January coming in at 272.7 mil bu, 35 mil bu above the weekly FGIS export report data amount. This is a fairly wide difference.Soybean meal shipments were also high, coming in at 1.3 mil tons, 19% above year ago amounts.
  • Analysts’ average trade guess for Thursday’s bean carryout is 418 mil bu [last month USDA at 420 mil]. Chances are high that USDA will raise their 104.5 mil ton Brazil crop, as many private forecasts are ranging from 106-109 mil tons.

Outlook: beans hit some technical sell points yesterday early on, taking values lower. A continuance of the lower price action was seen overnight. A close for SX17 below $10.07 would open the market to additional downside pressure.  We might see additional position evening today and going into tomorrow’s report, and that may be more lower direction as funds lighten the load.  Calls: weaker 3-4 lower.

 Wheat

  • There was a report from Reuters of 2 Russian wheat cargoes and 1 Argentine cargo rejected by Egypt due to ‘quality issues’.What the exact quality issue is, no one has said.But the claims are it is not an ergot problem.
  • Wildfires were the talk of the afternoon in parts of Kansas, Colorado, and the Texas Panhandle. Rangeland and CRP ground is mostly at risk. Longer term forecasts [2-3 weeks out] are bringing slightly better chances for moisture in the Southwest.
  • There were 131 KC HRW H deliveries put out of Salina last night, and 289 new MWH with 154 out of Minneapolis and 135 out of Duluth [all by CHS/stopped by Term].
  • Weekly deliverable stocks report shows KC 101.8 mil bu [unchanged], Chicago 79.9 mil bu [-1.3 mil], Minn 23.6 mil [+694k].
  • HRW TX gulf export basis was down .10-.15 as a result of dropping freight values. Domestic premiums have also backed off for interior destinations.
  • US Ag attache to India is projecting the 2017-18 wheat crop at 95 mil tons. However, they still expect to see this year imports to fill in their needs.

 Outlook:  wheat markets fell in step with the other commodities in a generally weaker trend on Tuesday. Towards the close, sellers turned buyers, and prices saw a bit of a rebound off the lows of the day. Calls: 2-3 lower to start.