Morning Highlights


Highlights

  • Saudi Arabia raised its oil output back above 10 million barrels a day, essentially reversing a third of the cuts it committed to back in January.
  • FOMC will start their 2-day meeting today, where an interest rate increase is likely.
  • March ’17 futures go off the board today at noon.
  • NOPA Crush report out tomorrow at 11:00 am CDT.
  • CHS Hedging has two upcoming energy hedging classes: March 16th in Colby, KS, and March 22nd in Champaign, IL. It is not too late to be signed up! You can register for both classes at www.chshedging.com.

Corn

  • China is still on track to import 3 million tonnes of pork in 2017, on track with last year’s number.  China consumes half of the world’s annual production.
  • The sixth bird flu outbreak in China occurred at a duck farm.  China has culled over 175,000 birds since October in order to combat the outbreaks.
  • China corn prices are up 9.9% YTD at 1,670 yuan/ton.  An increase in price is due to the ongoing process of adjusting inventory levels by the government.
  • Spreads: K/N 7.5¢ carry, K/U 14.75¢ carry and K/Z 22.25¢ carry.

Outlook: Continued choppy trade as we are in a seasonal lull.

Oilseeds

  • South American weather looks both favorable for harvest progress and crop development for the remaining soybean crop.
  • Farmers continue to be disengaged from selling in the US, increasing the size of the export program coming out of Brazil.
  • Malaysian palm oil closed up 29 ringgits at 2,752 for May, down 19 for the week.
  • Spreads: K/N 10¢ carry, K/Q 11.5¢ carry and K/X 4¢ inverse.

Outlook: Lower today as there is a lack of fresh news and meal is trading lower this morning.

Wheat

  • In the 7-day forecast, winter wheat growing areas remain dry.  An increased chance in precipitation for these areas is in the forecast for the end of next week.
  • WK pushed 10 cents lower yesterday, along with KWK moving nearly 13 cents lower.  Wheat is having a hard time finding support in an oversupplied global market.
  • KC Wheat conditions: Kansas 40% G/E vs. 43% last week, Oklahoma 42% G/E vs. 43% last week, Texas 29% G/E vs. 34% last week.
  • Spreads: Mpls K/N 7.75¢ carry, Kansas City K/N 12.25¢ carry and Chicago K/N 15.25¢ carry.  

Outlook: Lower on a stronger US dollar and limited support.