Afternoon Market Highlights


Highlights

  • Grain markets struggled today as US weather remains mostly favorable across much of the Midwest.

  • As of 1:20pm, Energy markets were higher with crude oil trading 35 cents higher, heating oil was up 2 -3 cents and unleaded was 3-4 higher. Nearby ethanol down ½ cent. The US$ index was 80 ticks firmer and the DJIA was 62 points lower.

  • US FED raised its overnight lending rate ¼ point. 

Corn

  • Corn futures struggled but remain range bound as CN is about 35 cents off the recent high on May 24 and CZ tests the $4.00 mark again but is unable to build any upside momentum. Warm/hot temps are in the forecast across the center US for 7 to 10 days but the timing is too early to be of any major concern to the corn crop.

  • Weekly ethanol production rose 12,000 bpd to 1.053 million bpd and ethanol supplies rose 300,000 to 22.2 million barrels

  • IEG Vantage(informa) released their updated acreage estimate of 88.7 million, down 270k from their last guess. USDA is 88 million.

  • US corn remains competitively priced and is the most readily available supply around the globe as estimates of Brazil production continues to erode.

  • Barge freight was weaker again today, CIF was weaker too. Domestic cash markets show firmness attempting to garner coverage for summer slots.

  • Closes: CN $3.76, down 1 ½, CU $3.85 ½, down 1 ¼, CZ down 1 ¼ at $3.97 and CN19 $4.18.

  • Spreads; N/U 9 ½ carry, U/Z 11 ¼ carry, Z/H 9 carry, Z/N 21 carry. 

Oilseeds

  • Soybeans were under pressure from some headlines that the US will impose tariffs on Friday. Also seeing fund selling pressure the front end contracts more so than the deferred contracts, pushing the N/X spread weaker.

  • Some pressure is also coming from mostly favorable US weather and the fact the US isn’t selling a lot of soybeans to China right now and rail export markets are sloppy/non-existent.

  • Technically, SN18 sees it lowest price and lowest settlement since August 2016, while SX18 has fallen $1.00 since the late May high to print the lowest level since August of 2017. SMN filled a gap created Feb 12 and closed below its 200 day MA for first time since January.

  • Informa upped their soybean acreage estimate to 89.9 million acres, a 490k increase over their last guess. USDA current estimate is 89 million.

  • At 8am, the USDA announced 5tmt old crop and 172tmt new crop to unknown.

  • Closes; July at $9.36, down 18, August at $9.41 ¾, down 17 ¾, Nov $9.358 ¾, down 15 ¾.  

  • Spreads; N/Q 5 ½ carry, N/X 22 ¾ carry, X/F 8 ¼ carry, X/N 22 ½ carry. 

Wheat

  • Wheat prices trimmed yesterday’s gains with both the KC and Chicago contracts retreating with double digit losses. MWN and MWZ print the lowest price in 60 days as MWN got to within a couple cents of the lowest levels in over 12 months.

  • Russia dryness is basically the lone friendly fundamental factor on the radar despite a drought reduced US HRW harvest.

  • Informa pegged “other” spring wheat acres at 12.2 million, down 250k from previous.

  • Another choppy day for the MW/KC spread trade as MGEx gained back about a nickel of its premium.

  • Harvest reports continue to reveal a drought reduced yield with good protein and quality across OK and KS. Some country elevators continue to give away the carry and keep their cash bids strong to entice bushels to town.  

  • July closes; Mpls at $5.84 ½, down 8 cents. KC at $5.39, down 14 ½ cents and Chicago $5.16 ½, down 18 cents.

  • Spreads; Mpls N/U 13 ¼ carry, U/Z 14 carry, Kansas City N/U 15 cent carry, KWN/N 68 ¾ carry, WN/U 16 carry and WN/N 73 cent carry. So the incentive to carry is still viable. 

Cattle

  • Cattle futures ended the day slightly lower and near the low end of the daily trading range as pressure in other ag commodities fueled the selling in light volume choppy trade. June live cattle ended the day 60 cents lower while the August and October contracts closed down about 40 cents.

  • The Dec 18 and early 2019 contracts remain at a $4 to $7 premium over the nearby contracts. June 18 live cattle is a $4.00 premium to August and $1.00 premium to October. Technically October trades near its 50 day MA of $106.87.

  • Feeder cattle were nominally weaker with little feature in today’s market.

  • Cash cattle seemed mostly undefined. Boxed beef cutouts were higher mid-day with both selects and choice higher on light movement. 

Lean Hogs

  • Lean hog prices were firm again today with the July and August contracts leading the strength, with August up another $2.00 and July up $1.325.  The June contract again posted its highest price since early March and closes to within $5.00 of its contract high.

  • October hogs close at $65.80 is now well above its 50 day MA of $64.62 with the 100 and 200 day MA above at $66.68 and $67.33 respectively.

  • The lean hog index was up $1.22 at $75.79.

  • Export relations with China remain uncertain.