Afternoon Market Highlights


Highlights

The long awaited release of the USDA data turned out to be quite negative across the grain markets with much bigger forecasts than what the trade was expecting.  The US/China trade situation looks to be on hold until the US Presidential elections next November (mighty long wait ahead of us).     

  • The energy markets are mostly lower with crude up slightly at $54/72/barrel.
  • The US$ a tad softer at 97.42, the gold market up 14-15 bucks at $1,513/ounce and the CD$ down 205 AT 0.7555.
  • DJIA down 401 at 25885, S&P down 37 at 2882 and the NASDAQ down 105 at 7853. 

Corn

Corn prices traded sharply lower after the release of the USDA data.  Total production and yield were both above trade expectations.  Big carryouts and slowing demand is expected to wear on corn prices going forward. Synthetic values in the December were said to be near $3.87 via options. 

  • Closes: September at $3.85 ½, down 25 cents, December at $3.92 ¾, down 25 cents, July at $4.12 ¾, down 24 ¾ cents, red Dec at $4.07 ½, down 7 ½ cents.
  • Weekly export inspections were reported at 703 tmt, near the high end of trade estimates of 500-750 tmt. Still looks to be well below what is needed to reach the USDA target.We only have a few weeks left in the marketing year.The new marketing year begins September 1.
  • The USDA pegged the 2019 corn harvested acres at 82.0 million, yield at 169.5 and total production at 13.901 billion bushels.
  • Carryout for 19/20 was increased to 2.181 bb (2.010 bb in July). Carryout for 18/19 was increased to 2.360 bb (2.340 bb in July).
  • Crop conditions are expected to decline after last week. Report to be released at 3 PM CDT today.
  • Spreads: U/Z 8 ¾ carry, Z/H 12 ¼ carry, Z/N 23 ¾ carry and the N0/Z0 fell to a 5 ¼ inverse. 


Oilseeds

The soybean market traded lower in sympathy with the corn market.  Losses were limited form a reduction in the 2019/20 soybean production as reported by the USDA earlier today. The canola market traded lower on spillover weakness in the US corn market. 

  • Closes: November at $8.79 ¼, down 12 ¼ cents, July at $9.27 ¾, down 9 ½ cents and red November at $9.41, down 6 ½ cents. The products were mixed with meal down $4.80 and oil up 13 points.
  • Weekly export inspections were reported at 944 tmt, near the high end of trade estimates of 700 tmt – 1.1 mmt.
  • The USDA pegged the 2019/20 bean harvest acres at 75.9 million, yield at 48.5 and total production at 3.68 billion bushels.
  • Carryout for 2019/20 was reduced to 755 mb (795 mb in July). Carryout for 2018/19 was increased to 1.070 bb (1.050 bb in July).
  • Spreads: X/F 13 ½ carry, F/K 24 carry, X/N 48 ¼ carry. 

Wheat

The wheat market traded lower on increased stocks and production forecasts by the USDA. Additional pressure came from spillover weakness in the corn and soybean markets. Mpls gained on KC with the MWU at a 116 ¾ cent premium over the KWU. 

  • September closes: Mpls at $5.09 ¼, down 10 ½ cents, KC at $3.91, down 26 cents and Chicago at $4.17 ¾, down 27 ¾ cents.
  • Weekly export inspections came in at 689 tmt compared to trade estimates of 350-550 tmt.
  • USDA raised the 2019/20 HRW carryout 26 million bushels to 452 mb and spring wheat stocks were reduced 1 million bushels to 322 mb.
  • Russia’s wheat production was estimated at 75.0 mmt down from 75.5 mmt previously.This compares to the USDA at 73.0 mmt (range runs from 72.0-80.0).
  • Spreads: Mpls U/Z 12 ¾ carry, Z/H 15 ½ carry, Kansas City U/Z 16 ½ carry, U/U 70 carry (5.83 cents a month).