Afternoon Market Highlights
9/18/2019 2:14:20 PM
The Federal Reserve cut interest rates 25 basis points on global economic concerns, with one more cut expected before the end of 2019. China was said to have purchased 720k tonnes of beans over the past three days, with no signs of additional purchases on the horizon.
- The USDA Cattle on Feed report is scheduled for after the close on Friday. The Average trade estimates are at: 99.3% on feed Sep 1 (98.5-100), with August placements at 93.7% (88.9-97.6) and August marketings at 98.3% (97.6-98.8).
- The energy markets are on the defensive with crude oil trading over a buck lower at $58.05/barrel.
- The US$ is 273 stronger at 98.52, the gold market is down 19-20 bucks at $1,487/ounce and the CD$ is a bit weaker at 0.75335.
- DJIA down 160 t 26949, S&P down 19 at 2988 and the NASDAQ down 81 at 8104.
Corn prices were supported on borrowed strength in the wheat market along with a bout of short covering. Gains were limited from mostly non-threatening weather for much of the US Midwest over the balance of September. The December contract held above 20-Day MA support level at $3.65 ½. Looking at the July 21 corn contract (with a close at $4.24 today, recent high of $4.30 and contract high so far at $4.42). It may not be a bad place to start hedging some corn out there with current carryout over 2.0 billion bushels for 2019/20 and ideas of 94-95 million acres of corn getting planted next year. This year’s crop might just make it to maturity if the big, hard freeze stays away for a while longer.
- Closes: December at $3.71 ¼, up 3 ¼ cents, July at $3.96 ½, up 1 ½ cents, red Dec at $4.05 ¼, up ½ cent.
- Weekly export sales estimates: 900-1.3 mmt.
- Weekly ethanol production was reported at 1,003,000 barrels per day, down 20k barrels per day. Inventories were up 700k barrels to 23.2 million barrels.
- Spreads: Z/H 11 ¼ carry, H/K 7 ¾ carry, Z/N 25 carry, Z/Z 33 ¾ carry.
Soybean prices were weaker on non-threatening weather for the later planted soybean crop and uncertainty about whether the US will see future soybean purchases by China. Face to face talks are still on for October to discuss a possible resolution to the current situation between the US and China.
- Closes: November at $8.88 ¾, down 5 cents, January at $9.02 ¼, down 5 cents, July at $9.36, down 3 ¾ cents and red November at $9.48, down 4 ¾ cents. The products were mixed with meal down 2-3 bucks at 291.60 and oil up a freckle at 29.87.
- Weekly export sales estimates: 700-1.1 mmt for beans, 50-450 tmt for meal and 0-35 tmt for oil.
- Soybean harvest is expected to begin this or next week with some early harvest noted in the Northern Plains area.
- South America weather conditions have been on the dry side, with farmers gearing up for another planting season.Forecasts suggests warm/dry conditions to continue for this and next week in Argentina and north/north central Brazil, with the extended models showing a wetter pattern developing.
- Spreads: X/F 13 ¾ carry, F/K 23 ¾ carry, X/N 47 carry (just shy of 6 cents a month).
The wheat market garnered strength from increasing demand and ongoing dryness in Australia and Argentina. Australia typically harvests their wheat crop around Nov/Dec. Prices saw additional strength from technical buying and a bout of short covering. Spring wheat harvest began again this week, with reports of disappointing quality.
- December closes: Mpls at $5.13 ¼, up 6 ¾ cents, KC at $4.10, up 7 ¾, cents and Chicago at $4.89 ½, up 5 ¼ cents.
- Egypt bought 180k tonnes of Russian wheat for LH Oct shipment, with nothing reported for FH Nov shipment.
- Turkey, Tunisia, Algeria and Japan are all in the market for a jag of wheat.
- Weekly export sales estimates; 300-600 tmt.
- Spreads: Mpls Z/H 14 ½ carry and Kansas City Z/H 13 ¾ carry. Kansas City gained a bit over Mpls with Mpls at a 1.04 premium over KC.