Highlights
A mixed day in the grain markets as the trade positions itself ahead of the USDA S&D report on Thursday and a long weekend. There is no trade on Thursday evening or Friday in observance of the Holy Week Holiday. Trade is scheduled to resume Sunday evening at 7 PM CDT.
- The energy market is mostly weaker with crude oil now trading 1-2 bucks lower at $24.29/barrel.
- The US$ turned lower, trading down 785 at 99.90, the gold market was down 18-19 bucks at $1,665/ounce and the CD$ is trading higher, up 0.0064 at 0.71525.
- DJIA trading is higher but losing its earlier strength. DJIA up 139 at 22819 (22748-23617 for the day), S&P up 27-28 at 2671 and NASDAQ up 16-17 at 7930.
- More ethanol pants are set to idle production, along with meat packing plants shuttering their doors do the spread of the CoronaVirus.
- USDA S&D updated US and world balance sheets is scheduled for release Thursday at 11 AM CDT.
- USDA plans to release its first crop progress/conditions report for corn and spring wheat in next Monday’s report due out at 3 PM CDT.
- The USDA said they will make plans to re-survey 2019 unharvested corn and beans in four states (Michigan, Minnesota, South Dakota and Wisconsin). If warranted, results will be published in their May 12 S&D report. The state of North Dakota is expected to be re-surveyed at a later time.
Corn
The corn market got some legs after making new contract lows yesterday. Bargain hunters surfaced, pushing prices higher and early strength in crude oil. Gains were limited from the lack of ethanol use with the sharp drop in gasoline demand. Prices stepped back from their highs as crude oil prices turned lower.
- Closes: May at $3.31 ½, up 3 ¾ cents, July at $3.37 ¼, up 3 ¾ cents, September at $3.42 ¼, up 3 cents, December at $3.51, up 2 ¾ cents.
- CIF premiums were 1 cent firmer for April and steady for May.
- South Korea’s feed groups were in the market for 207k tonnes of corn.
- Poet looks to idle some of their Iowa and South Dakota ethanol plants, along with delaying the start of their Indiana plant.
- Algeria tenders for 40k tonnes of Argentina corn. Brazil’s processors of chicken and pork possibly look to import corn as their domestic corn supply is limited and expensive. The corn is expected to be sourced from Argentina and Paraguay as buying US corn is a bit tricky with the difference in US and Brazil currencies.
- Spreads: K/N 5 ½ carry, N/U 5 carry, N/Z 13 ½ carry, Z/N1 21 carry.
Oilseeds
Soybeans opened higher in sympathy with the rising corn prices. Strength was tempered by midday weakness in the crude oil market. A bout of short covering was noted, ahead of Thursday’s USDA data. Prices drew underlying support from ideas of declining crop production in South America from persistent dryness in southern Brazil and parts of Argentina.
- Closes: May at $8.54 ¾, down ¾ cent, July at $8.61, down ¼ cent, August unchanged at $8.64 and November at $8.66 ¾, up 1 ½ cents. The products were mixed with meal down 3-4 bucks and oil up 65 points.
- CIF premiums were 1 cent weaker for April and May.
- The canola market trade lower on increased farmer selling ahead of spring planting and a stronger CD$. The nearby closed down $2 bucks at 460.60.
- Spreads: K/N 6 ½ carry, N/Q 3 carry, N/X 5 ¼ carry, X/F 2 ¼ carry, X/H 11 ½ inverse, X/N1 5 ½ inverse.
Wheat
The wheat market rolled over on USDA’s crop conditions report out yesterday afternoon. Crop conditions were reported at 49% G/E in Kansas, 73% G/E on Oklahoma and 62% G/E in Texas. Ideas are that Egypt’s GASC will be in the market for a jag of optional origin wheat with the weakness in board prices. They have changed their tender stance from FOB to C&F on concerns of possible CoronaVirus disruptions at various ports (they have basically put the onus on the supplier for assuring shipment of uncontaminated wheat).
- May closes: Mpls at $5.24 ½, down 2 ¼ cents, KC at $4.73 ½, down 2 ¼ cents and Chicago at $5.49 ¼, down 6 ½ cents.
- Spot bids for HRW were mostly unchanged with farmer selling fairly thin. Farmers begin their focus on spring field work with fertilizer said to be going down in some areas in the Southern Plains.
- Paris milling wheat traded slightly higher as weakness in the US market was overshadowed by dry weather concerns in Russia, Ukraine and France.
- Domestic mills are fairly flush with supplies after recent scramble to restock breads, flour and pasta at the grocery stores.
- Spreads: Mpls K/N 10 ¾-11 ¼ carry, Kansas City K/N 6 ¾ carry, Chicago K/N 1 ½ inverse (losing ground on this one).
