Afternoon Market Highlights 4.16.20

Ami Heesh

Apr 16, 2020

Highlights

The challenge continues in the Ag markets as the demand destruction has taken a significant toll on ethanol and feed use with the ongoing “Shelter in Place” and “work from home” from in an effort to curtail the spread of the CoronaVirus. Reports of 22 million US folks on unemployment through last week. Weather warmup forecasts for much of the Us Midwest had farmers eager to get outside and get after their spring field work. 

  • The energy markets are mostly weaker with crude oil down 26 cents at $19.61/barrel (19.55-20.53 with the inability to stabilize at the $20/barrel level).
  • The US$ continues to show strength, up another 565 at 100.02, the gold market is down 4-5 bucks at $1,725/ounce and the CD$ is on the defensive, down 0.00175 at 0.70875.
  • DJIA down 74.74 but holds above 23k at 23429, S&P up 6-7 at 2781 and the NASDAQ up 91 at 8484.
  • May options expiration next Friday, April 24th.
  • Cattle on Feed report is scheduled for after the close next Friday, April 24th. 

Corn

The corn market struggled, despite decent weekly export sales numbers out this morning. The May did find a way to claw its way back into positive territory (although just barely). Demand destruction along with big acreage ideas for this year, are expected to keep pressure on the deferred months. There was spread activity noted buying corn/selling beans along with a bout of bargain buying after yesterday’s weakness. 

  • Closes: May at $3.19 ¾, up ½ cent, July at $3.26 ¼, down ½ cent, September at $3.31, down 1 ½ cents, December at $3.41, down 1 ¾ cents.
  • Weekly export sales came in at 35.7 mb versus 72.8 mb last week and 17.16 mb needed on a weekly basis to meet the US target by September. This week’s top destinations were Japan, Mexico and Columbia. YTD top destinations are Mexico, Japan and Columbia.
  • South Korea purchased 206 tmt of SA corn. 
  • Concerns remain about the health of the Brazilian corn crop from extended periods of dryness in central and south central Brazil.
  • Spreads: K/N 6 ¾ carry, N/U 4 ¾ carry, N/Z 15 carry, Z/N1 23 ¾ carry.

Oilseeds

Soybean prices were on the defensive from lack of fresh supportive news. Prices drew additional pressure from lack of demand and a weak, potential loss of meal feed needs and a struggling crude oil market.     

  • Closes: May at $8.36 ¾, down 5 ¼ cents, July at $8.45 ¾, down 6 cents, August at $8.48 ½, down 5 ½, November at $8.54 ½, down 5 ¼ cents. The products were lower with meal down 60 cents and oil down 22 points (suffering from lack of demand for oil and fear of lack of demand for meal).
  • Weekly export sales came in at 8.99 mb versus 19.23 mb last week and 18.68 mb needed on a weekly basis. This week’s top destinations were Egypt, Japan and Mexico. YTD top destinations are China, Mexico and Egypt.
  • Soymeal sales were solid at 193.32 tmt. This compares to 125.16 tmt last week and 123.91 tmt needed on a weekly basis. This week’s top destination were Ecuador, Morocco and Unknown. YTD destinations are the Philippines, Mexico and Columbia.
  • Soyoil sales were decent at 21.18 tmt versus 25.05 tmt last week and 5.74 needed on a weekly basis. Top destinations this week were Guatemala, Mexico, Korea. YTD top destinations are Korea, Dominican Republic and Columbia.
  • Spreads: K/N 9 ¾ carry, N/Q 2 ¾ carry, N/X 8 ¾ carry, X/F 2 ½ carry, X/H 8 ½ inverse, X/N1 1 ½ carry.

Wheat

The wheat market took a thumping again today on lack of demand for spring wheat. It appears to be a domestic market these days and they are apparently flush with product as they look to discourage shipments nearby and have no interest in J/J either. Pressure stems from weakness in the row crops, energy and equity markets, along with strength in the US$. 

  • May closes: Mpls at $5.06 ¼, down 7 ¾ cents, KC at $4.69 ¼, down 10 ¼ cents, Chicago at $5.29 ¾, down 10 ½ cents.
  • Egypt bought 240k tonnes of French and Russian wheat (180k French and 60k Russian) for LH May/ FH June.
  • Elevator truck lines busy with farmers hauling grain from the bin sites while the ground is pretty firm from cold temperatures recently. Not seeing new sales, either previously contracted or going on DP.  Farmers looking to get grain moved ahead of next week’s spring field work (hopefully).
  • There are basis contracts that still need to get priced.
  • Weekly export sales were reported at 6.6 mb versus 9.5 mb last week and 9.17 mb needed on a weekly basis.
  • By class sales were: HRW 6.56 mb versus 4.17 mb last week and 4.67 mb needed, NSW 0.08 mb versus 3.82 mb last week and 0.60 mb needed weekly, SRW 0.20 mb versus 0.73 mb last week and 1.64 mb needed weekly, White minus 0.97 mb versus 1.18 mb last week and 1.48 mb needed weekly, and HAD 0.69 mb versus minus 0.41 mb last week and 0.77 mb needed weekly (YTD percent of total: 93....90...98...87...94...85 respectively). New marketing year begins June 1, so am thinking we could make our targets for wheat.
  • Spreads: Mpls K/N 13 ¾ carry (got to 14 ¼ today), Kansas City K/N 6 ¾ carry, Chicago K/N 1 carry.