Afternoon Market Highlights 4.20.20

Ami Heesh

Apr 20, 2020

Highlights

We had a mixed day in the grain markets with the wheat trading higher on crop worries in the EU, Black Sea Region and the US HRW crop.  The row crops suffered from steep losses in the energy markets. The US shuffles the deck chairs as to how best to approach the re-opening of the country (getting folks back to work and businesses being able to re-open their doors to the public).    

  • The energy markets are sharply lower with the May crude oil down a MINUS 46.17 at -$28.07/barrel and falling. The June contract is down 4-5 bucks at $20.40/barrel.
  • The US$ is stronger, up 0.179 at $99.98, the gold market is up 45 bucks at $1.695/ounce and the CD$ is weaker, down 0.00495 at 0.70845.
  • DJIA down 362 at 23880, the S&P down 41 at 2829, and the NASDAQ down 16 at 8633.
  • May options expiration is scheduled for Friday, April 24th. First Notice Day for May futures is Thursday, April 30th with all long positions being reported after the close on the 29th.
  • StatsCan plantings reports is scheduled for May 4th and their March 31 stocks report is scheduled for May 7th.
  • The next USDA S&D report is scheduled for May 12th at 11 AM CDT. 

Corn

Corn prices were on the defensive from sharp declines in the crude oil market.  Prices drew additional pressure from reports of rapid corn planting in Indian and Illinois.  Weather conditions look good for the first half of the week with chances for rain come Thursday and Friday. Most months made new contract lows. 

  • Closes: May at $3.14 ¼, down 8 cents, July at $3.22 ¼, down 7 cents, September at $3.27, down 6 ½ cents, December at $3.37, down 6 ½ cents.
  • Weekly export inspections were 684 tmt, below the low end of what the trade was looking for.
  • South Korea’s feed group KFA bought 58k tonnes of South American corn at $179.50/tonne C&F for August shipment.
  • Brazil’s 2nd crop estimated at 67.9 mmt versus 69.2 mmt previously, because of extended periods of hot/dry weather conditions. April is said to be the key month for corn development in Brazil.
  • Dry weather, for central and south central Brazil, is thought to continue for the balance of the month, which could prompt additional cutbacks in production.
  • Planting progress through Sunday, April 19, is estimated at 7% (5-12) versus 3% last week.
  • Spreads: K/N 8 carry, N/U 5 carry, N/Z 15 carry, Z/N1 24 carry.

Oilseeds

Soybeans were on the defensive from lack of fresh supportive news, declining feed needs for meal and spillover weakness in the crude oil market. Planting is thought to have begun and could continue at a decent pace with this week’s favorable weather forecast.  Many folks are expecting the end of this week and next week to be a very busy time with fertilizer and planting.    

  • Closes: May at $8.26 ½, down 6 cents, July at $8.36 ¼, down 6 cents, August at $8.36 ½, down 6 cents, November at $8.45 ¾, down 5 ¼ cents. The products were weaker with meal down 2-3 bucks and oil down 31 points.
  • Weekly export inspections were 540 tmt, near the top end of what the trade was looking for.
  • Soybean plantings are estimated at 2% complete (1-3) versus zero last week.
  • Spreads: K/N 10 carry, K/N 20 ¼ carry, N/Q 2 ½ carry, N/X 10 ½ carry, Q/X 8 carry, X/F 3 ½ carry, X/H 5 ½ inverse, X/N1 3 ½ carry. 

Wheat

The wheat market ran hard to the upside early on renewed dry weather forecasts for the Black Sea Region and Europe.  Prices drew additional strength from production cuts to Russia’s and Ukraine’s wheat crops.  There are hopes that Egypt could be in again this week for wheat and that possible the US could get a shot at some of the business.  

  • May closes: Mpls at $5.10 ¾, up 4 cents, KC at $4.94, up 15 ¼ cents, Chicago at $5.48 ¾, up 15 ¼ cents.
  • Weekly export inspections were 470 tmt, near the low end of the trade estimates (97k spring wheat, 205k HRW, 31 SRW, 95k white and 42k HAD).
  • Spring wheat planting is expected to be near 11% complete (8-18), compared to 5% last week.
  • Winter wheat conditions are thought to have declined 1% to 61% G/E (59-64). The past two weeks were reported at 62% G/E.
  • Russia has been an aggressive seller in the world export arena with ideas that they could exhaust their available supplies for export before Mid-May, resulting in. 
  • Spreads: Mpls K/N 12 ¼ carry, U/Z 12 carry, Kansas City K/N 6 ¾ carry, U/Z 9 ½ carry, Chicago K/N 1 ¾ inverse.