Highlights
A mostly supportive day in the grain markets ahead of the May option expiration tomorrow. Prices drew strength from stronger crude prices, hopes for increased demand for US goods. Rumors early in the session were that China was making plans to purchase up to 10.0 mmt of beans, 20.0 mmt of corn and 1.0 mmt of cotton. There was no confirmation or proof of that today, allowing the markets to settle back of their early morning highs.
- The energy markets were mostly positive with the June crude oil trading three bucks higher at $16.78/barrel.
- The US$ is slightly firmer, up 0.070 at 100.458, the gold market is stronger, up 8-9 bucks at $1,735/ounce and the CD$ is up 0.0062 at 0.71135.
- DJIA up 146 at 23622, S&P up 7 at 2795, NASDAQ up 35 at 8530.
Corn
Corn prices saw both sides with support stemming form rumors that China would be in the market for up to 20.0 mmt of US corn. Prices retreated from early highs on no conformation or details from China. The market appears to be wanting to see the “proof in the pudding” before getting wrapped up in Chinese buying. The market wants to see it to believe it.
- Closes: May at $3.19 ¾, up 2 ¼ cents, July at $3.26 ½, up 1 ¾ cents, September at $3.30 ½, up 3 cents, December at $3.39 ¼, up 2 ½ cents.
- Gulf premiums were mostly unchanged for A/M/J. Barge freight values were weaker from ample supplies and lack of demand.
- Weekly export sales were a bit disappointing at 671 tmt. The trade was hoping for a much bigger number.
- Spreads: K/N 6 ¾ carry, N/U 3 ¾ carry, N/Z 13 carry, Z/N 22 ¾ carry.
Oilseeds
Soybean prices were firmer on borrowed strength in crude oil and hopes for improving demand for US beans. Prices retreated from their highs after falling to push through and hold above some of the MA’s. Weather conditions mostly favorable for planting with chances for rain tonight or tomorrow.
- Closes: May at $8.39 ¾, up 5 cents, July at $8.47, up 4 ½ cents, August at $8.47 ¼, up 4 cents, November at $8.47 ¾, up 1 ¼ cents. The products were firmer with meal up 60 cents and oil up 12 points.
- Gulf premiums were steady for A/FH May and 1 cent firmer for LH May.
- The July contract climbed above its 10-Day MA of $8.49 ½ but failed to hold above that value going into the close. The July high was within 4 cents of its 20-Day MA at $8.60 ¾.
- The USDA announced the sale of 272k tonnes of US soybeans to China for the current marketing year.
- Argentina struggles with exporting grain from low water levels along the Parana River.
- Spreads: K/N 7 ¼ carry, N/Q ¼ carry, N/X 1 carry, X/F 1 carry, X/H 10 inverse, X/N 3 ¾ inverse.
Wheat
Wheat prices were mixed with Mpls and Chicago seeing some strength on hopes that we could see improving demand for wheat form shortfalls in Europe and the Black Sea Region. KC lost a bit of ground against Mpls. HRW had been the cheapest wheat had been the cheapest wheat on the board but not so much with recent basis appreciation in HRW. Spring wheat may be looked at as the better buy with selling KC against Mpls. Spring wheat planting is picking with favorable weather conditions. Soil temperatures are a bit chilly yet, but that does not seem to be stopping these guys.
- May closes: Mpls at $5.05 ½, up 1 ¾ cents, KC at $4.86 ¼, down 3 ¾ cents, Chicago at $5.48, up 5 cents.
- Weekly export sales were 400 tmt. Taiwan bought 220k tonnes of US million wheat, Japan bought wheat in their weekly food tender (21k US spring whet and 38k US HRW).
- Spreads: Mpls K/N 13 ¾ carry, Kansas City K/N 7 ¾ carry, Chicago K/N 1 ¾ inverse. Mpls July sits at a 25 ¼ cent premium to the KC July.
