Ami Heesch

Jun 29, 2020

Ami L Heesch

 

Highlights

The grain markets garnered support from outside markets and position evening ahead of the USDA data release tomorrow.    

  • Short trading week this week. Grain markets close early on Thursday (12:05 PM for grains, 12:30 pm for mini grains and 12:15 PM for Mpls), and remain closed Thursday evening and Friday. Trade resumes Sunday at 7 PM CDT.
  • USDA to release its Fats and Oils report this Wednesday at 2 PM CDT. The average trade estimate for beans crushed during the month of May is at 180.7 million bushels (180.0-182.0), with oil stocks at 2.372 billion pounds (2.250-2.450).
  • The energy markets are stronger with crude oil up 1.15 at 39.64/barrel.
  • The US$ is slightly higher at 97.48, the gold market is up 2 bucks at 1782/ounce and the CD$ is weaker at 0.7317.
  • DJIA was stronger, up 568 at 25583, S&P up 40 at 3047 and NASDAQ up 117 at 9874. 

Corn

The corn market traded higher on a bout of month end/quarter end short covering and strength from the energy and equity markets. Prices drew additional support from a small reduction expected in tomorrow’s acreage report. There were rumors that China might be in the market for US corn, although there has been no confirmation of that. 

  • Closes: July at $3.25 ½, up 8 ½ cents, September at $3.28, up 8 ¼ cents and December at $3.34, up 8 ¾ cents.
  • Weekly export inspections were 1.2 mmt, at the top end of what the trade was expecting.
  • Crop conditions on par with expectations at 73% G/E, up 1% from last week. 4% silking.
  • Weather forecasts call for above normal temperatures with beneficial rain events across the US Midwest, just a few weeks ahead of the critical pollination period.
  • Spreads: N/U 2 ½ carry, U/Z 5 ¾ carry, Z/H 10 ½ carry, Z/N 23 ¼ carry.

Oilseeds

The soybean market traded slightly higher from strength in the oil market and outside influences. Prices drew additional support from short covering ahead of the USDA acreage and stocks report. Gains were limited from mostly favorable weather conditions and ideas of a decent crop in the making. 

  • Closes: July at $8.66, up 1 cent, August at $8.61, up 1 cent, November unchanged at $8.61 ¼.
  • Weekly export inspections were 325 tmt, in-line with  trade estimates.
  • Crop conditions up 1% from last week at 71% G/E.
  • The canola market traded higher in sympathy with the US soyoil market and weakness in the CD$.  Gains were limited from beneficial rains across the prairies.
  • StatsCan estimated their canola acreage at 20.8 million acres, down slightly from last year.
  • Spreads: N/Q 5 inverse, N/X 5 inverse, Q/X 1 ¼ carry, X/F 3 ¼ carry, X/H ¾  carry, X/N 11 ½ carry.

Wheat

Wheat prices were mostly higher, bouncing back from last week’s selloff, with the emergence of the bargain hunters. Additional support came from improving demand including rumblings that China might be in the market for some wheat.  Algeria and Jordan are in for a jag of optional origin wheat. Mpls spot floor bids rolled to basis the Sep this afternoon (60/2) 13.5s at +115, 14.05 singles from MT traded @ +211. 

  • July closes: Mpls at $4.97, down 1 ½ cents, KC at $4.27, up 5 ¾  cents, Chicago at $4.85, up 11 cents.
  • Weekly export inspections were 515 tmt, mid-range of what the trade was looking for (181 spring, 226 HRW, 28 SRW, 80 white).
  • Crop conditions for spring and winter wheat down 6% and unchanged at 69% G/E and 52% G/E respectively.
  • Winter wheat harvest seen at 44% complete (40-55).
  • EU wheat prices traded higher on spillover strength in the US Chicago market.
  • StatsCan pegged their wheat acreage at 25.0 million (spring wheat at 17.9 million and durum at 5.7 million).
  • Spreads: Mpls N/U 13 ¼  carry, N/N 58 ¾ carry (4.895 cents per month), U/Z 14 ½ carry, Z/H 14 ½ carry......Kansas City N/U 8 carry, N/N 45 ¾ carry, U/Z 12 ½ carry, Z/H 12 ¼ carry.

 

Spring Wheat Conditions 2020
Date MN ND SD MT Total
6.28.20 80 59 67 81 69
6.21.20 81 69 77 85 75
6.14.20 88 78 70 84 81
6.7.20 83 84 64 84 82
5.31.20 81 82 74 85 80