Ami Heesch

Sep 11, 2020

Ami L Heesch 

Highlights

The grains were mixed with fresh supportive USDA yield, production and ending stocks forecasts. Decent demand and hopes for decent demand kept support under the corn and beans while growing world production pressured the wheat market.   

  • StatsCan updated crop production report is scheduled for Monday, September 14, 2020.
  • USDA small Grains Summary and Sep 1 Grain Stocks reports are scheduled for September 30th at 11 AM CDT.
  • The energy markets are mixed with crude oil slightly higher at 38.18/barrel.
  • The US$ is weaker, down 0.057 at 93.277, the gold market is 14-15 bucks lower at 1942 and the CD$ is down 0.00105 at 0.7576.
  • DJIA up 127 at 27662, S&P down 7 at 3333, NASDAQ down 76 at 10843. 

Corn

Corn prices were higher on borrowed strength from the soy complex, along with reductions in yield, production and ending stocks.  We are still over 2.0 bb, which typically is not considered friendly. 

  • Closes: December at $3.69 ½, up 4 ½ cents, March at $3.79, up 4 cents, July at $3.88 ¾, up 3 ½. Dec 21 closed the week at $3.99, its high of the day.
  • CIF premiums were stronger, up 7 cents for September and up 5 cents for October.
  • Weekly export sales were reported at 1.823 mmt, near the top end of the trade estimates.
  • Talk is that China could be in the market for 10.0 mmt  to as much and 25.0-30.0 mmt of US corn for October forward.
  • World ending stocks for 20/21 were lowered 11.0 mmt, with the US being 10.0 mmt of that.
  • The Brazilian crop was raised 3.0 mmt to 110.0 mmt, while the Russian, Ukrainian, European and Canadian were lowered a bit.
  • Spreads: Z/H 9 ¾ carry, Z/N 19 ¼ carry, Z/Z 21 carry and K/Z 5 ½ carry.

Oilseeds

Soybean prices traded higher on demand and frost worries. Additional strength came from a lower yield, production and ending stocks forecast reported by the USDA in their monthly S&D report this morning. 

  • Closes: November at $9.97 ½, up 20 cents, March at $9.98, up 18 cents (the high of the  day and testing $10), July at $9.96 ¼, up 13 ¾ cents. The products were sharply higher with meal up 7-8 bucks and oil up 57 points.
  • CIF premiums were mostly unchanged for Sep and Oct.
  • Weekly export sales for beans were reported at 3.162 mmt (2.5 carryover from 2019/20), in line with trade estimates. Meal sales were above the top end of trade estimates at 360 tmt, while oil sales saw cancellations resulting in sales of 1 tmt.
  • USDA announced another sale of 262k tonnes of beans to China and 222k tonnes of beans to Unknown for 20/21.
  • Brazil bean production for 2019/20 was raised 2.0 mmt to 126.0 mmt and 20/21 production was forecast at 133.0 mmt (1.0 mmt above earlier private estimates).
  • US ending stocks came in below 600 mb with 19/20 at 575 mb and 20/21 at 460 mb.
  • The canola market traded higher on sharp rallies in the soy complex, despite increased selling. November canola closed the day up 6.20 at $516.00 (a new contract high).
  • Spreads: X/F 3 ½ carry, with ideas it goes to even money or an inverse, X/H ½ carry and the balance of the deferred spreads at an inverse.

Wheat

The wheat market finished lower on lack of fresh supportive news. Global supplies grow while US supplies stand still. Mills are flush with wheat and US is not competitive in the world export arena. Japan was not in this week and there is no sign of Egypt, although the trade was half expecting them to show up this afternoon. Spring wheat harvest is about wrapped up and the lion’s share of the crop has been put away on the farm. 

  • December closes: Mpls at $5.31, down 4 ½ cents, KC at $4.72, down 2 cents, Chicago at $5.42 ½, down 5 ¾ cents.
  • Weekly export sales were reported at 484 tmt, mid-range of the trade estimates.
  • Paris milling wheat traded slightly lower on increased global production ideas.   
  • US wheat ending stocks were unchanged, while world ending stocks saw a 2.6 mmt increase on account of Australia and Canada.
  • Spreads: Mpls Z/H 13 ¼ carry, Kansas City Z/H 11 carry, Chicago Z/H 8 ¾ carry. Mpls Dec carries a 60 cent premium to KC Dec and a 10 ½ cent discount to Chicago Dec.