Ami Heesch

Nov 19, 2020

Please take time to check on your open deck for Dec orders that can be canceled (futures and options). Things can get a bit crazy during holiday / shortened trading weeks.

 

Highlights

We saw a turnaround day in the markets on bouts of either technical selling, profit taking or both.  Wheat continues to take cues from the action in the corn and soybean markets. Significant increases in COVID-19 cares around the globe has many areas renewing their restrictions placed back in Mar/April. Travel for the holidays are expected to be down quite a bit as the American folks are asked for their participation in warding off the spread of the virus by refraining from hosting major holiday gatherings. Jobless claims were reported over 700k again this week with unemployment rate remaining at higher levels.

 

  • The energy markets rolled into the greener side of life with crude oil up 19 cents at $41.96/barrel (tickling $42).
  • US$ has tuned slightly lower at 92.30, gold down $10 at 1864, and the CD$ down 0.00105 at .76535.
  • DJIA up 24 at 29463, S&P up 10 at 3575, NASDAQ up 102 at 11903.
  • First Notice Day for Dec futures is Nov 30 with longs reported at the end of next week.
  • Short trading week next week with the Thanksgiving Day Holiday. No markets Wednesday evening, or Thursday. Trad resumes at 0830 hours on Friday November 27.

     

    Corn

    The corn market took a break from the recent moves higher, as bouts of profits were being taken ahead of the weekend. Weekly export sales were decent.  There are concerns about slowing feed needs, and reduced usage of biofuels and ethanol as the spiraling virus cases around the world result in renewed lockdowns of eating and drinking establishments and reductions in folks driving around.

  • Closes: December at $4.22 ¾, down 3 cents, March at $4.27 ½, down 3 cents, July
  • Weekly export sales were reported at 1.1 mmt, above trade estimates of 600 tmt-1.1 mmt.
  • The 2nd corn crop planting is said to be within its ideal window, and corn values are at fairly decent levels. Rains for Mar/Apr are thought to be the key issue versus planting window.
  • Spreads: Z/H 4 ¾ carry, H/K 2 carry.

     

    Oilseeds

    The soybean market continued its trek lower on a bout of profit taking ahead of the weekend. Concerns of overbought conditions were offset from processor and exporter demand lurking overhead.  

  • Closes: January at $11.78, up 2 ¼ cents, March at $11.76, up 1 ½ cents, July at $11.68 ½, up 1 ¼ cents, November at $10.51, down ½ cent.
  • Weekly export sales were reported at1.4 mmt, above what the trade was looking for (600 tmt-1.2 mmt).
  • Average ideal planting window for Brazil planting is from mid Oct to mid Nov and planting progress is ahead of the 5-year average despite adverse weather conditions so far.
  • SA expected to see more chances for rain events j=next week.
  • Spreads: F/H 1 ¾ inverse, H/N 7 ¾ inverse.

     

    Wheat

    Follows row crop action and lack of supportive news. Improving chances for beneficial rains, in the US Plains this weekend, provided additional pressure to KC. Prices drew additional pressure from the Australian wheat harvest taking place. Harvest progress was last estimated near 50% complete with reports of above average yields. Total crop is estimated at 32-33 mmt.      

  • December closes: Mpls $5.46, down 4 ½ cents, KC at $5.49 ¼, down 8 ½ cents, Chicago at $5.93, down 4 ¼ cents.
  • Weekly export sales were disappointing at 192 tmt (below trade expectations of 250-600 tmt).
  • EU wheat prices cool off a bit, following in the footsteps of the US markets.
  • Spreads: Mpls Z/H 16 ¾ carry, Kansas City Z/H 8 carry, Chicago Z/H 7 carry.
  • Mpls gained on KC with the Dec sitting at a 3 cent discount to KC Dec.