Ami Heesch

Dec 2, 2020

Highlights

Pfizer vaccine got approved for use in Britain. Equity markets mixed on economic uncertainty.  President elect says the Phase One Trade agreement with China will not immediately be canceled. Poor jobs data expected with the recent surge in Virus case throughout the US.

 

  • The energy markets are mostly higher with crude oil up 69 cents at 45.24/barrel.
  • US$ down 199 at 91.115, gold up 13 bucks at 1829/ounce and the CD$ up 0.00085 at 0.77385.
  • DJIA up 57 at 29881, S&P up 5-6 at 3666, NASDAQ down 16 at 12339.
  • StatsCan updated Principal Field Crop production report is scheduled for tomorrow.
  • The next USDA S&D report is scheduled for December 10 at 11 AM CT.

     

    Corn

    The corn market bounced higher after weakness the past few sessions, as overnight fund selling began to wane.  

  • Closes: March at $4.23 ½, up 2 ¾ cents, July at $4.26, up 2 cents, Red December at $4.07 ¾, up ¾ cent.
  • Gulf premiums were unchanged for December.
  • Trade estimates for weekly export sales: 800 tmt-1.6 mmt.
  • Weekly ethanol production declined 16k barrels per day to 974k barrels per day. Stocks saw another slight increase to 21.2 million barrels (levels not seen since last June).
  • Algeria tenders for optional origin corn.
  • Spreads: H/K 2 ¾ carry, K/N ¼ carry, N/U 16 ¼ inverse, N/Z 18 ½ inverse.

     

    Oilseeds

    The soybean market saw continued weakness on forecasts for more favorable weather conditions in the dry areas of Brazil. Bouts of profit taking, and fund long liquidation were noted throughout the session. Sizable fund length in the soybeans leaves the market vulnerable to additional selling. Prices drew underlying support from domestic crusher demand.

     

  • Closes: January at $11.53, down 9 cents, March at $11.54 ¾, down 8 ¼ cents, July at $11.49, down 9 ½ cents, November at $10.31 ¾, down 4 ¾ cents. The products were weaker with meal down 4-5 bucks and oil down 5 points.
  • Gulf premiums were unchanged for December.
  • The average trade estimate for tomorrow’s weekly export sales report: 400 tmt-1.2 mmt for beans, 100-300 tmt for meal and 8-40 tmt for soyoil.
  • Beneficial rains are forecast for Brazil over the next week while Argentina looks to be a bit drier over the next couple of weeks.
  • The canola market traded 2-3 bucks lower on profit talking after yesterday’s rally and weakness in the US soyoil market.
  • Spreads: F/H 1 2/3 carry, H/N 5 ¾ inverse, N/X 117 ¼ inverse (struck 136 ¼ the day before Thanksgiving).

     

    Wheat

    The wheat market bounced higher on the emergence of the bargain hunters, after the past few sessions of losses. Weakness in the US$ provided underlying support to the wheat market.  There was chatter that China may be on the hunt for HRW and/or SWW. Mpls gained on KC with the nearby sitting at a 2-cent premium to nearby KC.

     

  • March closes: Mpls at $5.55, up 5 ¾ cents, KC at $5.52 ¾, up 13 ¾ cents and Chicago at $5.88, up 10 ¾ cents.
  • Average trade estimates: 250-700 tmt.
  • There were zero deliveries against the December contract in Mpls,
  • EU wheat prices drew support from poor crop ratings in Russian wheat, while gains were limited from a big Australian wheat crop and strength in the Euro.
  • Spreads: Mpls H/K 8 ½ carry (10 ½ has been tickled a few times.......never a bad thing when one can get a dime out of Mpls, just saying), Kansas City H/K 5 ¾ carry, Chicago H/K 11 carry.