Ami Heesch

Jan 19, 2021

Highlights

Weakness across the grain markets on a bout of profit taking form beneficial rain events across South America. Losses limited in corn and wheat from the possibility of export curbs on wheat and corn. The oil market firmed ahead of the swearing in of President Elect Biden and stimulus optimism. The stock market rose on ideas that additional stimulus could be forthcoming.

 

  • The energy markets are mostly higher with crude oil up 64 cents at 53.0/barrel.
  • US$ down 0.258 at 90.506, gold up 8-9 bucks at 1838/ounce and the CD$ down 0.00035 at 0.7855.
  • DJIA up 139 at 20954, S&P up 125 at 30846 and NASDAQ up 195 at 13194.

                                                                                   

    Corn

    The corn market traded lower in sympathy with the soybean market. Losses were limited from decent export demand and the possibility that Ukraine may impose an export limit on their corn exports.

  • Closes: March at $5.25, down 6 ½ cents, July at $5.23 ¾, down 8 ¼ cents, December at $4.54 ¼, down 5 ¾ cents.
  • CIF premiums were unchanged for January.
  • The USD announced the sale of 100k tonnes of corn to Indonesia for the current marketing year.
  • The USDA announced to sale of 120k tonnes of corn to Japan for the current marketing year.
  • Weekly export inspections were reported at 877k tonnes, below what the trade was expecting (900 tmt-1.2 mmt).
  • Spreads: H/K 2 carry, K/N 3 ½ inverse, N/U 46 ½ inverse, Z/H 6 ¼ carry.

     

    Oilseeds

    The soybean market traded lower on beneficial moisture for South America, with a wetter pattern expected for SA next week. Prices drew additional pressure from weakness in the palm oil markets.      

     

  • Closes: March at $13.83 ½, down 33 ¼ cents, July at $13.67 ¾, down 33 ¼ cents, November at $11.87 ½, down 10 ¼ cents. The products were lower with meal down 12-13 bucks and oil down 18 points.
  • CIF premiums were 2-4 cents weaker for January.
  • USDA announced the sale of 132k tonnes of beans to China for the 21/22 marketing year.
  • Weekly export inspections were reported at 2.1 mmt, above what the trade was looking for (900 tmt-1.9 mmt).
  • Spreads: H/K 2 ¼ inverse (hit a high of 7 ½ inverse earlier in the session), K/N 131 ½ inverse, N/X 180 ¼ inverse, X/F 5 ¼ inverse.

     

    Wheat

    Wheat prices traded higher early in the session on rising export prices in the EU and Black Sea Region and increased world demand for wheat prior to Russia imposing export curbs on their wheat come mid-February. Prices retreated midday on sharp losses I the soybean market and spillover weakness in the corn market.

     

  • March closes: Mpls at $6.46 ¾, up 3 ½ cents, KC at $6.43 ¾, up ¾ cent, Chicago at $6.73 ¼, down 2 ¼ cents.
  • Weekly export inspections were reported at 277 tmt, near the low end of the trade expectations (200-400 tmt).
  • EU wheat prices were mostly steady awaiting planned Russian export tax on wheat. Decision is thought to be taking place next Monday.
  • Algeria and Pakistan are in the market for a jag of wheat. Japan is in the market for their routine food tender totaling 73k tonnes. The breakdown is 15k US white, 12k HRW, 25k HRS, and 21k Canadian spring wheat. Australian wheat was lot on the list.
  • Spreads: Mpls H/K 8 ½ carry, Kansas City H/K 3 carry, Chicago H/K 1 ¼ carry.