Ami Heesch

Feb 23, 2021

Highlights

The soybeans moved sharply higher on tight stocks, strong demand, and harvest pickles in SA from ongoing rain events. The wheat market was mixed with a bit of profit taking and technical buying. Wall Street traded on the defensive from weakness in the Big Tech stocks. The oil market saw strength from ideas of easing restrictions from the virus that has plagued countries around the globe since last March.

 

 

  • Cold storage report: Frozen Beef stocks at 519 million pounds Jan 31......pork bellies at 31.250 Jan 31 and frozen Orange Juice at 0.636 billion pounds.
  • The energy markets saw two-sided trade with the April crude oil up 29 cents at 61.99/barrel.
  • The US$ looks to have rolled over into greener territory, trading up 0.153 at 90.163, the gold market retreated, trading down 5 bucks at 1802/ounce and the CD$ is up a freckle at 0.7941.
  • DJIA down 39 at 31482, S&P down 5 at 3869 and NASDAQ down 190 at 13341.
  • The next USDA S&D report is scheduled for March 9 at 11 AM CST.
  • The biggie is expected to be the USDA March 31 Planting Intentions and March 1 Grain stocks.

                                                                                   

    Corn

    The corn market closed firmer, in sympathy with the soybean complex. Persistent rain events raise concerns of getting the corn planted in time for a reasonable harvest this fall. Gains felt pressure form bouts of technical selling and expectations for a record corn crop in Brazil, despite the slowed start.

  • Closes: March at $5.53 ¾, up 2 ¾ cents, July at $5.42 ½, up 1 cent and December unchanged at $4.69 ¾.
  • Gulf premiums were 5cents weaker for Feb.....1 cent weaker for FH Mar and unchanged for LH Mar/ A/M.
  • Brazil’s Safrinha corn crop is expected to be above last year, despite the late start and the fact that nearly 25% of the crop is getting planted outside the optimum time to max out production potential.
  • Brazil farmers are expected increase the overall area planted to corn this year (19.44 million hectares versus 18.5 million hectares). Total production estimated at 108.2 mmt versus 102.52 mmt previously.
  • Spreads: H/K 1 ¼ inverse, K/N 9 ½ inverse, N/Z 73 inverse, Z/H 6 ¾ carry.

     

    Oilseeds

    The soy complex traded higher on persistent rain showers across Brazil, continuing the delay of their soybean harvest. Farmers appear to be unwilling sellers at current price levels. Much of the crop has already been sold at various levels below the current market and demand continues to be strong. China keeps a healthy appetite for beans and meal as they are said to have nearly rebuilt their hog herds to that of pre ASF. 

     

     

  • Closes: March at $14.06, up 22 ¼ cents, July at $13.94 ½, up 17 ½ cents, November at $12.22, up 10 ¼ cents.
  • The products finished firmer with meal up 3-4 bucks and oil up 135 points.
  • Gulf premiums were mostly unchanged for Feb/Mar/Apr/May.
  • Spreads: H/K 2 ½ carry, K/N 14 ¼ inverse, N/Q 41 ½ inverse, Q/X 131 ½ inverse, X/F 5 ¾ inverse, X/H 37 inverse.

     

    Wheat

    Mixed bag in the wheat market with Chicago coming across the finish line in positive territory. KC was under the gun on technicals, bouts of profit taking some ideas that the declines in crop conditions (reported yesterday afternoon) were not as harsh as trade was expecting.

     

  • March closes: Mpls at $6.36, down 1 ¾ cents, KC at $6.41, down 3 ½ cents and Chicago at $6.65 ¾, up 1 ¾ cents.
  • The Philippines seek 145k tonnes of feed and million wheat for Apr/June shipment (after passing on last week’s tender).
  • Paris milling wheat traded slightly higher as trade weighs crop damage to the US and EU wheat crops after last week’s big chill across the areas.
  • Spreads: Mpls H/K 12 ½ carry (77% of full carry at 16.29 cents) .....Kansas City H/K 6 ½ carry....Chicago H/K 4 ¾ carry.