Joe Barker

Oct 16, 2020

Joe Barker

 

Highlights

  • The US Radar summary shows a few small areas of moisture falling in parts of Washington, Idaho, Montana, North Dakota, South Dakota, Kansas, Minnesota, Iowa and Wisconsin.  And there is a long line of showers that stretches from Vermont to Texas. 
  • The US Drought monitor, updated yesterday, now shows the drought conditions that stretch across the US are continuing to intensify.
  • Over the last 24 hours in South America, the Brazilian states of Parana, Mato Grosso Del Sul and Sao Paulo enjoyed up to ¾” in some areas, but the rest of Brazil was mostly dry.   The Argentinian states of Santa Fe, Cordoba, Entre & Rios and Corrientes received between ¼ and ½ of an inch of rain.   6 to 10-day forecast in Brazil is still calling for widespread rains across most of the grown region.  However, the 6 to 10 day forecast for Argentina is drier for Santa Fe and northern Cordoba.   
  • The Brazilian government is set to discuss a proposal that would temporarily eliminate the 8% tariffs on corn and soy imports from countries outside of the Mercosur trade bloc, which includes Paraguay, Uruguay & Argentina. 
  • As of 6:10 AM: Crude oil is down 39 cents at $40.57, Dow futures up 54 ticks at 28,440, and the U.S. $ index down 116 ticks at 93.7400.                          

 

Corn

  • Overnight December 2020 corn trades as high as 409, this is the highest trade of front month corn since August 12, 2019.   
  • Export sales totaled 655.2 TMT, the trade estimate is for between 600 TMT and 1.4 MMT. 
  • Spreads are tighter this morning: Z/H 3 ¼ cent carry, Z/K 4 ½ cent carry, Z/N 4 ½ cent carry, and Z/Z 10 cent inverse.

 

Outlook: 2 to 4 higher to start: calendar spreads are tighter again this morning.

 

Oilseeds      

  • Mid-session yesterday, NOPA reported September’s crush was a record high 161.49MB.  This compares to a trade guess of 160.8 and last year’s pace of 152.6.
  • Soybean export sales were reported at 2.63 MMT (1.5-2.5 MMT).  Meal sales were 152 (100-350).   Bean Oil sales were 1.4 (0-25).
  • In China, soybean futures were up 32 ½ cent overnight and soymeal was up 1.20/metric ton on the Dalian Exchange.
  • Malaysian palm oil futures were unchanged settling at 2,866 ringgits per tonne.
  • Spreads: X/F even money, X/H 15 ½ cent inverse, and X/N 20 ¾ cent inverse, and X/X 90 ½ cent inverse.

 

Outlook:  5 to 8 higher: 2.6 MMT of sales is impressive. 

 

Wheat

  • Front month SRW futures are trading at their highest price since Dec of 2014, when CBOT wheat futures topped out at 6.77. 
  • On the front month, CBOT wheat futures are trading 63 ¼ above MGE wheat futures.  This is the widest this spread has been in August 2007, when CBOT wheat traded as much as 95 cents above MGE. 
  • Wheat export sales totaled 528.5 TMT for 20/21 + 71.2 TMT for 21/22, this compare to a trade guess of 200-600 TMT.
  • Paris wheat futures were up 0.75 (0.37%) overnight.
  • Spreads: Chicago Z/H at 3 cent carry, KC Z/H at 9 ¼ cent carry, and MW Z/H at 12 ¾ cent carry.

 

Outlook: 3 to 8 higher: CBOT wheat futures are leading the way again this morning.