Ami Heesch

Sep 15, 2020

Ami L Heesch  

Highlights

A bit of a setback was noted in the grain markets on a host of variables. Corn and beans saw a bit of profit taking while technical selling was noted in the wheat market. Oracle looks to become the tech partner, responsible for managing data of TikTok, while ByteDance plans to retain the majority ownership of its video app. Federal Reserves expected to keep interest rates near zero (meeting minutes expected to be released tomorrow afternoon). 

  • USDA small Grains Summary and Sep 1 Grain Stocks reports are scheduled for September 30th at 11 AM CDT.
  • The energy markets are mostly higher this afternoon with crude oil up 96  cents at $38.95/barrel.
  • The US$ up slightly at 93.07, the gold market down 1-2 bucks at 1953/ounce and CD$ a hair firmer at 0.75985.
  • DJIA barely hanging on, trading up 6 at 27999, the S&P uo 23 at 3406 and the NASDAQ up 122 at 11178. 

Corn

Corn prices tipped over on a bout of profit taking and forecasts for mostly favorable weather across much of the US Midwest. Losses were limited from this morning’s sale announcement. The December tickled $3.71 yesterday but failed to hold at or above that level.   

  • Closes:  December at $3.66 ¼, down 3 ¼ cents, March at $3.76, down 3 cents, July at $3.85 ½, down 2 ¾ cents.   
  • CIF premiums were 1-2 cents firmer for September and unchanged for October.
  • USDA announced the sale of 120k corn to Unknown for 20/21.
  • Spreads: Z/H 9 ¾ carry, Z/N 19 carry, Z/Z 20 ½ carry.

Oilseeds

Soybean prices saw a bit of profit taking after rallying above the $10 level. Prices dew additional pressure after the release of the NOPA crush report for August where beans reportedly crushed missed trade estimates by 3-4 million bushels. Weather forecasts suggest mostly favorable for soybean harvest activity this week.

  • Closes:  November at $9.92, down 7 ½ cents, March at $9.96 ¼, down 5 ¾ cents, July at $10.00, down 2 ¾ cents. The products were weaker with meal down 2-3 bucks and oil down 14 points.
  • CIF premiums were 2-3 cents weaker for September and October.
  • USDA announced the sale of 132k tonnes of beans to Unknown and 132k tonnes of beans to China for 20/21.
  • NOPA Crush report for August: 165.055 mb of beans crushed, oil stocks at 1.519 billion pounds and soymeal exports at 754,693 tons.
  • The canola market set back from it 2-year highs in consolidated type trade. Additional pressure came from borrowed weakness in the US soy complex and anticipation of increased farmer selling as harvest activity picks up. Gains could be capped from ides of potential crop losses after period of dry weather followed by frost.
  • Spreads: X/F 4 carry, X/H 4 ¼ carry, X/N 8 carry, X/X 31 ¾ inverse.

Wheat

The wheat market was on the defensive from a bout of technical selling and spillover weakness in the row crops. Chicago Dec climbed above its 200-Day MA but fell short of the $5.50 resistance level with a high of $5.47. there is a plethora of export business amidst ample supplies of wheat. The US remains uncompetitive in the world export arena. 

  • December closes: Mpls at $5.24 ¼, down 6 ¼ cents (contract low is $5.06 ½), KC at $4.67 ½, down 6 cents, Chicago at $5.38 ¼, down 7 ½ cents.
  • Paris milling wheat traded lower on spillover weakness in the US and Russians markets, along with ideas of slowing demand for French wheat.   
  • Black Sea wheat prices traded sharply lower, retreating from the past several days of higher prices.  Ideas are that the farmer will soon turn to selling along with a potential market shift in where the buyers look to source their needs from.
  • French wheat crop was revised down to 29.5 mmt versus 29.7 mmt previously.
  • Spreads: Mpls Z/H 13 carry (got out to 13 ¼), Kansas City Z/H 11 carry, Chicago Z/H 8 ¾ carry.