Ami Heesch

Oct 26, 2020

Ami L Heesch 

Highlights

  • Tropical Storm/hurricane Zeta developed over the weekend and is expected to bring heavy rains to Florida, Louisiana and North Carolina by Wednesday.
  • The US$ strengthens on significant increases in the CoronaVirus over the weekend and fading optimism for an agreement on the stimulus aid package.
  • First Notice Day for November futures is Friday, October 30th with all long positions being reported after the closes on the 29th.
  • Daylight Savings Time ends Sunday, November 1st (turn clocks back 1 hour).
  • The next USDA S&D report is scheduled for November 10th at 11 AM CT. 

Corn

  • Corn prices traded lower in sympathy with the wheat market and the US$.
  • December open interest was down nearly 29k contracts.
  • Ukraine corn crop reduced to 30.0 mmt from adverse weather conditions. This compares to 35.9 mmt previously.
  • Taiwan seeks 65k tonnes of optional origin corn for Jan/Feb shipment.
  • Harvest progress is estimated at 70-75% harvested compared to 60% harvested last week.
  • Spreads: Z/H 1 ¼ carry, Z/N 1 ½ carry, Z/Z 25 inverse, H/K 1 carry.  

Outlook: Weaker tone on spillover weakness in the wheat market and a stronger US$.

Oilseeds   

  • Soybean prices opened 3-4 cents higher on followthrough strength from last week. Prices turned lower on technicals, with November trading unchanged to ½ cent higher.  
  • November through May climbed to new contract highs overnight.
  • The products are mixed with meal down 2-3 bucks and oil up 61 points.
  • China’s soybean imports for September were reported at 9.8 mmt, which is said to include 1.17 mmt from the US. 
  • Palm oil futures for January were up 124, at 3,066 ringgit on strength in Chinese and US soyoil markets.
  • China bean prices were firmer with their No1 beans up 37 cents and their No2 beans up 7 cents.
  • Us harvest progress is estimated at 85-90% complete versus 75% last week.
  • Rain events in the northern and southern parts of Brazil should benefit the corn and bean crops. Argentina sees little chance for moisture this week. Extended forecasts look a bit wetter for both Brazil and Argentina.
  • Spreads: X/F 2 ¾ inverse, F/H 13 ½ inverse. 

Outlook:    Choppy trade with focus on beneficial moisture for SA.

Wheat

  • Wheat prices traded lower on improving rain events in Russia.
  • Pakistan tenders for up to 320k tonnes of optional origin wheat.
  • South Korea bought 50k tonnes of optional origin feed wheat for March shipment at $268.84/tonne C&F.
  • Syria looks to purchase up to 200k tonnes of soft wheat from the Black Sea Region. Militias are thought to be preventing their farmers from selling their wheat, so they are looking to source inventories from outside their country.
  • Winter wheat planting progress is expected to be 85-90% complete versus 77% last week.
  • Spreads: Mpls Z/H 8 ½ carry, Kansas City Z/H 7 ¼ carry, Chicago Z/H ¼ carry. MWZ sits at a 16-cent premium to the KWZ. 

Outlook:  Weaker tone on Russian rain events, technical selling and strength in the US$.