Ami Heesch

Oct 27, 2020

Highlights

  • US$ turns slightly lower as investors move to the sidelines ahead of next week’s US Presidential election and CoronaVirus concerns.
  • The energy markets a re mostly higher with crude oil up 32 cents at 38.89/barrel.
  • US$ down 137 at 92.91, the gold market down 1-2 bucks at 1902, CD$ up 0.00195 t 0.75975.
  • DJIA up 100 at 27681, S&P up 15 at 3409, NASDAQ up 69 at 11561.
  • First Notice Day for November futures is Friday. Long positions reported after the close on Thursday. 

Corn

  • The corn market traded higher on demand and harvest progress below what the trade was expecting.
  • Harvest progress was reported at 72% versus 60% last week and 56% on average.
  • Taiwan bought 65k tonnes of US corn at $247.38 over the Chicago May, for Jan/Feb shipment.
  • South Korea’s NOFI purchased nearly 203k tonnes of optional origin corn for Mar/Apr shipment at $262.60/$253.40/$250.20/tonne C&F.
  • Spreads: Z/H ½ carry, Z/N ¾ carry, Z/Z 25 ¾ inverse.  

Outlook: higher trade to continue on weakness in the US$, Demand and harvest activity 

Oilseeds   

  • The soy complex was mixed with beans and oil setting back from recent highs on a bout of profit taking and meal trading higher on demand and tightening supplies. Loss were limited in beans at the harvest progress was less than what the trade was expecting.
  • Harvest progress was reported at 83% versus 75% last week and 73% on average.
  • Palm oil closed down 1 at 3065 ringgit.
  • China’s beans were higher overnight (No1 up 28 cents and No2 up 8 cents). Palm oil ws up 38 points.
  • Brazilian soybean plantings advance to 23% as of last Thursday amidst recent rain events. Seeding is expected to pick up as more rains are expected to move through the country in the coming weeks. Production is estimated near 132.0 mmt.
  • Spreads: X/F 4 ¼ inverse, F/H 14 ¾ inverse. 

Outlook: slightly easier on a bit of profit taking, with losses limited from strong demand and harvest activity  

Wheat

  • The wheat market bounced overnight on lower than expected winter wheat conditions. Gains could be limited from increased moisture in the Black Sea Region and the US Southern Plains.
  • Planting progress was reported at 85% compared to 77% last week and 80% on average.
  • Winter wheat conditions were reported at 41% G/E, well below what the trade was expecting.
  • Spreads: Mpls Z/H 11 (46% of full carry at 24 cents), Kansas City Z/H 7 carry, Chicago Z/H 1 inverse. 

Outlook: rebound higher on crop conditions and harvest progress