World Perspectives
feed-grains soy-oilseeds wheat

PM Post - Mixed Day

THE OPEN

May beans:  3 higher

May meal:  3.80 higher

May Soyoil:  2 lower

May corn:  1 1/2 lower

May wheat:  9 1/4 higher

The market opened in line with trade expectations, as traders cleaned up positions into the weekend and report day next week.  The markets were mixed at the open with soyoil turning into a two-sided trade, as profit-taking was noted for meal as well.    Spreads in general saw a correction, as volumes are declining along with open interest as more traders move to the sidelines in the wake of the pandemic.  For today, oilshare prices were steady/better as traders unwound prev. buy meal/sell soyoil trade.  Prices were fairly subdued as a negative day of macro trade persists.

SOY

  • The soy complex started the day on a firm note but profit-taking sent bean and meal prices lower for the session.  
  • May soyoil traded either side of even, but spreaders decide to unwind previous buy meal/sell soyoil trade.  May soyoil holds lower support at 2633c to rally back towards 27c, recent market highs.  July crush trades slightly lower at 1.15c/bu while oilshare is at 29.81%, higher than the 29.50% level from the start of the day.  
  • May beans chop around on both sides continuing to pivot around the $8.80 level.  Beans will continue its sideways chop, with values for US PNW beans still at an $8/mt premium to Brazil.  
  • In domestic cash markets, the last part of this week featured a more relaxed eastern bean basis, indicating a better round of US farmer selling on this week's rally.
  • Spreads spent the day in consolidation trade, with Jul/Nov trending firmer at a 6 3/4c inverse from 4 3/4c, and technically well bid.  Jly/Dec meal firms to $9.40 from $7.50, with some noted profit-taking, but also in well bid territory.  
  • Though meal prices are back and filling, the problems relating to sudden tightness in meal supply as Argentina grapples with transportation issues is not going away.  Look for meal to stay supported even as prices weaken with profit-taking activity.  Lower end of the trading range for May meal is $313.00, which was a swing point on the way up and now on the way down.  

GRAINS

  • Corn prices started the day on a firm note, but funds sold a higher start as ethanol futures fall linked with a lower crude oil trade.  
  • Scott Irwin from the Univ. of Illinois stated that the price at the Iowa plant level has declined $0.32 per gallon, or 26% since late Feb. 
  • China continues to make corn purchases, with traders speculating that the sale to unknown this morning could be one of them.  However, that did little to garner any fanfare.  
  • Wheat values chopped around as well, but still maintained a mostly positive stance as Russia appears ready to restrict exports, proposing a 7 mmt quota from April to June.  
  • Egypt starts their procurement season in mid-April, and breaks in US prices may still attract the business.  Taiwan purchased just under 100 mt of US wheat, which helped prices to remain steady to higher tone, though some traders were noted as locking in bullish profits.  
  • May wheat/corn trades up to 2.40c from 2.23 3/4c as corn prices continue to weaken into the midday hour.   Wheat spreads firm as well, with May/July inverse trading up to 24 1/4c from 10 3/4c.  July/Dec corn was trading into 13c from 14c, while May/July corn trades from 5 3/4c to 6 1/2c.  

AT MIDDAY THE MARKETS ARE AS FOLLOWS:

                                                         HI                            LO

May beans:  4 lower               8.88 3/4                   8.75 1/4

May meal:  1.50 lower                    328.10                     320.70

May soyoil:  14 higher                   2684                        2633

May corn:  5 lower                       3.50                         3.42 3/4

July wheat:  2 higher                   5.68                         5.52 1/2

July canola:  1.40 lower              473.00                      470.00

OUTSIDE MARKETS

The stock market is down over 800 pts. as Covid-19 continues.    University of Michigan noted that consumer sentiment eroded by 11.9 pts from the 24-month high reading in Feb. at 101.0.  Crude continues to work lower with the EIA estimating world-wide demand lower by an estimated 20 bbl/day during this crisis.  

CLOSING COMMENTS

Major trends remain higher wheat/lower corn, and higher meal/lower soyoil.    Funds have had a tendency to sell corn into the last few major reports, and appears as though they are ready to go into sell mode on the back of struggling ethanol and energies, despite Chinese purchases.  

Next week the report will be revealing, and we will all be a little smarter after the numbers are released.  The commitment-of-trader's report will be released tonight, and no doubt that the funds are going into the report with minimal positions everywhere but corn, where they maintain a decent sized short.  With weaker macros providing weight, rallies in corn will be taken as selling opportunities as the major trend lower may have stalled, but could pick up steam at any time.

If the report is bearish on March 31 and prices are on their lows, could look for a sell-the-story and buy -the-fact trade.  Next input will be weather as we head into planting time.   If funds get too short corn and a planting problem begins, the markets can turn very fast.  

Have a good weekend..........

 

WPI on Twitter

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