Early Market Talk

Report day has finally arrived and will at last see final US corn and soybean yield estimates. Quarterly stocks data also loom large and could prove as or more interesting than yield. Residual disappearance always a wild card.

Markets recovering some of yesterday’s price weakness this morning with CH19 up $0.01 ½ at $3.78 and SH19 up $0.01 ¼ at $9.14 ½ at 0630. Biggest overnight vol on corn (43K total) seen in some time.

Dow futures giving up another 130 points this morning with concerns over economic growth and trade issues. Global equity markets set up for their first weekly loss since December.

A Trump-Xi meeting ahead of the March 1 deadline appears off the table.

USDA reports at 11:00 this morning. Trade expecting a 1bpa decline in corn yield which fits historical patterns as well as a .3 bpa decline on the soybean yield. Trade on average expecting corn and soybean carryout to decline overall. Average guess on Brazil soy production down 5 mmt from the current 122 mt forecast from USDA.

More commercial discussions on carrying old crop beans into and through new crop ’19 harvest. Recall that starting with the CZ19 and SX19 contracts, per month storage rates at CME delivery houses will increase 3 cents per bu per
month. Historical charts and observations will obviously need adjusting to these new and higher levels. Quick look at SHSK this year has 80% of full carry near $0.14 ¼. New storage rates will take that to near $0.20 ¼. 

End users pounding the phones a little harder late week. Most commercials comfortable with sales made a few weeks ago on that round of basis push and content to see bids switch to the May contract in just under three weeks.

PNW corn basis up nearly 14 cents in two weeks. Higher freight almost completely negating the gain.

Article Written by:

Bruce Nelson