Corn: Steady to up 1
Soybeans: Up 1 to 2
Wheat: Mixed
(FarmProgress) – Grain futures are mostly a little higher this morning in a low-volume overnight session typical of the run-up to a holiday weekend. Markets trade regular hours Thursday but close for Good Friday in the U.S. with many countries also off for Easter Monday.
Another storm moving through the western Corn Belt this morning won’t give many growers relief from the weather though the central and northern Plains will see less moisture in the next week. The official 6 to 10 and 8 to 14-day forecasts out yesterday called for a drying trend in the East with the latest updates from the ensemble model this morning even more emphatic with that outlook, which is accompanied by above normal temperatures.
Progress remains slow planting 2019 crops, but not uniformly stalled. A grower in southern Kansas reported all corn planted with 40% of the crop emerged, though conditions were only “fair,” or average. But another Kansan east of Topeka said winter wheat was in very poor condition after late planting after a wet fall. “Has been too wet to spray or plant,” was the post. “Weeds growing extremely fast, looks tough all the way around.”
Other markets are mixed today. Stocks got a little traction in Asia from China’s new measure to stimulate its economy, but ns about trade talks with the U.S. remains scarce. Stocks were also mixed in Europe, though U.S. index futures point to a firm open on Wall Street today as investors focus on corporate earnings. The dollar is a little weaker and money managers are shedding other safe havens including Gold and Treasuries as well.
Crude oil held its move above $64 a barrel ahead of today’s inventories numbers. The private survey by the American Petroleum Institute showed lower crude stocks and higher diesel supplies lasts week, the opposite of guesses from analysts.
Corn prices are little changed following two-sided trade overnight. Futures were able to recover after a lower open after holding the bottom of a new short-term channel created by Tuesday’s downturn.
News is light, befitting a quiet market. Taiwan as expected filled a tender for a load of corn that can be sources from Brazil or the U.S. in a competitive world market. Ethanol production details from last week will show how plants responded to margins that are trying to stabilize with the help of higher gasoline and crude oil values.
The preliminary report from the CBOT showed daily futures volume down 9% yesterday to 437,613 while open interest was up 23,317 on active new fund selling. Options volume more than doubled to a healthy 87,720, two-thirds of it calls as traders rolled up out at-the-money May calls that expire at the end of next week while adding $3.55 May puts. Implied volatility in at-the-money December options rose to 19.89%.
Overseas markets are better. May futures in China gaped higher, gaining 4.7 cents to $7.079 and June Paris futures in midday trade gained 2.2 cents to $4.772 after adjustments for volumes and currencies.
Bottom line: Corn is trying to hold on for a planting rally, but traders aren’t biting yet, believing the crop can be planted quickly thanks to modern technology. Large old crop supplies are also limiting gains.
Soybeans are trying to hang on to a modest rebound following Tuesday’s break below two-week chart support. Lack of any big headlines from the trade talks with China continues to represent a dark cloud for a market struggling with weather issues that could increase soybean acres this year.
Concerns are also building over slowing Chinese consumption of soybeans due to the devastation to its hog herd caused by African swine flu. While that could be a boost for U.S. pork exports, it means China may not need to buy many more soybeans from the U.S. this year even with successful conclusion to a new trade deal. China already has nearly 300 million bushels of unshipped purchases from the U.S. on the books.
The preliminary report from the CBOT showed daily futures volume up 14% yesterday to 223,687 while modest new fund selling boosted open interest 20,125. Options volume more than doubled to 56,046, 54% of it puts as traders liquidated out-of-the-money May strikes that expire at the end of next week while adding the July $9.10 and $8.90 puts. Implied volatility in at-the-money November options rose to 15.61%.
Vegetable oil prices in Asia moved higher today. May soybean oil futures in China are at 36.594 cents per pound while May palm oil futures in Malaysia gapped higher to settle up a quarter cent at 23.37 cents.
Oilseed markets internationally are mixed. May soybean futures in China gained a half-cent to $13.53, May rapeseed futures in Paris midday trade rose 1.9 cents to $9.237 and Winnipeg canola overnight eased a penny to $7.721 after adjustments for currencies and volumes
Bottom line: Old crop carryout is still burdensome. With more acres likely than USDA found March 29, rallies on a trade deal with China are the best hope for making old crop sales.
Wheat prices are mixed after Tuesday’s tumble to new lows in the hard wheats. Winter wheat contracts moved higher overnight with inside days but Minneapolis was lower on improving forecasts this week for the northern Plains that could aid seeding.
More rains moving through the Black Sea region also weigh on a market that has enough wheat already as it is. Traders mostly shrugged off a shift drier in Central and Eastern Europe.
Overseas markets tried to hold firm. May futures for Eastern Australian Wheat settled steady at $7.064 and May futures in Paris midday trade slipped a half cent to $5.72 after adjustments for currencies and volumes.
Volume in soft red winter wheat increased by 17% yesterday to 222,519 while open interest gained only 1,608 despite active new fund selling. Options volume more than tripled to 43,539, 52% of it puts as traders liquidated near-the-money May puts that expire at the end of next week. Implied volatility in at-the-money July options rose to 21.28%.
HRW volume was 35% higher at 89,851 on open interest that fell 2,704.
Bottom line: Acreage in 2019 is the lowest on record but winter wheat looks off to a very good start. And export demand remains limited in a highly competitive world market.
