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MARKET TREND Mostly higher CZ up 2, SX up 4, WZ up 4

September 13, 2017 07:11 AM

HIGHLIGHTS

·       MARKET TREND—Mostly higher: CZ: steady; SX: up $.0425; WZ: up $.0250; KWZ: up $.0150.

·       MACRO: U.S. Markets appear to be taking a respite after recent gains.  ASIA—Mostly higher:  Nikkei, +0.45%; Shanghai, +0.18%; Hang Seng, -0.28%.  EUROPE: Mostly higher:  DAX, +0.05%; FTSE, -0.35%; CAC, +0.06.   WALL STREET—Futures are weaker—DOW, -20; S&P, -3.7528; NAS,-12.50.  EXTERNALS:  $ Index-.011 @ 91.615; Gold+$4.90@ $1,334 Oct crude:+$0.42 @ $48.65/bl.  Deliveries: SBM, 118; SBO, 340; RR, 35; C, 375; HRW, 35; SB, 0; SRW, 18

·       T-storm Weather: Better-organized rain chances exist within Thu.-Sun. across the northern Plains & far northwest Corn Belt, producing 0.50”-1.50”; most rain focuses on spring wheat areas that were harvested weeks ago, & only ~10% of U.S. corn & soybean production.  Otherwise, dry weather prevails through at least Sun.  Temps will be considerably warmer than normal over much of the next 10-14 days as coolness remains bottled in Canada, leaving highs in the 70s-80s-90s & free of a frost threat

·       CZ, unch @ $3.5150; CH, up $.0025 @ $3.64.  Production report generates heavy fund liquidation, 20 K                  

·       SX, up $.0425 @ $9.5475; SF, up $.04 @ $9.64755.  Funds: Sold 9 SB,  6 SBM, even SBO.  Board crush: $.86, +1; LY, $.80

·       WZ, up $.0250 @ $4.4450; WH, up $.0275 @ $4.6475. Fund buying totaled 3 K on Report Day

CORN/SORGHUM

·       USDA pegs U.S. corn ending stocks for 17/18 at 2.335 bbu, considerably above the average trade guess of 2.133 bbu

·       ATI Research: USDA Supply/Demand report contained nothing friendly for corn as the U.S. average yield was increased 0.4 bpa vs. the average trade guess of a 1.7 bpa decline; plus, domestic use for 17/18 was lowered 50 mbu

·       T-storm Weather: Rains return to U.S. corn next week when a moderately-strong system passes further south than recently, likely resulting in at least a round of rain in and adjacent the Corn Belt Sep. 18-22; 0.50”-1.50” is most likely

·       Ethanol margins: $0.30 per gallon—up vs. $0.26 last week but below $0.55 in 2016.  EIA report at 9:30 am CDT

SOYBEANS/WHEAT

·       USDA pegs U.S. soybean ending stocks for 17/18 at 475 mbu, above the average trade guess of 437 mbu

·       ATI Research: USDA Supply/Demand report pegged a 0.5 bpa increase in U.S. soybean yield vs. Aug. but the trade was looking for a 0.7 bpa decline.  However, both old- and new-crop usage was increased, underscoring strong demand

·       ATI Research: USDA Supply/Demand report shows record FSU-12 wheat exports of 57.5 MMT—up 1.5 MMT vs. Aug. 

·       T-storm Weather: Rain chances within Sep. 18-22 are lower with southwestward extent from U.S. Corn Belt, which may leave parts of the western HRW wheat areas of the central and southern Plains dry through next week

ENERGY

·       Firmer: CLV17+$.42 @ $48.65; EBX+$0.28 @ $54.55;EBX-QCLX-.09; RBV+.0085; NGV+.020; HOV, +.0032

·       EIA Report Estimates (API): crude oil, +3.7 (+6.2); Gasoline, -3.0 (-7.9); Distillates, -1.3 (-1.8)

·       Cash ethanol markets continued to show a mixed trendon Tuesday: Chicago added ½; New York and Tampa unchanged; Gulf down 2 ¼; Dallas off 1 ½; and LA was 3 lower at $1.68 ½ per gallon

·       Ethanol RINs were slightly weaker on Tuesday: 2016’s and 2017’s off 3/8 at 84 ½-85 ¾ 

·       The Oct RBOB/Oct ethanol spread closed $.0158 wide at+$.10630/gallon on Tuesday

  LIVESTOCK/POULTRY                               &nbs​p;     

·       Choice boxed beef values declined 77-cents on Tuesdayto $190.79, and are $1.66 lower compared to last week

·       ATI Research: USDA lowered 2017 beef production estimate 140 mil lbs v. Aug.; now forecast to be up 5.3% v. 2016

·       ATI Research: USDA increased 2017 pork production estimate 35 mil lbs v. Aug.; now forecast to be up 3.6% v. 2016

·       CME Lean Hog Index eased $0.54 Tue. to $67.37.  October futures plummeted $2.125 & are $7.92 below the index

Sources: Bloomberg, Dow Jones, AP, DTN, T-storm Weather

 



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