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TRENDS Firmer CK, Up 1 , SK, Up 1, WK, Up 4

April 17, 2019 07:02 AM

HIGHLIGHTS

  • TRENDS—Firmer: CK, +$.0025; SK, +$.0175; WK, +$.03; KWK, +$.0375 
  • What caught my eye: Profitability of soybeans in Brazil are said to have fallen to levels which will likely discourage acreage expansion in the coming year.  That being said, numbers from Safras suggest they may still provide a better return than corn
  • More earnings reports are scheduled for release today.  Asia: Mostly higher--Nikkei, +0.25%; Shanghai, +0.29%; Hang Seng, -0.02%.  EUROPE: Higher—DAX, +0.24%; FTSE, +0.03%; CAC, +0.24%.  WALL STREET—Futures are firm--DOW, +25; S&P, +5.25; NAS, +21.25.  EXTERNALS: June crude: +$.38 @ $64.57; Gold:  +$1.10 @ $1,278; $ Index, NA
  • T-storm Weather: Scattered rain & thunderstorms occur today-Thu. within much of the central U.S., & especially the Corn Belt, Delta, southeast KS, & northern OK where 0.50”-1.50” falls, & the Dakotas where 0.25”-0.75” is expected.  Most areas begin to dry Fri., except IN & OH where it continues to rain.  The next system produces a few showers in the Dakotas Sat.-Sun., then interacts with higher humidity in the central Plains & northwest half of Corn Belt to generate scattered thunderstorms Mon.-Tue.
  • CK, up $.0025 @ $3.5925; CN, up $.0025 @ $3.68.  Weather worries fade; weak demand outlook, funds sell 4 K    
  • SK, up $.0175 @ $8.8975; SN, up $.0175 @ $9.0350  Funds: Sold 6 SB, 5 SBM & 1 SBO.  Board Crush: $1.02, 0; LY, $1.36
  • WK, up $.03 @ $4.48; WN, up $.0325 @ $4.5175.  The funds were again sellers of 5 K

CORN/SORGHUM

  • T-storm Weather: Most likely scenario next 2 weeks is for near- & above-normal rain to affect a wide area; highest totals of 1.50”-3.00” in Corn Belt & Delta, & 1.00”-2.00” in central & southern Plains, & 0.75”-1.50” in northern Plains
  • ATI Research: The 5-year avg. for U.S. corn planting progress increases approximately 7% from April 14-21 to 12%

·      Consultant: Argentina corn crop estimate is increased 1.0 MMT this week to 48.0; neutral to higher bias going forward 

  • Ethanol margins: $0.13 per gallon—unchanged vs. last week but below $0.29 in 2018.  EIA report at 9:30 am CDT

SOYBEANS/WHEAT

  • T-storm Weather: Most likely scenario next 2 weeks is for near- & above-normal rain to affect a wide area; highest totals of 1.50”-3.00” in Corn Belt & Delta, & 1.00”-2.00” in central & southern Plains, & 0.75”-1.50” in northern Plains

·      Consultant: Argentina soybean crop est. is increased 1.0 MMT to 39.0 with a neutral to higher bias going forward

·      ATI Research: The 5-year avg. for U.S. spring wheat planting progress increases approx. 10% from April 14-21 to 23%

·      T-storm Weather: Dryness has developed past 30 days in Kansas HRW wheat, but better rain chances exist short-term

ENERGY

·      Higher:  CLM19+$.38 @ $64.57; EBM, +0.48 @ $72.20; EBM-QCLM, +.11;RBM, +.0136; NGM, +.006HOM, +.0072

·      EIA Report Estimates (API): crude oil, +1.1 (-3.1); Gasoline, -1.6 (-3.6); Distillates, -0.8 (+2.3).  Estimates for ethanol production avg. 0.995 mbpd (range: 0.980-1.005).  Avg. est. of ethanol stocks: 23.025 mb (range 22.943-23.158)

·      Chicago ethanol lost $.00625 Tuesday to $1.32625; basis, mostly weaker: New York, -$.00875 @ $.12625; Gulf, +$.01625 @ $.10875; Dallas, -$.00375 @ $.08875; Tampa, -$.03875 @ $.178755; LA, -$.01375 @ $.37375   

·      Ethanol RINs firmed:  2018’s, +0.50 @ 11 -11 ½; 2019’s, +.1250 @ 17- 17 ½                        &n​bsp;                       &nb​sp;      

·      The May RBOB/May ethanol spread widened $.0319 Tuesday to+$.7087/gallon    

LIVESTOCK/POULTRY                          ​              

  • ​ Choice boxed beef was $1.07 higher on Tuesday at $232.05, and is up $3.73 compared to last week
  • 5-Area Weekly Weighted Average Steer price was up $0.89 v. last week at $126.19/cwt, and is up $6.70 v. last year

·      USDA mandatory pork carcass cutout value fell $1.04 on Tue. to $84.89, but is still up $3.45 compared to a week ago

  • CME Lean Hog Index firmed $0.27 on Tue. to $79.84.  May futures declined $1.10 but are still $9.135 above the index

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

 



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