COMMODITY MARKET MOVEMENT ON CBOT – July 1, 2020
Weather: Grain prices were mixed but mostly higher Wednesday. Corn led the way again today on another round of technical buying and short-covering from USDA’s unexpectedly lower acreage estimates yesterday, plus mounting concerns that unseasonably hot, dry weather could descend on the U.S. as large portion’s of this season’s crop is set to pollinate. Soybean and winter wheat contracts also moved moderately higher today, closing with gains mostly between 1% and 1.5%. Spring wheat sales finished the session modestly in the red, in contrast, as some much-needed rains land in key production areas this week.
General: Between Thursday and Sunday, the Plains could see between 0.25” and 1” of additional rainfall, with the Midwest still seeing some measurable precipitation but generally coming in drier during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s latest 8-to-14-day outlook predicts generally drier-than-normal conditions for much of the Corn Belt between July 8 and July 14, with seasonally warm weather expected for the entire central U.S. during this time.
USDA released May bean crush in their Fats and Oils report this afternoon at 179.533 mbu. The trade was looking for 180.7 mbu. That was down 3.84 mbu from April, even with an extra day, but was still a record for the month. Bean oil stocks on hand at the end of the month were 2.447b lbs. That was down 155m lbs from April, but still 428m lbs larger yr/yr. Trade is looking for old crop bean sales to range from 300k to 800k MT in tomorrow’s report. New crop sales are also estimated to range 300 to 800k MT. Soymeal export sales are estimated between 75,000 and 250k MT, with up to 50k MT of 2020/21 bookings. Traders estimate bean oil sales between 5,000 and 25,000 MT.
The front month corn futures rally persisted through the Wednesday session. USDA’s monthly Grain Cruhsings report showed 299.93 mbu of corn was ground for ethanol in May. DDGS production in May was back up by 219k tons mo/mo to 1.234 million tons. EIA data from the week ending June 26 showed ethanol plants produced 900k barrels of ethanol per day on average. Average daily production increased by 7,000 bpd wk/wk. Ethanol stocks were reduced 870k barrels on the week to 20.164m bbls. That is the smallest stockpile since January 6 of 2017. Traders anticipate old crop corn bookings between 450,000 and 700,000 MT. New crop sales are estimated to be less than 200k MT.
Winter wheat trading added to Tuesday’s gains, while spring wheat pulled back some on Wednesday. The 7-day QPF shows at least 2-3 inches of rain forecast over the next week for most of ND as well as parts of northern SD and western MN. Estimates ahead of tomorrow’s Export Sales report have wheat bookings ranging 250,000 to 600k MT. Thailand is seeking 236,800 MT of optional origin wheat in an international tender.
PRICE MOVEMENT ON CBOT JULY 1
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