The US dollar index continues to push higher this week as the trade looks ahead to an expected Fed rate hike in the coming months. The dollar index closed up 2% on the week, with the June contract settling at 100.575. The dollar strength is taking its toll in both equities and commodities markets; the S&P 500 posted its third straight week lower and agricultural futures have been trending lower for some time. As I’ve noted in this wire for several weeks, US export sales have suffered as a result of exchange rates with this week as light as we’ve seen in some time.
Wheat export sales were the only bright spot this week and by bright I mean they were average. All wheat sales for the current marketing year were reported at 445,200 MT. Not a big number but it gets the job done. Corn was dismal, coming in at only 418,000 MT, the lowest total since the Jan 1 report. Soybean sales for the current marketing year were unsurprisingly smaller at 167,900 MT. Old crop soybean sales are now 98% of the USDA export projection. Don’t be surprised to start seeing some new crop soybean business put on the books soon. Sorghum posted another impressive total of 218,000 MT. Interestingly, Australian sorghum values are becoming more competitive with the US; the added competition ought to take a chunk out of US sales. I’ve been saying this for a number of weeks now; eventually I have to be right…
Wheat futures actually traded better on the week despite today’s lower close. Still, with the dollar moving firmly up and to the right on charts it’s difficult to be overtly bullish any grains. For the week, May corn closed down 5 ½ cents and May soybeans finished off 11 cents. Chicago wheat closed up 19 ½ cents, KC closed up 17 and Minneapolis May wheat finished the week up 11 cents.
Wheat and corn basis is firmer and soybean premiums are stagnant as attention has shifted firmly toward new crop in the North American bean complex. Premiums for high quality hard red spring wheat are particularly strong; in the PNW a 25 cent premium is being bid by exporters to shippers willing to guarantee DHV of 85 or better. Corn premiums on the Mississippi and at the Gulf are 3-5 cents better.
Chicago Gulf PNW
Soybeans Option K .70 K 1.10 K
Corn: .15K .60 K 1.10 K
SRW: .10 K .95 K N/A
HRW: N/A .85 K (12 pro) 1.30 K (11.5 pro)
DNS 14 pro: 1.40 K N/A 3.00 K
SWW: N/A N/A 1.80 K
The BDI continues to inch it’s way upward, finishing today at 562 points. From a historical perspective, it remains extremely cheap so my position is unchanged: worldwide grain trade will remain busy. As I mentioned last week, the data is there to back up this position; unfortunately, the strong dollar has prevented the US from participating in all of the available business.
International grain tenders this week:
· Japan bought US, Canadian and Australian food wheat this week for Apr 21-May 30 shipment. The total included:
· 14.631 MT of US Western white
· 14,967 MT of US HRW
· 53,657 MT of Canadian Western Red Spring
· 25,940 MT of Australian Standard White
· The CCC announced a tender for 39,180 MT of ordinary HRW and 3,910 MT of sorghum for Apr 24-May 4 shipment.
· Japan bought 22,390 MT of feed wheat and 33,070 MT of feed barley in an SBS tender to be loaded by June 30.
· Tunisia tendered for 126,000 MT of soft wheat and 75,000 MT of feed barley for April/May shipments.
Please don’t hesitate to contact me with any questions or comments. [email protected]
Happy trading!
Sean K. Treasure
Disclaimer: Commodity trading involves substantial risk and may not be suitable for everyone. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this wire and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.
Wheat export sales were the only bright spot this week and by bright I mean they were average. All wheat sales for the current marketing year were reported at 445,200 MT. Not a big number but it gets the job done. Corn was dismal, coming in at only 418,000 MT, the lowest total since the Jan 1 report. Soybean sales for the current marketing year were unsurprisingly smaller at 167,900 MT. Old crop soybean sales are now 98% of the USDA export projection. Don’t be surprised to start seeing some new crop soybean business put on the books soon. Sorghum posted another impressive total of 218,000 MT. Interestingly, Australian sorghum values are becoming more competitive with the US; the added competition ought to take a chunk out of US sales. I’ve been saying this for a number of weeks now; eventually I have to be right…
Wheat futures actually traded better on the week despite today’s lower close. Still, with the dollar moving firmly up and to the right on charts it’s difficult to be overtly bullish any grains. For the week, May corn closed down 5 ½ cents and May soybeans finished off 11 cents. Chicago wheat closed up 19 ½ cents, KC closed up 17 and Minneapolis May wheat finished the week up 11 cents.
Wheat and corn basis is firmer and soybean premiums are stagnant as attention has shifted firmly toward new crop in the North American bean complex. Premiums for high quality hard red spring wheat are particularly strong; in the PNW a 25 cent premium is being bid by exporters to shippers willing to guarantee DHV of 85 or better. Corn premiums on the Mississippi and at the Gulf are 3-5 cents better.
Chicago Gulf PNW
Soybeans Option K .70 K 1.10 K
Corn: .15K .60 K 1.10 K
SRW: .10 K .95 K N/A
HRW: N/A .85 K (12 pro) 1.30 K (11.5 pro)
DNS 14 pro: 1.40 K N/A 3.00 K
SWW: N/A N/A 1.80 K
The BDI continues to inch it’s way upward, finishing today at 562 points. From a historical perspective, it remains extremely cheap so my position is unchanged: worldwide grain trade will remain busy. As I mentioned last week, the data is there to back up this position; unfortunately, the strong dollar has prevented the US from participating in all of the available business.
International grain tenders this week:
· Japan bought US, Canadian and Australian food wheat this week for Apr 21-May 30 shipment. The total included:
· 14.631 MT of US Western white
· 14,967 MT of US HRW
· 53,657 MT of Canadian Western Red Spring
· 25,940 MT of Australian Standard White
· The CCC announced a tender for 39,180 MT of ordinary HRW and 3,910 MT of sorghum for Apr 24-May 4 shipment.
· Japan bought 22,390 MT of feed wheat and 33,070 MT of feed barley in an SBS tender to be loaded by June 30.
· Tunisia tendered for 126,000 MT of soft wheat and 75,000 MT of feed barley for April/May shipments.
Please don’t hesitate to contact me with any questions or comments. [email protected]
Happy trading!
Sean K. Treasure
Disclaimer: Commodity trading involves substantial risk and may not be suitable for everyone. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this wire and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.
