After a quite overnight session, global markets have come through a volatile morning and afternoon with a mildly negative tone. There were contrasting reports on whether the U.K. would remain in the EU customs union after Brexit, while members of the likely ruling coalition in Italy backed away from an attempt to have the ECB forgive 250 billion Euros of debt.
Although initial jobless claims were higher than expected, the ongoing jobless claims reading had a sizable decline to reach their lowest levels since December of 1973. In addition, the latest Philly Fed survey had a sizable increase and reached its highest reading since May of last year.
Rising U.S. yields continue to generate news headlines as the 10-year yield reached a 6 1/2 year high. U.S. equities initially sold off after U.S. data results, turned back to the upside to post moderate gains at mid-session, and then fell back on the defensive as all 3 major indices finished the day with modest losses.
Treasuries saw choppy price action throughout the day, but mostly remained in negative territory after Bonds and Notes posted new lows for the move.
The Dollar rebounded from overnight lows to post a mild gain for Thursday’s trading session while the Japanese Yen continued to have safe-haven outflows and dropped to a new 4-month low.
The Asian session will feature an April reading on Japanese national CPI that is expected to see a moderate decline from March’s 1.1% YoY rate.
The European session will include April German PPI and the March Euro-zone trade balance.
The North American session will start out with April Canadian CPI that is forecast to hold steady with March’s 2.3% YoY reading. March Canadian retail sales will follow and are expected to have a minimal downtick from February’s 0.4% reading.
The drought area continues to expand very slowly, with 45.64% of the CONUS at some level of D0-D4 drought. There is definitely more yellow in the northern Plains and Minnesota. The D3-D4 extreme drought areas are now 9.5% of the CONUS surface area vs. 9.32% last week and 0.43% one year ago.
Corn futures posted losses of 3-4 cents in most contracts on Thursday. The USDA export Sales report indicated that 985,702 MT old old crop corn was sold in the week of May 10. That was near the top of the range of expectations and nearly 3.5x as large as this time last year. Japan bought nearly 401,500 MT, with 154,500 MT switched from unknown destinations.
New crop sales totaled 129,240 MT. Shipments of corn were reported at 1.564 MMT in that week, more than 2x this time last year. None of that mattered on a “buy rumor, sell the fact” type of day. China sold 1.427 MMT of 2014 and 2015 corn from states reserves on Friday, totaling 80.48% of the totaled offered. The Buenos Aires Grain Exchange estimates that the Argentina corn crop is 34.1% complete, compared to the average 33.9%.
July ’18 Corn closed at $3.95 1/4, down 4 cents
Sept ’18 Corn closed at $4.03 1/2, down 4 cents
Dec ’18 Corn closed at $4.13, down 4 cents
Mar ’19 Corn closed at $4.21 3/4, down 3 3/4 cents
Soybean futures ended the day with most contracts 4 to 5 cents lower. Soy meal was down 41.50/ton, with front mo nth soy oil 35 pts higher. The USDA reported a private export sale of 132,000 MT to unknown destinations this morning and it initially provided support.
Export sales of old crop soybeans in the week that ended May 10 totalted 281,850 MT, just short of analysts’ estimates. That was down 20.4% from last week and 12.9% lower than this week in 2017.
New crop sales were tallied at 224,650 MT. Exports of soybeans were shown at 654,489 MT, more than 2x the total for this time last year.
Soy meal sales were reported at 375,960 MT for 17/18 and 45,666 MT for 18/19.
Sales of soy oil were shown at 10,185 MT.
BAGE trimmed their Argentina production number to 36 MMT, while estimating the crop is 71.1% harvested.
July ’18 Soybeans closed at $9.95, down 4 3/4 cents
Aug ’18 Soybeans closed at $9.98 3/4, down 4 1/2 cents
Sept ’18 Soybeans closed at $10.01, down 4 3/4 cents
Jan ’19 Soybeans closed at $10.08 1/2, down 4 1/2 cents
July ’18 Soybean Meal closed at $375.10, down $1.50
July ’18 Soybean Oil closed at $30.94, up $0.35
Wheat futures settled the day with most contracts 3-5 cents in the green. Dry conditions during Australian planting are supportive, and there are some concerns about the Russian crop.
U.S. old crop export sales during the week of May 10 totaled just 63,057 MT, on the low side of estimates. reductions of 143,000 MT were shown for unknown destinations, switched manly to Yemen, Iraq, and Ecuador.
Export sales of new crop wheat were tailed at 131,681 MT. Actual shipments were 409,869 MT, down 39.12% from the same week last year. Japan purchased 89,937 MT of wheat from Australia, Canada, and the U.S. in their weekly MOA tender, with 33,992 MT from the U.S. .
July ’18 CBOT Wheat closed at $4.97 1/2, up 3 1/4 cents
July ’18 KCBT Wheat closed at $5.19, up 5 cents
July ’18 MGEX Wheat closed at $6.14 3/4, up 3 1/2 cents
Cotton futures saw another round of gains on Thrusday, with most contracts 63-98 pts higher. This morning’s Export Sales report showed 153,270 RB in old crop sales for the week that ended May 10, close to trade estimates. That was down 20.61% from last week but 26.97% larger than the same week a year ago,
New crop sales were reported at 229,335 RB. Export shipments of upland cotton were taillied at 422,735 RB, nearly 8.95% larger than a year ago.
The Cotlook A index was down 5 pts from the previous day to 92.05 cents/lbs on May 16. The USDA Adjusted World Price for this week is 74.09 cents/lb, down 149 pts from the previous week.
July ’18 Cotton closed at 85.030, up 68 pts
Oct ’18 Cotton closed at 83.030, up 63 pts
Dec ’18 Cotton closed at 81.450, up 76 pts