May 25 | Follow us on Twitter @TradeADMIS | Download Report
Soybeans, soymeal, corn and wheat closed higher. Soyoil closed lower. Volume was light in front of the long US Holiday weekend. CBOT will be closed Monday. Crude was lower on talk POTUS asked Saudi Arabia to increase output to help lower prices. US Dollar was higher on talk that US and N Korea summit may soon be back on.
Soybean and soymeal closed higher. Soyoil closed lower. Technically, SN is 50 pct back from the drop from 10.90 to 9.92. Some feel that China buying US soybean could send prices higher and closer to the old highs. Talk that Argentina may reestablish export taxes could also be supportive. For the month, soybean futures are about unchanged, soymeal futures are up 9.00 and soyoil is down 185 points. Oil World est that the first half of the 2018/19 marketing season could see tight soybean supplies. This due to the lower Argentina crop. The lower Argentina supply could trigger another rally in soymeal in the coming weeks. They went on the say that the second half of the 2018/19 season could see increase supply esp from Argentina. This could eventually weigh on 2019 prices.
Corn futures closed up 1 cent on low volume and in a narrow range in front of the long US Holiday weekend. CN has rallied to near 4.10 on a combination of lower 2018 South America crops and talk that the US crop could also be lower than the last few years. USDA low ball estimate of World 2018/19 corn end stocks also woke up a few bulls. Key remains US weather. Still think a “scare” will help CN test 4.35. Need a real problem especially in June and July to push futures higher than that. Wild card is China. Will they be forced to buy US corn, DDG and ethanol as part of a trade deal? For the month corn prices are up 5 cents. Some have increased their US 2017/18 corn demand and lowered US corn carryout to closer to 2,082 mil bu vs USDA 2,182. They also raised US 2018/19 corn demand 100 mil bu and lowered their carryout to near 1,615 vs USDA 1,682. Most of the increase in demand was export. USDA cattle on feed and placements were in line with trade est. Current larger on feed and kill could limit the upside in cattle futures.
Wheat futures closed higher and near session highs. EU futures closed higher and new 10 month highs. WN is trading to new highs for the move as funds flip from a record large short to a long. Word that Russia may have pulled their wheat export offers this am is supportive. Russia wheat prices were $15 below German and $45 below US HRW. There was talk that some Russian exporters pulled export offers today. One group today estimated Russia 2018 wheat crop near 69 mmt vs USDA 72 and 85 last year. Some feel there is a high probability that without a better Russian, Canada, US and Australia weather forecast, nearby KC wheat could trade over 6.00 next week. Large drop in supplies and KC wheat could eventually test 7.00. For the month, KC wheat is up 62 cents.
May 25 Download Report
STOCK INDEX FUTURES
Futures continued to work lower after the cancellation of talks between the U.S. and North Korea. However, North Korea said it was still open to resolving issues with the U.S.
In addition, there was pressure on news that the Commerce Department said orders for durable goods in April, which are products designed to last at least three years, declined 1.7% from the prior month. Economists had expected a 1.5% decrease for the month.
The May 9:00 central time consumer sentiment index is anticipated to be 99.
In the longer term, traders will likely gradually shift their focus of attention more toward the still overall accommodative global interest rate policies, in spite of the six rate hikes from the Federal Reserve since December 2015, and away from a variety of geopolitical worries.
The U.S. dollar is higher as interest rate differential expectations continue to support the greenback.
The recent slide in German business sentiment stabilized in May, according to a survey by Germany's Ifo institute. The Ifo business climate index came in at 102.2 which is unchanged from April and above economists' estimates of 101.9.
In spite of this better than expected news, the euro declined. In addition, there are ongoing concerns over Italy’s debt outlook, which weighed on sentiment.
The Japanese yen is lower on news that Tokyo's core consumer prices increased in May at a slightly slower rate, which is another indication that that there is still a long way to go until inflation reaches the Bank of Japan's 2% target.
The core CPI was up .5% in May from a year earlier, according to the Ministry of Internal Affairs and Communications. The result was slightly lower than the .6% increase that was predicted by economists.
The Canadian dollar and the Australian dollar are under pressure due to lower crude oil prices.
INTEREST RATE MARKET FUTURES
In light of the cancelled U.S. North Korean talks, flight to quality buying is coming into the market.
Chicago Federal Reserve Bank President Charles Evans, Atlanta Federal Reserve Bank President Raphael Bostic and Dallas Federal Reserve Bank President Robert Kaplan will participate in a panel discussion with the Dallas Federal Reserve Bank at 10:45.
The probability of a fed funds rate hike from the Federal Open Market Committee at the June 13 meeting remains at almost 100%.
Analysts are anticipating two or three more interest rate hikes from the FOMC this year.
Once the flight to quality influence fades, interest rate market futures will probably trade lower, as two or three additional rate increases from the Fed are predicted for 2019.
This special monthly report recaps the financial, energy, metal, currency, grain and livestock market trends exclusively by the ADMIS Research Team. April Edition March Edition
USDA Supply/Demand Crop Report (released May 10)
US APRIL UNEMPLOYMENT DATA (released May 4)
US Q1 GDP (released Apr 27)
USDA Supply/Demand Crop Report (released Apr 10)
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