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DAILY PM AG MARKET VIEW REPORT 

May 22, 2019  |  Follow us on Twitter @TradeADMIS  |  Download PDF

Soybeans, soyoil and soymeal ended higher. Corn was unchanged. Wheat was mixed to lower. Crude was lower. US stocks were quietly lower. 

SOYBEANS

Another interesting day. Most markets were lower after the President of China said China will not cave in anytime soon. This could suggest that there may not be any US and China trade deal until after the 2020 US Presidential election. Soybeans though found support after US Ag Secretary said that reports of a US farmer aid payment were inaccurate media stories (fake news?) Secretary said that payments will be designed as not to skew 2019 planting intentions. Initial word that soybean farmers would receive a 2.00 payment on 2019 acres raised talk that famers would increase soybean acres. US Midwest weather forecast is still wet through June 2.  Weekly old crop and new crop US soybean export sales are estimated near 100-500 mt. Total commit is near 45.2 mmt vs 55.3 last year. USDA goal is 48.3 mmt vs 58.0 last year.

May 22 Weekly Soybean Exports 

CORN

Corn futures were unchanged. Overnight prices were lower on what some thought was consolidation from an overbought technical situation. US farmer has also been an active seller of cash on the recent rally. Corn found resistance after US Ag Secretary said that reports of a US farmer aid payment were inaccurate media stories (fake news?). Secretary said that payments will be designed as not to skew 2019 planting intentions. Initial word that corn farmers would receive only a 4 cent payment on 2019 corn acres rallied corn prices on Tuesday. US Midwest weather forecast is still wet through June 2. This has raised talk that US 2019 corn acres may be down as much as 4.0-4.5 million acres. This has some looking for higher corn prices. Weekly US ethanol production was up from last week and last year. Stocks were also higher than last week and last year. Margins continue to sink lower on slow domestic and export demand. Trade estimates that cattle on feed will be up 2.9 percent on Friday report. April placements could be up 13 percent. April marketing’s could be up 6.6 pct. Weekly old crop and new crop US corn export sales are estimated near 250-900 mt. Total commit is near 46.9 mmt vs 52.6 last year. USDA goal is 58.4 mmt vs 61.9 last year.

May 22 Weekly Corn Exports 

 WHEAT

July Chicago wheat futures have rallied from contract lows near 4.18 to test the 100 day moving average near 4.82. Much of the rally is due to a wet US spring that could reduce the quality of the US 2019 winter wheat crop. Fact USDA raised this week winter wheat crop rating especially HRW states offered resistance. Wheat also rallied in concert with corn. Concern about lower US 2019 corn crop could increase chance for more wheat feeding. Wire service reported that US may offer US farmers 63 cents per bushels for wheat to aid drop in prices due to the ongoing trade battle between US and China. Weekly US wheat export sales are estimated near 100-500 mt. Total commit is near 25.6 mmt vs 23.6 last year. USDA goal is 25.2 mmt vs 24.5 last year. USDA estimates total World exports near 176.7 mmt vs 180.7 last year. USDA estimates World 2019/20 wheat exports near 184.6 mmt with US share near 24.4. Wheat failed to trade over key 5.00 resistance. World fundamentals do not warrant a rally over 5.00 unless there are more US weather problems.

May 22 Weekly Wheat Exports


Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by Archer Daniels Midland Company.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright © ADM Investor Services, Inc.

DAILY AM FINANCIAL MARKET OUTLOOK REPORT

May 22 Flight to Quality Vehicles Trade Higher |  Download PDF

STOCK INDEX FUTURES

U.S. stock index futures are lower, as fears of a possible escalation in the trade war between the U.S. and China were rekindled after reports that Washington could impose sanctions on another Chinese technology company.

My view remains that the global reflation scenario is on track and easier credit conditions from most of the world’s central banks, including the Federal Reserve, are coming and will be the dominant fundamental that supports stock index futures in the long term.

But, first we need to get past the U.S.-China trade hurdle.

CURRENCY FUTURES

The euro currency is lower in spite of concerns about upcoming European parliamentary elections.

Investors sought safety in the Japanese yen and the Swiss franc, which are likely to continue to advance while the U.S.-China trade issues simmer.

The British pound is lower in spite of news that U.K. core inflation accelerated to a 2.1% annual rate in April, moving ahead of the Bank of England’s 2% target and putting pressure on the central bank to hike interest rates.

The Canadian dollar is higher on news that retail sales in Canada increased for the second consecutive month, rising 1.1% in March from February.

INTEREST RATE MARKET FUTURES

St. Louis Federal Reserve Bank President James Bullard, a voter in the rate-setting committee this year, late Tuesday said the central bank could lower its short term interest rate to help to achieve the Fed’s 2% inflation target even if economic growth maintains its momentum.

Federal Reserve speakers today are New York Federal Reserve Bank President John Williams at 9:00 central time, Atlanta Federal Reserve Bank President Raphael Bostic at 9:10, Dallas Federal Reserve Bank President Robert Kaplan at 9:15 and Atlanta Federal Reserve Bank President Raphael Bostic at 3:00.

The Federal Open Market Committee will release the minutes of its April 30-May 1 policy meeting at 1:00.

The minutes from the Fed should provide additional information on how its members assessed an unexpected downtick in inflation during the first quarter and could provide hints on future policy changes.       

Financial futures markets are predicting there is a 68% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its December 11 policy meeting, which is unchanged from yesterday. 

I expect the flight to quality vehicles to trade higher in this atmosphere of U.S.-China trade uncertainties.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by Archer Daniels Midland Company.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

MONTHLY COMMODITY MARKET REVIEW

This special monthly report recaps the financial, energy, metal, currency, grain and livestock market trends exclusively by the ADMIS Research Team.

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INFOGRAPHIC SNAPSHOTS

USDA SUPPLY/DEMAND REPORT (released May 10)
USDA MAY 2019 
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USDA STOCKS & ACREAGE REPORT(released March 29)
March Quarterly Stocks
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