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SOYBEANS January soybeans settled at 892 ¼, up 3 ½ cents on the day leaving the market up 5 ½ cents on the week. January soybean meal settled at $313.00, up $5.40 on the day which left the market up $5.60 on the week. January soybean oil settled at 27.57, down 0.32 points on the day leaving the market down 0.23 points on the week. January crush settled at 99 ½ cents, up 4 ¼ cents on the week. Soybeans traded both sides on Friday with the market finding support mid-day after positive comments by President Trump regarding the US-China trade negotiations. Trump stated that additional tariffs would most likely not be needed as China responded to a letter sent mapping out the US demands. The Trump administration plans to push for a commitment from China to resume imports of US soybeans in any trade accord reached by the two parties. US exporters announced the sale of 100,000 tonnes of soybeans to Unknown destinations this morning. Brazilian soybean planting progress is seen at 82% complete compared to 73% last week and compared to 71% last year according to Agrural. Mato Grosso du Sol was estimated at 99% complete with Mato Grosso at 98%. Parana’s plantings have caught up on favorable weather and are seen at 89% unchanged from last year. Net weekly export sales for soybeans came in at 470,400 tonnes for the current marketing year and 500 for the next marketing year for a total of 470,900 tonnes. As of November 8, cumulative soybean sales stand at 43.0% of the USDA forecast for the 2018/2019 (current) Marketing Year versus a 5 year average of 66.2%. Sales of 695,000 tonnes are needed each week to reach the USDA forecast. Net meal sales came in at 432,300 tonnes for the current marketing year and none for the next marketing year for a total of 432,300 tonnes. As of November 8, cumulative soybean meal sales stand at 42.2% of the USDA forecast for the 2018/2019 (current) marketing year versus a 5 year average of 44.3%. Sales of 154,000 tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 15,000 tonnes for the current marketing year and none for the next marketing year for a total of 15,000 tonnes. As of November 8, cumulative soybean oil sales stand at 26.2% of the USDA forecast for the 2018/2019 (current) marketing year versus a 5 year average of 27.6%. Sales of 15,800 tonnes are needed each week to reach the USDA forecast.
Chicago December wheat settled at 506 ¾, up 1 ¼ cents on the day leaving the market up 4 ¾ cents on the week. Kansas City December settled at 482 ¾ up 2 ¾ cents on the day leaving the market down 4 ¾ cents on the week. Net weekly export sales for wheat came in at 438,300 tonnes for the current marketing year and none for the next marketing year for a total of 438,300 tonnes. As of November 8, cumulative wheat sales stand at 50.8% of the USDA forecast for the 2018/2019 (current) marketing year versus a 5 year average of 66.5%. Sales of 468,000 tonnes are needed each week to reach the USDA forecast. French soft wheat plantings were seen at 92% complete as of November 11th versus 85% last week. The Buenos Aires Grains Exchange reported the Argentine wheat harvest at 16% versus 11.3% last week with comments that losses to the wheat crop in the central regions are possible. However, rains last week did help grain fill for wheat in the southern province of Buenos Aires.Russia's 2018-19 wheat crop next year may rise on expanded plantings according to Moscow consultant SovEcon. They estimate total winter wheat plantings at 18.2 to 18.4 million hectares versus 17.8 million this last year. China has cut the 2019 state minimum wheat purchase price for the second consecutive year as part of its efforts to reduce government stockpiles. The floor price for wheat purchases was set at 2,240 yuan per tonne for 2019 versus 2,300 yuan per tonne in 2018. The government stockpiles wheat from farmers when market prices fall below the minimum purchase price. Prices were set based on production cost, market supply and demand as well as global grain prices. The open interest in Chicago went down 1,125 contracts on Thursday with Kansas City down 3,645 contracts.
Nov 12 | Download PDF
Flight to Quality Flows Help The US Dollar Index
STOCK INDEX FUTURES
Stock index futures are lower due to fears of a slowing global economy, along with ongoing political uncertainties in Europe.
In spite of lower prices today, history has shown that U.S. equity markets after the midterm elections have a tendency to advance through year-end and also into the following year.
In addition, the third year of a presidential term is historically the strongest year for stock index futures.
In addition to the bullish historical tendencies for stock index futures after the midterm elections, there is the still relatively low interest rate environment that will provide long term underlying support. CURRENCY FUTURES
The U.S. dollar index advanced to a 17 month high due to safe haven flows in light of continuing global growth worries and rising political risks in Italy and the U.K.
The euro currency is lower as Italy faces a deadline tomorrow to submit a revised budget to the European Union, but its refusal to lower the deficit target sets the stage for a collision with Brussels.
Italy’s Deputy Premier Matteo Salvini said his government could stop European Union budget decisions if the E.U. continues to show disrespect to his countrymen.
The British pound fell to a seven day low as a result of reduced expectations of a Brexit deal.
U.K. Prime Minister Theresa May’s Brexit strategy came under attack, increasing the risk that her plan for leaving the European Union will be voted down by parliament.
The U.S. dollar was also stronger against the Chinese yuan due to ongoing tensions over U.S. and China trade and security issues.
The Canadian dollar is being supported by higher crude oil prices. INTEREST RATE MARKET FUTURES
Flight to quality flows are supporting the interest rate futures markets.
In addition, there is support for futures as the probability of a rate hike next month from the Federal Open Market Committee declined from last week.
According to the financial futures markets, the probability of a fed funds rate hike at the Federal Open Market Committee’s December 19 policy meeting is 76%, which compares to the 80% to 82% area late last week.
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 risk of loss in trading futures and options can be substantial. Past results are not indicative of future results or performance. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff. Research analyst does not currently maintain positions in the commodities specified within this report. 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.
This special monthly report recaps the financial, energy, metal, currency, grain and livestock market trends exclusively by the ADMIS Research Team. October Edition September Edition August Edition
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