September 25 | Follow us on Twitter @TradeADMIS | Download PDF
November soybeans surged higher this morning and traded to a four week high at 858 but set back into the mid-day trading at 844 ¾ up 3 ¾ cents on the day. December soybean meal also pushed up to a high at $316.30 up $8.80 on the day but is trading at $309.30 up $1.80 at mid-session. The strength was tied to strong Dalian soybean meal and soybean futures overnight with Dalian soybean meal up 2.5% and the highest level since August 15th. The physical soybean meal market in China is strong on expectations of a soybean deficit at the end of the year as a result from the tariffs on US soybeans. Chinese processors are seeing positive crush margins, even with the additional 25% import tariff. Crushers have still not ordered any shipments, due to the trade dispute. Some support was also seen due to an Argentine grain port union strike Tuesday which includes soybean crushers, tugboat operators and coastal trade officials. The strike is only for 24 hours. Yesterday’s crop conditions had soybeans rated good/excellent (G/EX) as of September 23rd up 1% at 68% which was a bit if a bearish surprise. Current G/EX is up 8% versus last year and up 9% versus the 10 year average. Of the top 18 states 11 reported better, 5 worse, and 2 unchanged G/EX ratings. Major producing states with improving conditions were Illinois 79% (+2%), Minnesota 73% (+4%), North Dakota 54% (+3%) and Indiana 71% (+1%). Soybeans harvest progress came in at 14% versus 6% last week and compared to 9% last year. The top producing states harvest progress has Illinois 17% (+13%), Iowa 8% (+6%), Minnesota 15% (+8%), North Dakota 21% (+11%) and Indiana 13% (+11%). The average estimate for Friday's September 1st Grain Stocks report is 398 million bushels (378-430 range) and compared to last year's 302 million bushels. The open interest in soybeans went up 1,202 contracts on Monday with soybean meal down 2,298 contracts and soybean oil down 5,601 contracts.
December corn was near unchanged into the mid-session trading at 359 ½ down 1 cent on the day. The market is looking to close higher for the fifth day in a row. US exporters announced the sale of 239,630 tonnes of corn to Mexico this morning. Ethanol stocks like Pacific Ethanol have surged higher in recent days as traders suspect that the Administration will unveil new ethanol policy soon, such as year-around sales of E-15. South Africa crop estimates committee reduced their corn production estimate to 13.09 million tonnes from 13.21 million previously and compared to 16.82 million last year. The average estimate for Friday's September 1st Grain Stocks report is 2.010 billion bushels (1.953-2.099 billion range) and compared to last year's 2.293 billion bushels. Yesterday’s crop conditions in corn improved by 1% in the good/excellent (G/EX) ratings to 69%. Current G/EX is up 8% versus last year and up 9% versus the 10 year average. Of the top 18 states 9 reported better, 2 worse, and 7 unchanged G/EX ratings. Major producing states with improving conditions were Illinois 79% (+3%), Minnesota 78% (+1%), Indiana 73% (+2%) and North Dakota 66% (+2%). Harvest progress reached 16% complete compared to 9% last week and compared to 10% last year. The top producing states harvest progress had Iowa 5% (+3%), Illinois 28% (+16%), Nebraska 9% (+5%), Minnesota 3% (+2%) and Kansas 30% (+14%). The open interest in corn went down 8,543 contracts on Monday.
Wheat markets have sagged today following weakness in the Matif futures market. Chicago December wheat is down 10 ½ cents at 516 ½ at mid-day and Kansas City December wheat is down 10 cents at 519. Matif December futures are down 1.0% on the day after trading to a two week high early in the session. Yesterday’s winter wheat planting progress as of September 23rd was 28% versus 13% last week and compared to 22% last year. The top producing states planting progress has Kansas 21% (+14%), Texas 30% (+17%), Oklahoma 27% (+15%), Colorado 47% (+23%) and Washington 65% (+18%). The average estimate for Friday's September 1st Grain Stocks report is 2.344 billion bushels (range of 2.155-2.440 billion) and compared to last year's 2.266 billion bushels. The average estimates for Friday's wheat production has all wheat production at 1.873 billion bushels versus 1.877 billion in the August report. All winter is estimated at 1.188 billion bushels compared to 1.189 billion in August. Hard red winter is estimated at 661 million bushels, unchanged from the August number. Soft red is estimated at 291 million bushels versus 292 million in August. White winter is estimated at 237 million bushels compared to 236 million in August, other spring wheat is estimated at 610 million bushels compared to 614 million in August while durum is estimated at 73 million bushels, unchanged from August. Japan bought 109,150 tonnes of milling wheat today and Bangladesh is tendering for 50,000 tonnes of wheat. The open interest in Chicago went down 2,614 contracts on Monday with Kansas City up 1,056 contracts.
Sept 25 | Download PDF
US Dollar and 30Year Treasury Bond Futures Remain Weak
STOCK INDEX FUTURES U.S stock index futures are higher after the U.S. signed a revised free trade deal with South Korea.
Two 9:00 central time reports are scheduled. The September consumer confidence index is expected to be 131.7 and the September Richmond Federal Reserve manufacturing index is anticipated to be 20.
The two day Federal Open Market Committee meeting begins this morning and ends Wednesday afternoon with a statement. Federal Reserve Chairman Jerome Powell will hold a press conference after the meeting.
Despite of a variety of ongoing geopolitical issues, the still relatively low interest rate environment is dominating and remains long term supportive to U.S. stock index futures. CURRENCY FUTURES The U.S. dollar index is lower in spite of the very likely tightening of credit at the Federal Open Market Committee’s policy meeting on Wednesday. It was just last Friday that the greenback fell to a 14 week low.
Recent selling pressure in the U.S. dollar in spite of the ongoing trade tensions between the U.S. and China should be viewed as a sign of longer term weakness for the greenback.
The euro currency is higher for a second day after on Monday European Central Bank President Mario Draghi said he expected underlying euro zone inflation to strengthen.
Draghi’s comments caused markets to bring forward ECB rate hike expectations. A 10 basis point rate increase is fully priced in for September 2019.
The Japanese yen his higher after Bank of Japan Governor Kuroda said there are easing possibilities that include a rate cut and an expansion of bond buying. INTEREST RATE MARKET FUTURES
Thirty year Treasury bond futures declined to their lowest level since October of 2014.
The Federal Reserve is likely to hike interest rates tomorrow for the eighth time since December 2015.
According to financial futures markets, the probability of a fed funds rate increase at the Federal Open Market Committee’s September 26 meeting is close to 100%, and the probability of another fed funds rate hike in December is 80%.
The Treasury will auction five year notes today.
Some of the recent pressure on bond futures can partially be attributed to the increasing size of bond auctions from the Treasury.
The long term trend for futures is lower as the U.S. economy remains strong and the FOMC will likely continue on its tightening path.
This special monthly report recaps the financial, energy, metal, currency, grain and livestock market trends exclusively by the ADMIS Research Team. September Edition August Edition
USDA SUPPLY/DEMAND REPORT (released Sep 12) Download PDF
US AUGUST EMPLOYMENT DATA (released Sept 7) Download PDF
US Q2 GDP (released Aug 29) Download PDF
1.312.242.7000 (Headquarters) firstname.lastname@example.org
Contact Us Today
Get free guides and special offers in the Knowledge Center.
© 2017 ADM Investor Services
ADMIS is a member of all major U.S. futures exchanges, a registered Futures Commission Merchant, and a wholly owned subsidiary of the Archer Daniels Midland Company.