Written Commentary
Grain calls are marginally lower. SN is down 1 cent and near 8.66. CN is down 2 cents and near 3.27. WN is down 3 cents and near 4.93. Stocks are higher but concern of a second outbreak of the virus still offers resistance to commodity and stock values. US Dollar is higher. Crude is lower. Gold is lower.
Corn futures continue to consolidate in a trading range. Next few days starts the weekly cycle for demand. Today, US ethanol data should show slow rebound in production and continued drop in stocks. Overall demand is still below pre virus levels and suggest demand for corn for ethanol is still lower than is needed to drop supplies. Weekly export sales tomorrow could also be below pace needed to reach USDA goal. US 7 day weather outlook looks favorable for crops. Key is July weather. Carry in futures suggest adequate supply and need for farmers to store their supplies.
Soybean futures remains in a broad trading range. Soybean futures have found support from China buying US. Recent US NOPA soybean crush data showed US domestic soymeal and soyoil demand better than expected. Fact that there is no carry in soybean futures suggest the need for commercial to buy US farmer supplies to satisfy crush needs. Weekly US soybean export sales pace continues to be behind pace needed to meet USDA goal. US soybean 2020 crop conditions remain above 5 year average. China soybean crush margins have dropped in June versus May.US and South America soybean crush margins have also dropped.
Chicago wheat futures have dropped below 5.00. World wheat trade remain slow. Some feel virus impact of buyers economy had slowed buying. Fact that Russia will not extend export quotas into July weighed on prices. Despite concern over Russia crop and their high prices, World north hemisphere harvest is also weighing on futures. US supply is adequate but US export prices are competitive. Early SRW yields in KY are well below expectations. Suggesting freeze may have damaged the crops more than expected.
On Tuesday. Managed Money were net sellers of 7,000 SRW wheat, sold 1,000 corn, sold 2,000 soybeans, sold 1,00 soymeal and bought 2,000 soyoil. We estimate funds are net short 34,000 contracts of SRW Wheat; net short 297,000 Corn; net long 25,000 Soybeans; net short 53,000 lots of Soymeal, and; are net short 3,000 Soyoil.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
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 ADM. 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.
