Written Commentary
MORNING OUTLOOK
Grains are higher. SK is up 11 cents and near 14.44. SX is up 8 cents and near 12.82. SMK is near 404.9. BOK is near 56.41. Higher soybeans vs products is weighing on board crush margins. CK is up 9 cents and near 5.95. CZ is up 7 cents and near 5.19. WK is up 5 cents and near 6.57. KWK is up 5 cents and near 6.14. MWK is up 1 cent and near 6.65. Higher trade linked to dry Brazil, N US plains/Canada prairie and west Europe weather. US stocks are lower. US Dollar is lower. Crude is unchanged, Gold is higher.
For the week, SRW Wheat prices were up roughly 15 cents; HRW up 22; HRS up 10; Corn was up 11 cents; Soybeans up 24 cents; Soymeal up $1.00, and; Soyoil up 330 points. US 6-10 day forecast calls for below normal temps and below normal rains for west Midwest and US plains. Brazil is dry.
Chinese Ag futures (September) settled down 50 yuan in soybeans, up 22 in Corn, up 41 in Soymeal, up 36 in Soyoil, and up 46 in Palm Oil. Malaysian palm oil prices were down 40 ringgit at 3,676 (basis July) at midsession.
CK is again testing 6.00. Trade estimates US domestic demand could be 160 mil bu higher and exports 225 higher than USDA. Cold start to US spring weather and a warmer and drier summer could add 50-75 cents to CZ. Trade est US 2020/21 corn carryout near 950 vs USDA 1,352. Key is final demand. Trade est US 2021 corn crop at 15,150, yield 180 and carryout near 1,200. US summer weather will need to be almost perfect or futures should trade higher.
Wheat futures remain a follower to corn but wheat may be finding support from dry US north plains, Canada and west Europe weather. Threat of Russia closing Ukraine port raises concern about Ukraine exports. Trade est US 2021 wheat crop at 1,900, yield 49 and carryout 700. World wheat needs to increase 12-15 mmt or World wheat end stocks could drop for the 5th straight year. Key is 2021 weather.
When SK dropped below 14.00 there was an increase in new demand. There is talk of new China interest in US new crop. Brazil soybean values have dropped due to low China interest but still below levels for US imports. Soyoil prices are firm on talk that US summer soybean crush could drop due to low soybean supplies. Trade est US 2020/21 soybean carryout near 70 mil bu vs USDA 120. Key is final demand. Trade est US 2021 soybean crop at 4,500, yield 51 and carryout 75. Key is US old crop supply vs demand and US summer weather.
On Friday, Managed funds were net sellers of 1,000 contracts of SRW Wheat; and net sold 3,000 contracts of Corn; net bought 5,000 Soybeans; and; 6,000 Soyoil. We estimate Managed Money net long 1,000 contracts of SRW Wheat; net long 414,000 Corn; net long 165,000 Soybeans; long 48,000 Soymeal, and; net long 97,000 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.
