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DAILY AG MARKET VIEW REPORT 

October 17, 2019  |  Follow us on Twitter @TradeADMIS  |    Download PDF

SUMMARY

Soybeans, soymeal, corn and wheat traded higher. US stocks were mixed. US Dollar was lower. Crude was lower. 

SOYBEANS

Soybeans traded higher but off session highs. Optimism about a US and China trade deal and that China may soon buy US Ag goods including soybeans helped prices. Approaching US harvest and good start to 2020 South America crop years could offer seasonal resistance. Weekly US soybean export sales are estimated near 800-1,700 mt vs 2,095 last week. Managed funds are estimated long 30,000 soybean contracts, 40,000 soyoil contracts and short 30,000 soymeal contracts. While it is very early, analyst reported today early expectations of US 2020 planted acres, yield and production by crop. Soybean planted acres could be near 85.3 vs 76.4 this year. Trend yield is 51.3 vs 46.9 this year. This would produce a crop near 4,330 mil bu vs 3,550 this year. Analyst feel as much as 20 million US crop intended acres did not get planted this year due to the wet spring.

Soybean Commit of Traders Oct 17

CORN

Some demand bears feel rally in December corn defies gravity. Slow demand for US corn exports and approaching US harvest was expected to pull futures prices lower. Feelings that US 2019 corn supply could be lower than USDA October guess and friendly USDA estimate of US September 1 stocks could be enough to trigger managed fund short covering. 4.20 CZ 20 would be a good place to sell 2020 crop. Weekly US ethanol production was up from last week but down from last year. Stocks were up from last week and last year. Margins have turned positive. Weekly US corn export sales are estimated near 400-800 mt vs 284 last week. US 10 day Midwest weather forecast looks drier which could help harvest. While it is very early, analyst reported today early expectations of US 2020 planted acres, yield and production by crop. Corn acres could be near 95.2 versus 89.9 in 2019. Trend yield is 178.5 vs 168.4 this year. This would produce a crop near 15,650 mil bu vs 13,779 this year. Analyst feel as much as 20 million US crop intended acres did not get planted this year due to the wet spring. Hog futures dropped on news from China that their 2020 hog herd could return to normal production?

Corn Commit of Traders Oct 17

WHEAT

Wheat traded higher on talks of lower World supply and higher World Wheat trade. Wheat also attracted new buy after making new highs for the move. Supply bears feel World stocks are more than adequate to satisfy demand and that prices are near the upper end of a trading range. While it is very early, analyst reported today early expectations of US 2020 planted acres, yield and production by crop. 2020 US wheat planted acres could be near 44.7 vs 45.1 this year. Trend yield is 50.0 vs 41.6 this year. This would produce a crop near 1,900 mil bu vs 1,962 this year. Weekly US export sales report was delayed one day this week due to Mondays holiday. Weekly US wheat export sales are est near 250-550 mt versus 522 last week. Chicago nearby December wheat futures made new highs for the move today. 5.40 WZ would be a good spot to add to sales of inventory. 5.50 WK20 would also be a good place to start selling 2020 crop.

Oct 17 Wheat Commit of Traders

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

Oct 17  Brexit News Supports Stock Index Futures  Download PDF

STOCK INDEX FUTURES

U.S. stock index futures are higher after U.K. Prime Minister Boris Johnson said a Brexit deal has been reached with Brussels. In addition, third quarter corporate earnings reports are coming in mostly stronger than expected.

U.S. housing starts in September were 1.256 million when analysts expected 1.300 million and the more market sensitive residential building permits, which can signal how much construction is in the pipeline, were 1.387 million. The median estimate for permits was 1.335 million.

Initial jobless claims remained near a 50-year low at 214,000 in the week ended October 12 when economists had expected 215,000 claims.

The Philadelphia Federal Reserve October business index was 5.6 when 6.4 was anticipated.

September industrial production was down .4% when a decline of 0.2% was expected and capacity utilization was 77.5%, which compares to the anticipated 77.8%.

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.

CURRENCY FUTURES

The euro currency rallied to its highest levels in almost two months against the U.S. dollar after the E.U. and Britain reached a Brexit deal.

The British pound was higher after British Prime Minister Boris Johnson said, “We have a great new Brexit deal.” However, the gains were given back after the Northern Irish party, the DUP, said it would not vote for the deal.

The Canadian dollar is higher after Statistics Canada reported that manufacturing sales in August increased 0.8%, which was better than the market expectation for an increase of 0.6%.

INTEREST RATE MARKET FUTURES  

Flight to quality longs were liquidated in light of the encouraging news on Brexit.

Federal Reserve speakers today are Federal Reserve Member of the Board of Governors Michelle Bowman at 1:00, Chicago Federal Reserve Bank President Charles Evans at 1:00 and New York Federal Reserve Bank President John Williams at 3:20

Market participants believe there is an 88% probability that the Federal Open Market Committee will lower its fed funds rate by another 25 basis points at the October 30 policy meeting. The probability yesterday was 85%.

In the longer term, higher prices are likely for futures, especially at the long end of the curve, as most major central banks, including the Federal Reserve, are under pressure to become more accommodative.

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.

March Edition
February Edition
January 2019 Edition
December Edition
November Edition
October Edition

INFOGRAPHIC SNAPSHOTS

USDA SUPPLY/DEMAND REPORT (released October 10)
USDA October 10 Infographic
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USDA QUARTERLY REPORT (released September 30)
USDA Crop Report
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FOMC MEETING OUTLOOK 9 (Sept 18)

Outlook for FOMC
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