July 16, 2019 | Follow us on Twitter @TradeADMIS | Download PDF
Soybean and corn continues to take out weather premium. Soymeal and soyoil were also lower. Wheat closed slightly lower. US Dollar was higher. Crude traded lower after testing $60.
November soybean trade back below the 20 and 100 day moving averages. Yesterday, managed funds turned sellers after the second week US Midwest weather forecast hinted of normal temps and rainfall. Today’s noon maps also suggested a cold front forecast for the north Midwest might did down into IA and N Il over the weekend. IL and IA areas were forecasted to miss most of the rains over the next 5-7 days. Fact USDA increased weekly soybean crop ratings and POTUS said it may take a while for a trade deal with China weighed on prices. POTUS also suggested he could still impose new tariffs on the remaining China imports. USDA rated the US soybean crop near 54 pct good/ex versus 53 last week and 69 last year. IL is rated 41 pct good/ex versus 38 last week. IA is rated 63 pct good/ex vs 64 last week. NE is rated 71 pct good/ex vs 73 last week.
Corn futures rejected the 4.60 price on the December. Our weather guy does not feel that end of July and August weather will be ideal but rains could fall across the north areas and tropical depression could drop rains across S IL and IN. Others look for pattern change next week. Most of the central Midwest will be hot and dry this week but cooler temps and scattered rains are possible early next week. Noon GFS weather models even hinted that north rains this week Could drop down into IA and N IL. USDA rated the US corn crop near 58 pct good/ex versus 57 last week and 72 last year. Improvement was in IL, IA, MO and OH. Still, IL is rated 42 pct good/ex versus 37 last week. IA is rated 62 pct good/ex vs 61 last week. NE is rated 76 pct good/ex vs 76 last week. 17 pct of the crop is pollinating vs 42 last year. December corn continues to trade in a wide range between 4.20 and 4.60. Some feel dryness across the central Midwest could support prices near 4.20. Slow export demand And large farmer ownership of last years crop could limit the upside unless there is a weather problem.
Chicago wheat futures rejected the recent highs near 5.60. WZ closed near 5.19 and below the 20 and 200 day moving averages. WZ tested the 50 day moving average today near 5.15. Fact US winter wheat harvest is advancing and there is slow export demand for US wheat offers resistance. Continued high rating of the US spring wheat crop and forecast of normal rains across the US north plains also offers resistance. Wheat is also following the lower corn prices. US winter wheat harvest is moving along. 57 pct of the crop is harvested vs 71 last year. Farmer continues to sell. US spring wheat crop is rated 76 pct good/ex vs 78 last week and 80 last year. 78 pct of the crop is headed vs 87 last year. Weekly US wheat exports were near 11 mil bu vs 17 last year. Season to date exports are near 107 vs 82 last year.
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.
July 17 Stock Index Futures Holding Up Well in Spite of US China Trade Outlook | Download PDF
STOCK INDEX FUTURES
U.S. stock index futures are holding up well in spite of yesterday’s comments from President Donald Trump when he suggested talks between Washington and Beijing have stalled and warned that he could apply new tariffs on $325 billion worth of China made goods in the coming months.
Housing starts fell 0.9% in June from the prior month to1.253 million when 1.260 were expected. Residential building permits, which can signal how much construction is in the pipeline, declined 6.1% from May to an annual rate of 1.220 million, which was the biggest monthly drop since March 2016. Analysts anticipated permits would total 1.300 million.
At 1:00 central time the Federal Reserve will release its “Beige Book” on the economy. This book, which is a snapshot of business conditions around the country, is produced approximately two weeks before the monetary policy meetings of the Federal Open Market Committee.
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 British pound fell to its lowest level against the U.S. dollar since June of 2017 due to Brexit uncertainties and increasing prospects of easier credit policies from the Bank of England.
Canada's consumer price index increased 2.0% on a year-over-year basis in June, which compared with a 2.4% gain in the previous month. Market expectations were for a 1.9% rise in June.
Canada's factory sector rebounded as expected in May. Manufacturing sales increased 1.6% in May from the previous month, which matched market expectations. INTEREST RATE MARKET FUTURES
Futures are mostly higher with most of the gains in the 30 year Treasury bond futures. Some of the buying can be attributed to a less optimistic outlook for a U.S.-China trade deal.
Kansas City Federal Reserve Bank President Esther George will deliver a speech on the economic outlook at the 2019 Agricultural Symposium in Kansas City, Missouri at 11:30.
Financial futures markets are predicting there is almost a 100% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its July 30-31 policy meeting. A second rate cut is anticipated by financial futures markets later this year.
In the longer term, higher prices are likely for futures, as most major central banks are likely to embark on a new round of accommodation.
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.
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