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DAILY AG MARKET VIEW REPORT 

Aug 19, 2019  |  Follow us on Twitter @TradeADMIS |   Download PDF

SUMMARY

Soybeans, soymeal, soyoil, corn and wheat traded lower. US stocks, Crude and US Dollar were higher. Gold was lower. US trying to down play talk of recession.

SOYBEANS

Soybean traded lower. Weekend Midwest rains and talk that weekly US soybean ratings could actually improve 1 pct offered resistance. Annual Pro Farmer crop tour starts today with crop watchers starting in west and east and meeting in the middle on Thursday. Last year the tour average soybean yield was 53.0 vs USDA final 51.6. Weekly US soybean export inspections were near 42 mil bu vs 24 last year. China was 20 mil bu. Season to date exports are near 1,597 mil bu vs 2,006 last year. USDA goal is 1,700 vs 2,134 last year. In South America last week Brazil farmer was a big seller of soybeans. China was also a big buyer of 30 Brazil soybean cargoes. Drop in currency has slowed Argentina farmer selling of soybeans. Some have now accepted USDA August corn and soybean crop acres, yield and production numbers. We will see what Pro Farmer says this week. Some estimate now that a US 2019 soybean crop near 3,680 mil bu versus 3,845 previous and 4,544 last year could also suggest that exports could drop to only 1,800 mil bu. This could keep the US 2019/20 carryout near 665 mil bu vs USDA 755 and still be adequate for demand. For some this includes a drop in exports of 250 mil bu from last month.

                                                    November soybean futures chart

Nov SOybeans Chart Aug 19

 

CORN

Corn futures traded lower. Talk of slow export demand and fear that USDA August numbers could eventually be proven right offered resistance. Weekend Midwest rains also weighed on prices. Weekly US corn export inspections were near 20 mil bu vs 43 last year. Season to date exports are near 1,817 vs 2,171 last year. USDA goal is 2,100 vs 2,438 last year. In South America last week Brazil famer was a big seller of corn. Brazil and Black Sea corn prices remain a discount to US. Some have now accepted USDA August corn and soybean crop acres, yield and production numbers. We will see what Pro Farmer says this week. Some could see a US 2019 corn crop near 13,900 mil bu versus 13,360 previous and 14,420 last year could also suggest that exports could drop to only 1,800 mil bu. This could raise the US 2019/20 carryout to near 2,440 mil bu vs USDA 2,181 and be more than adequate for demand. For some this includes a drop in exports of 230 mil bu from last month.

                                                       December corn futures chart

Dec Corn Chart Aug 19

WHEAT

Wheat futures traded lower. Wheat prices continue to follow corn. Corn prices are lower on concern about export demand and US crop enough to satisfy demand. Outside market were higher. Last week, there was concern about a US and World recession. This weekend, US White House was trying to down play the threat of a recession. Talk that US Fed Chairman this week will open the door for a drop in US rates at their September meeting helped US Dollar and US stocks. This weighed on feed grain and wheat prices. Weekly US wheat export inspections were near 18 mil bu vs 18 last year. Season to date exports are near 200 vs 160 last year. USDA goal is 975 vs 936 last year. USDA est World 2019/20 wheat demand near 758 mmt and trade near 183 mmt. Last year demand was near 736 mmt with trade near 173. USDA also est World crop near 768 mmt and end stocks near 285 mmt vs 730 and 275 last year. This increase supply offers resistance to prices.

                                        December Chicago wheat futures price chart

Dec Chgo Wheat Chart Aug 19


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

Aug 19  Stock Index Futures Higher on Overseas Fiscal Stimulus Plans | Download PDF

STOCK INDEX FUTURES

U.S. stock index futures are sharply higher after China said overnight that it was planning to roll out additional stimulus in an attempt to address an economic slowdown. In addition, there was support after German Finance Minister Olaf Scholz hinted that Germany may initiate an approximately $55.55 billion new fiscal stimulus package.

Also, there appears to be some progress in the U.S.-China trade situation after President Donald Trump tweeted over the weekend that trade talks with China were going well and that Chinese officials could soon be visiting the White House for additional negotiations.     

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 advanced on German fiscal stimulus hopes.

Gains in the euro were limited by news that consumer prices in the euro zone in July eased more sharply than first estimated, as inflation remained well below the European Central Bank's target. 

The Japanese yen is lower after a report showed Japan's exports dropped for an eighth straight month in July.    

In light of the reported plans for new fiscal stimulus in China and Germany, flight to quality longs were liquidated in the Japanese yen and the Swiss franc.

In spite of long liquidation today, the main trend is higher for the Japanese yen and the Swiss franc.

INTEREST RATE MARKET FUTURES

Flight to quality longs were liquidated on reports of overseas fiscal stimulus plans.

Federal Reserve Chairman Jerome Powell will speak at the Jackson Hole Economic Policy Symposium on Friday.

Market participants believe there is almost a 100% probability that the Federal Open Market Committee will lower its fed funds rate by another 25 basis points at its next meeting on September 17-18.

Another rate cut after that is very likely before the end of the year.

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 likely to embark on a new round of easier credit policies.

In spite of lower prices today, the main trend is higher for the interest rate futures markets, especially the 30 year Treasury bond futures.

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.

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