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DAILY AG MARKET VIEW REPORT 

December 6, 2019  |  Follow us on Twitter @TradeADMIS  | Download PDF

SOYBEANS

January soybeans traded just three cents higher on the day into the midsession but near five cents off of the highs. The small gain was disappointing given news from China officials that they will waive import tariffs on some soybeans and pork shipments from the US as both sides continue to work on reaching an agreement. Canola production in Canada is projected at just 18.6 million tonnes, down 8% from last year, according to Statistics Canada. This is 1 million tons less than the average trade estimate. Soybean oil is trading sharply higher on the day into the midsession while meal is trading $2.50 lower on the day after first rallying to the highest level since November 21st. 

CORN

March corn traded 1 ¾ cents lower on the day with the low at 375 a new low for the week. The market did trade higher early and tested the 380 level as the soybean market was up sharply following news that China officials will waive import tariffs on some soybeans and pork shipments. While the stock market is sharply higher on the day, and energy prices are higher as well, strength in the US dollar may be seen as a limiting factor. The USDA announced a sale of 245,872 tons of US corn had been sold to Mexico. 

WHEAT

March wheat traded four cents lower on the session into midday and down to the lowest level since November 25th despite strength in soybeans, favorable economic news and an upbeat trade situation to end the week. Ample world supply continues to pressure the market and traders see the strong US dollar today as a reason to suspect that US wheat will have trouble on the world export market. Stats Canada pegged Canadian wheat production at 32.3 million tons, up 0.5% from last year. This was slightly below trade expectations at 32.6 million tons.

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 

December 5  Industrial Commodities Mostly Higher   PDF

STOCK INDEX FUTURES
 

Stock index futures advanced due to optimism that the U.S. and China were moving closer to signing a “phase-one” trade deal.

Initial jobless claims declined 10,000 to 203,000 in the week ending November 30. Economists had expected 215,000 jobless claims.  

The 9:00 central time October factory orders report is estimated to show a 0.3% increase.

My view remains that the global reflation scenario will continue and easier credit conditions, although likely at a slower pace, from most of the world’s central banks are coming and will be the dominant fundamental that underpins stock index futures.

CURRENCY FUTURES

The U.S. dollar is lower in spite of news that the U.S. trade deficit narrowed in October to the smallest in 16 months. The foreign-trade gap in goods and services was $47.20 billion when economists had expected a trade deficit of $48.50 billion.  

The euro currency is higher in spite of news that German manufacturing orders fell in October on the month.    Manufacturing orders declined 0.4% in October when economists had forecast a 0.2% increase. 

The British pound advanced to a seven month high as opinion polls suggested Prime Minister Boris Johnson's Conservative Party would win a majority in next week's general election.

Japan’s Prime Minister Shinzo Abe's cabinet approved a $120 billion stimulus program, which is Japan's largest in over three years. 

INTEREST RATE MARKET FUTURES

Flight to quality longs were liquidated in light of the more optimistic feeling on the state of the U.S.-China trade negotiations.

Randall Quarles of the Federal Reserve will speak at 9:00.

The Federal Open Market Committee’s next policy meeting will be held on December 10-11.   No change in policy is likely.

Financial futures markets are suggesting there is a 53% probability that the FOMC will lower its fed funds rate by 25 basis points at its July 29, 2020 policy meeting. Yesterday the probability was 55%.

Interest rate market futures are likely to trade broadly sideways in the longer term, although the flight to quality influence will probably reemerge from time to time.

INDUSTRIAL COMMODITIES

If I am correct in my belief that the global economy is stabilizing, it is likely that the industrial commodities, including copper, crude oil and lumber will advance in price in the long term.

I will be out of the office December 6th through December 11th.

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 November 8)
USDA Nov 2019
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FOMC MEETING OUTLOOK (Oct 30)
FOMC Meeting
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USDA QUARTERLY REPORT (released September 30)
USDA Crop Report
Download PDF