Written Commentary
MORNING OUTLOOK
Grain calls are mixed. SU is near 14.16. SMU is near 401.2. BOU is near 63.35. CU is near 6.19. WU is near 8.46. KWU is near 9.08. MWU is near 9.48.
US stocks are lower. US Dollar is higher. Crude is mixed. Gold, silver, sugar are higher. Copper, coffee, cocoa and cotton were lower.
Since June 10, SU has dropped from 16.04 to 14.04 and near 200 DMA. CU has dropped from a Mid-May high of 7.78 to 6.19 and near 200 DMA. WU dropped from a Mid-May high near 12.86 to 8.46 and below the 200 DMA. Futures have taken out all of the weather and tight supply premium and are below the pre Ukraine price levels. Markets are oversold but have no reason yet to rally.
Selloff began after USDA failed to raise US corn and soybean demand in May, US Midwest and north plains weather improved, heavy losses in equities and energies triggered large fund selling on margin calls, drop in consumer confidence and lastly US Central Bank raising rates and increase chances for a recession. High gas and food prices are beginning to slow demand and higher wages adds to inflation and could prompt future lower companies earnings.
Egypt and Pakistan is tendering for wheat. This could help wheat futures open higher.
IA and IL rains could open corn and soybeans lower. Palmoil futures are lower on weak vegoil prices and increase Indonesia export quotas. China covid lockdowns also reduced their soybean, vegoil and hog imports. Dalian soybean, soymeal, soyoil, plamoil and corn are lower.
Ukraine war continues to tighten World supplies of corn and wheat. Some feel Black Sea wheat exports could end up down 12-14 mmt from USDA est. US Midwest forecast suggest normal weather north and east Midwest but warm and dry SW. Best crops are in IA, WI, SD and IL. Lowest rated crops are in MN, OH, NEB, TN, KY.
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.
