Written Commentary
Nearby soybeans, soymeal, soyoil, corn and wheat traded lower. Some profit taking after USDA report rally. US stocks were higher. US Dollar was lower. Crude was higher.
SOYBEANS
Soybean trade was mixed. Nearby loss 34 cents on profit taking from Wednesdays rally and slow US soybean export pace. Market is concerned about slower China demand and lower Brazil soybean prices versus lower than expected USDA estimate of US 2021 soybean acres. Trade is still looking for US 2020/21 soybean carryout to be below USDA guess of 120 mil bu unless prices slow demand. Even more concern is fact USDA acreage guess could suggest US 2021/22 soybean carryout could even be lower. SX gained 7 cents. Some feel SX may need to rally to increase acres. Weekly US soybean export sales were only 4 mil bu. Total commit is near 2,235 mil bu versus 1,348 last year. USDA goal is 2,250 versus 1,682 last year. China commit is near 1,320 mil bu. Most could see USDA increasing exports 25-35 mil bu. Some now are using a US 2021/21 soybean carryout near 25 mil bu vs USDA 120. Some could see SK traded over 15.00 and closer to 16.00. Weather watchers could now see a warmer and drier US summer.
Weekly soybean futures chart
CORN
Corn futures traded mixed. CK range was 5.56-5.86. CK made new highs following Wednesday limit up move after USDA estimated US 2021 acres below expectations. USDA est of March 1 stocks were near trade estimate and implied higher quarterly feed use. A wave of profit taking dropped CK back below 5.60 resistance. Most feel final US 2020/21 corn carryout will drop below 1,000 mil bu vs USDA guess of 1,502 due to higher exports and higher domestic use. These has some looking for CK to test 6.00-6.50. CZ range was 4.80-4.93. CZ gapped open higher and made new highs. Some feel US estimate of 2021 acres, trend yield plus USDA Outlook Forum demand guess could also suggest US 2021/22 corn carryout could be below 1,000 mil bu vs USDA guess of 1,552. This suggest US 2021 summer weather needs to be perfect or prices will trade higher. Most weather watchers are concerned that 2021 summer weather could be warmer and drier than normal. There was also talk that US farmers may not add to USDA est of 2021 corn acres due to higher cost of fuel and fertilizer. Weekly US corn export sales dropped to 31 mil bu. Total commit is near 2,587 mil bu vs 1,256 last year. USDA goal is 2,600 vs 1,778 last year. China commit is near 910 mil bu. Some could see final exports closer to 2,900. USDA March 1 stocks suggest USDA should increase feed/residual. Some are now estimating corn carryout below 1,000 mil bu. Given lower than expected acres some now estimate US 2021/22 carryout near 800 mil bu.
Weekly corn futures chart
WHEAT
Wheat futures traded lower. Some feel much of Wednesdays gains were due to higher corn and soybean prices. USDA March wheat numbers suggested March 1 wheat stocks were higher than expected and 2021 winter wheat acres were higher than expected. This week USDA SRW and KS HRW crop ratings improved. TX and Ok dropped. Next 2 weeks weather forecast suggest warmer and drier weather. USDA estimate of US 2021 spring wheat acres were lower than expected. There is some concern about current dry weather across parts of US north plains and Canada prairies. WK had an inside day with a range of 6.01-6.25. 200 day moving average support is 5.95. Resistance is 6.30. KWK also had an inside day with a range of 5.59-5.82. 200 day moving average support is 5.49. Resistance is 5.80. MWK had an outside day treading back below Wednesday low. Range was 5.96-6.17. Support is 5.90. Resistance is 6.10. Weekly US wheat export sales were only 9 mil bu. Total commit is near 922 mil bu versus 910 last year. USDA goal is 985 mil bu versus 965 last year. Wheat may follow corn and will be dependent on global weather.
Weekly Chicago wheat futures chart
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.
