Written Commentary
SOYBEANS
Soybeans ended lower. For the year, SH started at a low near 10.69. Futures rallied to a June high near 14.41. Then dopped to a Nov low near 11.93. Final push was to 13.84 before this week’s wave of long liquidation. This year was about the virus and impact of human life. The virus also disrupted supply and supply chain. US stimulus increased demand for food leading to inflation and highest World food prices in 10 years. 2022 will start as a weather year. This will prompt wild price changes. Range could be 8.00 to 20.00. Midpoint 14.00. Today’s trade below 14.00 suggest a slowdown in demand and better SA crop outlook. Weekly US soybean export sales were only 524 mt. Total commit is near 41.3 mmt vs 54.5 last year. USDA goal is 55.8 vs 61.6 ly.
CORN
Corn futures ended lower. This week, CH traded over 6.00 on talk of lower South
America corn supply and increase demand for US corn. Weekly US corn ethanol demand is at a pace that would exceed USDA goal by 100-150 mil bu. Weekly US corn export sales were 1,250 mt. Total commit is near 40.7 mmt vs 43.2 last year. China is largest buyer at 12.3 mmt followed by Mexico at 11.9. USDA goal is 63.5 vs 69.9 ly. Some feel USDA could increase US 2021 crop and demand and keep US carryout unchanged on Jan 12. This year was about the virus and impact of human life. Thanks to the front line health workers and first responders. The virus also disrupted supply and supply chain. US stimulus increased demand for food leading to inflation and highest World food prices in 10 years. 2022 will start as a weather year. This will prompt wild price changes. US corn farmers are in a favorable cash position. They are slow sellers of their 2022 crop. They remain bullish 2022 corn prices. CH started 2021 near 4.31. Rallied to 6.30 in May. Dropped to 5.06 in Sep then this week tested 6.17. 2022 price range could be 4.00 to 10.00. Midpoint 7.00. Today’s trade below 6.00 suggest a slowdown in demand and better SA crop outlook. Will need a supply surprise from USDA on Jan 12 or below average US 2022 weather to trade over the midpoint.
WHEAT
Wheat futures ended lower. A wave of profit taking continues to weigh on prices. Talk of higher World supplies offset a pick up on World export trade. US prices remain uncompetitive to buyers. World buyers also going hand to mouth. This year was about the virus and impact of human life. The virus also disrupted supply and supply chain. US stimulus increased demand for food leading to inflation and highest World food prices in 10 years. WH started at a low near 6.07. Futures rallied to a Nov high near 8.74. Then dopped to a Dec low near 7.51. Final push was to 8.24 before this week’s wave of long liquidation. KWH started at a low near 5.86. Futures rallied to a Nov high near 8.92. Then dopped to a Dec low near 7.81. Final push was to 8.71 before this week’s wave of long liquidation. MWH started at a low near 6.36. Futures rallied to a Nov high near 10.66. Has now dopped to a low near 9.87. KC wheat range could be as broad as 5.00 to 15.00. Fact the we are trading below the 10.00 midpoint suggest we are taking out weather and demand premium.
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.
