Written Commentary
SOYBEANS
Soybean futures ended lower but off session lows. Talk of lower South America soybean crops offered support at key prices levels. On again off again concern about Russia invading Ukraine increased selling late in the session. Crude oil also rallied on concern a war would reduce Russian oil supplies. Another crop group estimated the Brazil soybean crop at 122 mmt versus their previous estimate of 130. Drop due to dryness over parts of south and west Brazil and wet conditions in north. Argentina 10 day forecast is warm and dry. There were no new US soybean sales announced today. Weekly US soybean exports were 42 mil bu vs 34 last year. Season to date exports are 1,426 vs 1,848 last year (-23 pct). USDA goal is 2,050 vs 2,261 last year (-9 pct).
CORN
Corn futures ended higher and off session lows. Corn futures started overnight trading higher on talk of lower South America corn crop, concern over Black Sea corn exports, and talk of higher inflation. Talk that Russia may not invade Ukraine this week dropped most commodity prices including corn. Late concern that Russia could still invade Ukraine rallied Crude and corn. There were no new US corn sales announced today. Weekly US corn exports were 57 mil bu vs 52 last year. Season to date exports are 789 vs 902 last year (-13 pct). USDA goal is 2,425 vs 2,753 last year (-12 pct). Open interest has increased since the end on 2021. Trade is using 2021/22 corn carryout near 1,200 vs USDA 1,540. Most feel corn exports at 2,650 vs USDA 2,425. Most estimate ethanol use near 5,400 versus USDA 5,325. Most look at US 2022 corn acres near 91.0 vs 93.4. Yield is estimated at 180.5 vs 177.0. Demand is estimated at 15,035 mil bu vs trade est of 15,155 this year. This suggest a carryout of 1,100 versus USDA Baseline of 1,952. This would suggest a strong need for higher acres and another record yield or prices may need to rally to ration demand.
WHEAT
Wheat futures followed the headlines today. Wheat open higher overnight on follow through buying from Friday and do to concern about Russia invading Ukraine. During the day session, word from Russia that they are not planning to invade Ukraine sent most commodity prices including wheat traded lower. Late in the session word that Russia may invade Ukraine rallied wheat futures into the close. WK ended near 8.05 with range 7.87-8.20. KWK ended near 8.32 with range 8.13-8.46. MWK ended near session highs at 9.67. Weekly US wheat exports were 16 mil bu vs 15 last year. Season to date exports are 532 vs 642 last year (-17 pct). USDA goal is 810 vs 992 last year (-19 pct). This week, precip could fall across parts of TX and OK. Long range forecast is dry for the US south plains. It is too early to trade dryness in US south plains.
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.
