Written Commentary
MORNING OUTLOOK
Grains are mixed. SK is unchanged and near 14.36. SX is up 14 cents and near 12,71. SMK is near 421.2. BOK is near 52.66. CK is up 11 cents and near 5.76. WK is down 3 cents and near 6.14. KWK is down 3 cents and near 5.72. MWK is near 6.10. US stocks are higher. New US infrastructure plan could add jobs. Crude is higher.
For the week, SRW Wheat prices are up roughly 2 cents; HRW up 5; HRS down 12; Corn is up 24 cents; Soybeans up 38 cents; Soymeal up $17.00, and; Soyoil up 75 points. Crushing margins are up 7 cents at $0.56 (July); Oil share down 1% at 37%.
For the month, SRW Wheat prices were down roughly 42 cents; HRW down 58; HRS down 26; Corn was up 12 cents; Soybeans up 36 cents; Soymeal up $6.00, and; Soyoil up 195 points. Crushing margins were down 4 cents $0.62 (July); Oil share up 1% at 37%.
Chinese Ag futures (May) settled up 114 yuan in soybeans, up 16 in Corn, up 95 in Soymeal, up 84 in Soyoil, and up 122 in Palm Oil. Malaysian palm oil prices were up 117 ringgit at 3,543 (basis June) at midsession following gains in soyoil prices.
Last evening’s GFS model run was notably drier in the Northern Plains Tuesday through Thursday of next week. US 6-10 day forecast is warm and dry. Some talking about a dry and warm US summer like 1988.
Conditions in Argentina and Brazil are still expected to be mostly favorable through at least the next ten days. A gradual return of rain is expected in northern Brazil.
USDA March 1 guess of US 2021 soybean acres were too low for forecasted demand. November soybean needs to rally to buy more US 2021 acres. Given US 2021 acres, trend yield and forested crush demand and China demand, US 2021/22 carryout is negative. USDA will not print a negative carryout. Forecast of higher biofuel demand for soyoil also suggest US 2021/22 soyoil carryout could also be negative. USDA should lower South America soybean crops which could increase demand for US.
USDA est of US 2021 corn acres were lower than expected. December corn will need to rally to buy more acres. USDA est of March 1 stocks suggest higher feed use. This plus higher exports could drop US 2020/21 carryout below 1,000 mil bu. Given US 2021 acres, trend yield and forested demand and China demand, US 2021/22 carryout is 400 mil bu below forecasted crop/supply. USDA should show lower South America corn crops which could increase demand for US.
USDA wheat March 31 data was a little negative. March 1 stocks were higher than expected and winter wheat acres were also higher than average trade guess. Spring wheat acres though were lower. This suggest MLS wheat may need a premium over Chicago and KC. Higher corn prices and lower US corn supply could suggest more wheat feeding. US HRW 6-10 day forecast is warm and dry.
The player sheet had funds net buyers of 13,000 contracts of SRW Wheat; bought 35,000 Corn; net bought 32,000 Soybeans; bought 18,000 lots of Soymeal, and; bought 15,000 Soyoil. We estimate Managed Money net long 2,000 contracts of SRW Wheat; long 374,000 Corn; net long 148,000 Soybeans; net long 76,000 lots of Soymeal, and; long 73,000 Soyoil.
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.
