Written Commentary
MORNING OUTLOOK
Grains are mixed to lower. SN is up 2 cents and near 16.64. SX is near 14.89. SMN is near 415.2. BON is near 79.46. CN is down 6 cents and near 7.75. CZ is near 7.29. WN is down 16 cents and near 12.14. Overnight high was 12.47. KWN is down 21 cents and near 13.01. Overnight high was 13.45. MWN is down 13 cents and near 13.39. Overnight high was 13.83.
US stocks continue lower after Wednesday sharp drop. Crude is lower. US Dollar is lower. Gold and copper are higher. Silver, coffee, cocoa, sugar and cotton are lower.
Concern about higher fuel and food prices could send US economy into a recession is weighing on equities and commodities. Lower than expected retail earnings due to higher cost also shocked US equity market.
There is also more concern that the spread of a new Covid variant in China could increase lockdowns, slow their economy and commodity import needs. Dalian soybean and RSO values are higher. Soymeal, SBO and Palmoil values are lower.
Rains continues in US central Midwest and north plains. Dryness continues in US south plains, EU and most of South America. Drier weather is helping Australia crops.
Higher July soybean futures has dropped board crush margins to near Feb lows. US cash crush margins remain firm. USDA announced new US soybean sales to unknown. Weekly US old crop soybean export sales are est near 150-500 mt, new crop 50-600 mt. Futures near season high could slow nearby sales. Starting August 1, demand for US soybean could be near record high. Trade will be watching Mondays planting pace. USDA est US 2022 soybean crop near 4,589 mil bu vs 4,435 ly. Increases are in OH, ND, SD and MN.
Corn futures are lower and continue to see long liquidation following the washout in US equities and most commodities. Crude is lower. There remains rumors that UN is asking Russia to allow Ukraine grain exports. Matif corn futures are lower but dry EU weather is offering support. Weekly US export sales are est near 150-450 mt old crop and 500-900 mt new. Corn futures may be trying to correct from an overbought position. USDA est US 2022 corn crop near 15,016 mil bu vs 15,115 ly. Increases in ND, SD and MN are offset by lower est in IA, OH and IN.
Wheat futures continues to trade lower following the washout in US equities and most commodities. WN opened near 12.47 but dropped to 12.11. KWN dropped from 13.45 to 13.05. MWN dropped from 13.83 to 13.41. There remains rumors that UN is asking Russia to allow Ukraine grain exports. Weekly US wheat export sales are est near 50-400 mt. US price remain a premium to buyers with end users uncovered. US annual HRW crop tour is reporting wheat yield 35 pct below ly. 5 state crop total could be close to 449 mil bu vs 663 ly. USDA est US spring wheat crop near 533 mil bu vs 331 ly. ND 254 vs 174 and MT 112 vs 37.
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.
