Written Commentary
MORNING OUTLOOK
Grains are mixed. SU is down 21 cents and near 15.04. SX is near14.87. SMU is near 403.9. BOU is near 68.25. CU is now unch and near 7.10. CZ is near 7.01. WU is up 26 cents and near 10.13. KWU is now up 20 cents and near 10.69. MWU is up 6 cents and near 11.24.
US stocks are lower. US Dollar is near unch. Crude is sharply lower and near 4 week low. Gold, silver, copper, cocoa, sugar and cotton are lower.
US Midwest 7 day outlook is dry but temps closer to normal through June 30. South 1/3 US will be hot and dry until June 26 when temps moderate. Germany and France are getting needed rains. Black Sea forecast is also wetter.
Perfect storm. Talk US Fed may become more aggressive in raising rates may be triggering long liquidation. Higher inflation may also cause drop in commodity demand. Higher inflation is raising concern about a global recession. SU, SMU, BOU all traded below 100 day moving average. Benign US Midwest temperature 2 week outlook is also triggering seasonal selloff.
US corn export inspections are down 18 pct from last year. US domestic corn basis remains strong on lower futures and increase need for corn from crusher, exporter and feeder. CU gapped open lower of Tuesday on the cooler US Midwest 2 week forecast. USDA estimated US corn crop 70 pct G/E vs 72 last week. IA and SD are highest rated states. IL, IN,MO are rated near trend. MN, ND,NE and OH are below trend. Normal temps this week should offset lack of rain. Long range maps suggest warm and drier July. EU rains has Matif corn lowest since April.
China total Oct-May meat imports are 3.9 mmt vs 5.8 ly with pork 1.2 vs 3.0.
US soybean export inspections are down 11 pct from last year. US domestic soybean basis remains strong on lower futures and increase need for soybeans from crusher and exporters. USDA estimated US soybean crop 68 pct G/E vs 70 last week. IA, AR and SD are highest rated states. IN and TN are rated near trend. MN, ND,NE, IL, MO and OH are below trend. Normal temps this week should offset lack of rain. Long range maps suggest warm and drier July. Dalian soybean, soymeal, soyoil and palmoil futures are all lower. Still concern about Asian demand and higher Indonesia palmoil exports. China Oct-May soybean imports are near 60.6 mmt vs 64.0 ly. Total China vegoil imports are 5.2 mmt vs 9.8 ly with palmoil 2.8 vs 4.7.
US wheat export inspections are starting out 22 pct below last year. Algeria and Tunisia are buying wheat with talk Egypt will tender soon. There is new talk that a Ukraine export corridor could be open soon. Most doubt it but talk is Ukraine grain exports could reach 30-35 mmt has triggered selling in corn and wheat. USDA estimated US winter wheat crop 30 pct G/E vs 31 last week. 23 pct of the crop is harvested. Early KS yields are below expectation but quality is good. Will be watching test weights. USDA rated the US spring wheat crop 59 pct G/E vs 54 last week. EU rains has Matif corn lowest since April. North China plains heat wave is increasing electrical demand to record high levels.
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.
