Written Commentary
MORNING OUTLOOK
Grains are mixed. SK is up 8 cents and near 14.25. SMK is near 398.8. BOK is near 57.13. CK is 1 cent and near 5.51. WK is down 3 cents and near 6.24. KWK is down 4 cents and near 5.73. US stocks are lower.
Chinese Ag futures (May) settled up 40 yuan in soybeans, unchanged in Corn, down 33 in Soymeal, up 270 in Soyoil, and up 302 in Palm Oil. Malaysian palm oil prices were up 129 ringgit at 3,972 (basis June) at midsession supported by President Biden’s green energy push.
Argentina’s environment will still be favorable in most areas for late season crop development and the nation will receive another meaningful rain event Wednesday through Saturday. Net drying in much of Brazil, excluding the far south and northwest Mato Grosso, will benefit fieldwork advancement but also raise concern of crop moisture stress. Shower and thunderstorm activity will return to the drier areas of Brazil in early April; however, resulting moisture will likely be below normal.
Last GFS model run had a change involving a cold surge that was removed from what the midday GFS model run showed Apr. 2 – 6. Last evening’s run was much warmer in this timeframe. Above average temperatures are more likely. Last evening’s run also showed an aggressive storm system with significant rain in the Hard Red Winter Wheat Region, West Texas, and New Mexico Apr. 1 – 3.
Soyoil traded sharply higher due to higher palmoil demand and prices, talk of lower US soybean crush, tight global vegoil supplies and talk US may use soyoil for clean air for jet fuel. Concern about lower China soymeal demand and a slowdown in US soymeal exports due to apprising Argentina harvest may have also triggered selling soymeal and buying soyoil.
Corn futures are trying to recover from Mondays losses. Some feel technical signals suggest seasonal drop in futures as South America harvest nears and US spring planting weather could start soon. US cash remain strong on both good export and domestic demand. On Monday, Informa estimated US 2021 corn acres near 94.3 million. This may have been a little higher than private estimates. Plugging the acres in USDA Outlook S/D and lowering the carryin could suggest US 2021/22 carryout near 1,285.
Soybean futures are stuck in the middle of lower soymeal prices and higher soyoil prices. Some feel technical signals suggest seasonal drop in futures as South America harvest nears and US spring planting weather could start soon. US cash remain strong on both good export and domestic demand. On
Monday, Informa estimated US 2021 soybean acres near 89.7 million. This may have been a little lower than private estimates. Plugging the acres in USDA Outlook S/D and lowering the carryin could suggest US 2021/22 carryout near 135.
Wheat futures are also mixed. Chicago futures may have been supported by liquidation short Chicago wheat versus long corn spreads. KC wheat continues to trend lower on improved US HRW crop conditions. On Monday, Informa estimated US 2021 wheat acres near 45.3 million. Plugging the acres in USDA Outlook S/D could suggest US 2021/22 carryout near 703.
On Monday, Managed funds were even SRW Wheat; sold 10,000 Corn; and 8,000 soymeal and bought 9,000 lots of soyoil, and; net 1,000 lots of soybeans. We estimate Managed Money net long 5,000 contracts of SRW Wheat; long 346,000 Corn; net long 151,000 Soybeans; net long 96,000 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.
