Explore Special Offers & White Papers from ADMIS

Grains Higher on Weather Conditions

Morning Outlook

Grains are higher. SX is up 5 cents and near 10.56. SMZ is near 364.5. BOZ is near 33.10. CZ is up 2 cents and near 3.91. WZ is up 5 cents and near 6.13. KWZ is up 5 cents and near 5.49. Algorithm machines continue to be buyers. Managed funds continue to add to near record longs. Crude is higher. Gold is higher.

Chinese Ag futures have been closed for a week long holiday (return tonight). Malaysian palm oil prices were down 7 ringgit at 2,863 (basis December) at midsession breaking a 3 day climb as supply concerns limited losses.

SX is above 10.50, SMZ is above 360, CZ is above 3.90 and WZ is above 6.00. All of this strength is linked to dry weather in US plains, Russia and South America, talk of friendly USDA report and higher demand for US corn and soybean exports.

The US Midwest 6 to 10 day forecast has differences with the models. Both have another front moving through the middle of next week. The GFS has little in the way of rain with it while, the European sees moderate rainfall for MO, IL, MI, SE WI, and NW IN with light amounts elsewhere. Temps will move to above average by the weekend and stay a bit above average through most of next week. The Southern Plains over the 6 to 10 day period has below average rainfall for the region. Temps will be running above average.

The Brazilian growing regions has light rainfall for the central part of the region today and tomorrow. By the weekend, light to moderate rainfall begins to fall in the northern sections of the growing region spreading into early next week. The 6 to 10 day forecast sees widespread rain fall in the northern regions with moderate amounts of around 85% coverage. The Argentine growing regions has mostly dry weather over the next 10 days with some light rainfall in Buenos Aries later in the weekend.

The GFS model increased scattered showers in eastern Ukraine and a few Russia Southern Region locations after October 19. Romania, Bulgaria, and Moldova get timely rainfall along with western Ukraine. A few showers might occur in some of the driest areas October 20-23.

US weekly soybean export sales are estimated near 1,500 -2,500 mt versus 2,591 last week. USDA goal is 57.8 mmt versus 45.7 last year. World trade is estimate near 166.3 versus 165.8 last year. China may be looking for US Feb due to late Brazil plantings. Weekly US soymeal export sales are estimated near 150-500 mt versus 523 last week.

US weekly corn export sales are estimated near 700 -1,500 mt versus 2,027 last week. USDA goal is 59.0 mmt versus 44.8 last year. World trade is estimate near 186.3 versus 170.3 last year. Corn remains cheapest feed grain in World.

US weekly wheat export sales are estimated near 250 -600mt versus 506 last week. USDA goal is 26.5 mmt versus 26.2 last year. World trade is estimate near 189.4 versus 190.3 last year. CME Black Sea wheat futures continue to make new all-time highs.

On Wednesday, Managed funds were net buyers of 12,000 contracts of SRW Wheat; net bought 15,000 Corn; net bought 6,000 Soybeans; bought 5,000 Soymeal, and; net sold 1,000 Soyoil. We estimate Managed Money net long 64,000 contracts of SRW Wheat; long 205,000 Corn; net long 283,000 Soybeans; net long 102,000 lots of Soymeal, and; long 97,000 Soyoil.

Global food prices continued to climb higher in September, supported by rebounding demand and concerns that dry weather could harm crop harvests, the United Nations’ Food and Agriculture Organization said; the UN FAO’s Food Prices Index, which tracks the price of a basket of the most common foodstuffs such as grains, vegetable oils, and meat, rose 2.1% in September to its highest level since February; the overall rise in food prices was driven mainly by cereals and vegetable oils.

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.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started