June 19 | Follow us on Twitter @TradeADMIS | Download Report
Soybeans ended lower. SU is near 9.01. Today’s range was 8.53-9.17. US POTUS proposed a 10 pct tariff on $200 bil dollars of additional China goods imported into the US. July 6 now looms as a big day for the market. That is the deadline for US and China to impose tariffs. Some hope talks before then could avoid the tariffs. Some est that US farmers have lost $100 per acre in revenue because of the tariff talk. Word that US may be considering measures to try to compensate US farmers may have offered support. USDA is rating the US 2018 soybean crop 73 pct good/ex vs 67 last year. MN is rated 83 pct good/ex, OH 81, IA 80, IL 77 and TN 76. Like corn, 64 pct of the crop is rated above trend yields. Only 13 pct is rated below trend.
Corn prices dropped sharply along with soybean and soymeal on word that US would impose a 10 pct tariffs on $200 bil dollars of additional China imported goods. Panic selling sent CU down to near 3.48. Funds added to their new net futures short position. CU ended near 3.63. Some feel that CZ near 3.75 would be trading closer to 3.90-4.00 if not for the tariff talk. Same group could see CZ trade below 3.00 if tariffs are imposed and US weather remains favorable. A stationary front is dropping rains across some of the best Midwest summer crop growing areas in the country. Some in S MN and NC IA are even complaining about too much rain. USDA is rating the US 2018 corn crop 78 pct good/ex vs 67 last year. Best crops are in IL, IA, IN, MN, NE, OH and ND. 66 pct of the crop is rated above trend yields. Only 14 pct is rated below trend. Trade est US cattle on feed near 103 pct, placements 96 and marketing 105. There was huge volume today in corn options.
Wheat futures closed lower. Higher US Dollar, slow demand for US export, ongoing US winter wheat harvest, higher US spring wheat crop rating and drop in commodity prices due to US trade wars weighed on prices. This despite concern about a lower 2018 Russia crop. 27 pct of the US winter wheat crop is harvested vs 19 average. KS is 23 vs 11 ave. MO is 44 vs 23 ave. Yields are near USDA est. HRW quality is better than last year. Warehousemen are bidding up for HRW to put into space. USDA rates the crop 39 pct good/ex vs 49 last year. US spring wheat crop ratings surged on better weather. USDA now rates the crop 78 pct good/ex vs 70 last week and 41 last year. ND is rated 80 pct good/ex.
June 19 | Download Report
STOCK INDEX FUTURES Stock index futures fell as the U.S - China trade dispute heats up.
President Donald Trump threatened to impose a 10% tariff on $200 billion of Chinese goods and Beijing warned it would respond with “qualitative” and “quantitative” measures.
President Trump said if China retaliates with additional tariffs, he would place further tariffs on Chinese goods of up to a total of $450 billion.
U.S. housing starts rebounded in May to their highest level since 2007, but permits fell sharply. Housing starts rose 5.0% in May from the prior month to 1.350 million. This is the highest level since July 2007. Economists had expected a 1.8% increase for starts.
However, residential building permits, which can indicate how much construction is in the pipeline, declined 4.6% to an annual rate of 1.301 million last month. Economists had expected a .1% decline for permits.
Although the global trade situation appears to be getting worse, we are seeing less and less negative reaction in the financial markets to bearish trade news. CURRENCY FUTURES The U.S. dollar hit an 11 month high, as the U.S. threatens further tariffs on China.
The euro currency is lower in spite of comments from European Central Bank President Mario Draghi when he said the ECB could restart its bond buying program if necessary.
The British pound fell to a seven month low after U.K. Prime Minister May lost a vote on her Brexit legislation in the House of Lords.
Flight to quality buying came into the Japanese yen as a result of the intensified global trade tensions. INTEREST RATE MARKET FUTURES Flight to quality buying is coming into the interest rate futures markets in light of escalating trade tensions between the U.S. and China.
What appears to be a worsening global trade situation is producing less and less flight to quality buying in recent weeks. Although the September thirty year Treasury bond futures are higher today, they are under the flight to quality highs that were made on May 30 at 145^28.
The probability of a fed funds rate hike at the Fed’s September 26 meeting is 80%, which compares to 84% yesterday.
Although geopolitical events will inevitably develop from time to time, which will likely produce short periods of flight to quality buying, the main trend for futures is lower.
This special monthly report recaps the financial, energy, metal, currency, grain and livestock market trends exclusively by the ADMIS Research Team. May Edition April Edition
USDA Supply/Demand Crop Report (released June 12) Download PDF
US MAY EMPLOYMENT DATA (released June 1) Download PDF
US Q1 GDP (released May 30)
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