March 21, 2019 | Follow us on Twitter @TradeADMIS | Download PDF
Soybeans, soymeal, corn and wheat traded higher. US Dollar was sharply higher. US stocks were higher. Crude traded over $60.
Talk that US Midwest could stay wet for the next 3 months may have triggered managed fund short covering in soybean and soymeal. Early trade was lower on slow weekly US soybean export sales and word that POTUS wanted to keep tariffs on China imports even if there is a deal. This could enforce a new deal. Rumors than China was buying US corn helped rally soybean and soymeal futures. Weekly US soybean export sales were near 399 mt. Total commit is near 41.5 mmt vs 50.0 last year. USDA goal is 51.0 versus 58.0 last year. USDA estimate World 2018/19 soybean export trade near 154.2 mmt vs 153.0 last year. Brazil exports are estimated near 79.5 versus 76.2 last year. USDA estimates China imports near 88.0 mmt vs 94.1 ly.
Corn futures made new highs for the move on fund sort covering. Initial buying was linked in part to concern that US farmer may not get all intend 2019 corn acres planted due to wet weather. NOAA 30 and 90 day weather forecast suggested more above normal rains for the Midwest. Additional short covering may have been triggered by strong rumors that China may be buying US corn for April and May shipment. Rumors of China buying US corn started last week. US cash barge values improved on new commercial buying. Fact Crude futures traded over $60 and ethanol futures over $1.42 may have also offered support. Weekly US corn export sales were near 855 mt. Total commit is near 41.7 mmt vs 45.1 last year. USDA goal is 60.3 versus 61.9 last year. USDA estimate World 2018/19 corn export trade near 167.0 mmt vs 146.6 last year. Brazil exports are estimated near 29.0 versus 25.4 last year. Argentina 30.0 versus 20.3 ly. Ukraine 29.0 versus 18.0 ly.
Wheat closed mixed. Chicago was unchanged and near 4.65. Fund short covering may have helped KC May close up 2 cents and near 4.46. Minn May slowed it uptrend and closed down 2 cents and near 5.68. Higher US Dollar and lower Crude may have offered resistance. Slow weekly US Wheat export sales may have also offered resistance. Rally in corn due to talk go China buying may have offered support. US trade advisors are still looking for China to buy US wheat if there is a new trade deal. Weekly US wheat export sales were near 299 mt. Total commit is near 23.1 mmt vs 22.4 last year. USDA goal is 26.3 versus 24.5 last year. USDA estimate World 2018/19 wheat export trade near 178.9 mmt vs 181.2 last year. Russia exports are estimated near 37.0 versus 41.4 last year, EU 23.0 versus 23.3 ly. Canada 24.0 vs 22.0 ly, Ukraine 16.5 versus 17.8 ly.
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 Archer Daniels Midland Company. 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.
Mar 21 | Download PDF
Stock Index Futures Recovery Likely From Early Lows
STOCK INDEX FUTURES
In what appears to be a “buy the rumor and sell the fact” situation, stock index futures advanced ahead of yesterday’s Federal Open Market Committee meeting and came under profit taking pressure after the as expected Fed’s dovish policy statement was out of the way.
The uncertain outcome of the U.S.-China trade talks and a still unresolved Brexit drama in Europe caused investors to remain cautious.
President Donald Trump yesterday warned that Washington may leave tariffs on Chinese goods for a “substantial period” to ensure Beijing’s compliance with any trade agreement. China-U.S. trade talks are scheduled to resume next week.
The Philadelphia Federal Reserve manufacturing index was 13.7, which compares to expectations of 4.6.
U.S. jobless claims fell 9,000 to 221,000 in the week ended March 16, as layoffs showed no sign of rising. Consensus expectations called for initial claims to be 225,000.
The 9:00 central time February leading indicators report is expected to show a .1% increase.
Since the lows were made in late December, stock index futures have been performing better than the news would suggest, which should be viewed as a sign of long term strength.
I expect a recovery for stock index futures from the current lower levels. CURRENCY FUTURES
After a sharp decline yesterday afternoon for the U.S. dollar, when the Federal Reserve reiterated its dovish monetary policy stance, prices have partially recovered today.
The British pound continues to trade lower due to the uncertainties of the Brexit situation.
The Bank of England’s Monetary Policy Committee agreed unanimously to leave the U.K. central bank's main policy rate at 0.75% and the size of its bond portfolio unchanged.
Markets in Japan were closed for a public holiday.
The Canadian dollar is lower in spite of news that wholesale sales climbed 0.6% in January. INTEREST RATE MARKET FUTURES
Futures advanced yesterday afternoon with follow-through today after the Federal Open Market Committee delivered a more dovish than expected policy statement. This is the Fed’s second dovish surprise in a row.
The U.S. central bank cut its expectations for 2019 interest rate increases from two to zero and downgraded its economic outlook. Chairman Jerome Powell stressed that it was a “great time” to be patient. In addition, Powell said the Fed will freeze bond sales from its $3.8 trillion balance sheet later this autumn.
Financial futures markets are predicting there is a 63% probability that the fed funds rate will remain unchanged at the current level of 2.25%-2.50% this year. There is a 37% chance for a 25 basis point or more decline in the fed funds rate in 2019.
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 Archer Daniels Midland Company. 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.
This special monthly report recaps the financial, energy, metal, currency, grain and livestock market trends exclusively by the ADMIS Research Team. February Edition January 2019 Edition December Edition November Edition October Edition
USDA SUPPLY/DEMAND REPORT (released March 8) Download PDF
US EMPLOYMENT DATA (released Jan 4) Download PDF
US EMPLOYMENT DATA (released Dec 7) Download PDF
US Q3 GDP (released Nov 28) Download PDF
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