July 16, 2019 | Follow us on Twitter @TradeADMIS | Download PDF
Soybean and corn continues to take out weather premium. Soymeal and soyoil were also lower. Wheat closed slightly lower. US Dollar was higher. Crude traded lower after testing $60.
November soybean trade back below the 20 and 100 day moving averages. Yesterday, managed funds turned sellers after the second week US Midwest weather forecast hinted of normal temps and rainfall. Today’s noon maps also suggested a cold front forecast for the north Midwest might did down into IA and N Il over the weekend. IL and IA areas were forecasted to miss most of the rains over the next 5-7 days. Fact USDA increased weekly soybean crop ratings and POTUS said it may take a while for a trade deal with China weighed on prices. POTUS also suggested he could still impose new tariffs on the remaining China imports. USDA rated the US soybean crop near 54 pct good/ex versus 53 last week and 69 last year. IL is rated 41 pct good/ex versus 38 last week. IA is rated 63 pct good/ex vs 64 last week. NE is rated 71 pct good/ex vs 73 last week.
Corn futures rejected the 4.60 price on the December. Our weather guy does not feel that end of July and August weather will be ideal but rains could fall across the north areas and tropical depression could drop rains across S IL and IN. Others look for pattern change next week. Most of the central Midwest will be hot and dry this week but cooler temps and scattered rains are possible early next week. Noon GFS weather models even hinted that north rains this week Could drop down into IA and N IL. USDA rated the US corn crop near 58 pct good/ex versus 57 last week and 72 last year. Improvement was in IL, IA, MO and OH. Still, IL is rated 42 pct good/ex versus 37 last week. IA is rated 62 pct good/ex vs 61 last week. NE is rated 76 pct good/ex vs 76 last week. 17 pct of the crop is pollinating vs 42 last year. December corn continues to trade in a wide range between 4.20 and 4.60. Some feel dryness across the central Midwest could support prices near 4.20. Slow export demand And large farmer ownership of last years crop could limit the upside unless there is a weather problem.
Chicago wheat futures rejected the recent highs near 5.60. WZ closed near 5.19 and below the 20 and 200 day moving averages. WZ tested the 50 day moving average today near 5.15. Fact US winter wheat harvest is advancing and there is slow export demand for US wheat offers resistance. Continued high rating of the US spring wheat crop and forecast of normal rains across the US north plains also offers resistance. Wheat is also following the lower corn prices. US winter wheat harvest is moving along. 57 pct of the crop is harvested vs 71 last year. Farmer continues to sell. US spring wheat crop is rated 76 pct good/ex vs 78 last week and 80 last year. 78 pct of the crop is headed vs 87 last year. Weekly US wheat exports were near 11 mil bu vs 17 last year. Season to date exports are near 107 vs 82 last year.
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.
July 16 US Retail Sales Strong Than Expected | Download PDF
STOCK INDEX FUTURES
S&P 500 and NASDAQ futures advanced to record highs today.
U.S. retail sales increased 0.4% in June from a month earlier, which compares to expectations of a 0.1% gain.
Prices for foreign-made goods imported to the U.S. declined 0.9% in June, which is the latest indication that inflationary pressures remain limited. Economists expected prices to fall 0.8%.
Industrial production in June was unchanged when a .1% increase was expected and capacity utilization in June was 77.9%, which compares to the anticipated 78.2%.
Two 9:00 central time reports are scheduled. May business inventories are expected to be up .4% and the July housing market index is anticipated to be 65.
Federal Reserve Chairman Jerome Powell will speak at 12:00.
My view remains that the global reflation scenario is on track and easier credit conditions from most of the world’s central banks, including the Federal Reserve, are coming and will be the dominant fundamental that supports stock index futures in the long term. CURRENCY FUTURES
The U.S. dollar index advanced when the stronger than expected U.S. retail sales report was released.
The British pound fell to its lowest level against the U.S. dollar since June of 2017 due to Brexit uncertainties and increasing prospects of easier credit policies from the Bank of England.
The Australian dollar is lower after the Reserve Bank of Australia, in the minutes of its July 2 policy meeting, left open the prospect of additional interest rate cuts in coming months, if conditions in the labor market do not improve. INTEREST RATE MARKET FUTURES
In addition to Fed Chair Powell, Federal Reserve speakers today are Atlanta Federal Reserve Bank President Raphael Bostic at 9:05, Dallas Federal Reserve Bank President Robert Kaplan at 11:20 and Chicago Federal Reserve Bank President Charles Evans at 2:30.
Financial futures markets are predicting there is almost a 100% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its July 30-31 policy meeting. A second rate cut is anticipated by financial futures markets later this year.
I expect at least a partial price recovery now that the bearish U.S. retail sales report is out of the way.
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.
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