Written Commentary
CORN
Prices were $.02-$.03 lower with spreads weakening a bit. Nearby contracts were not able to put together consecutive higher or lower closes all week. Inside trade for Mch-26 futures as settled close to its 50 day MA. Prices continue to hold in a $4.35-$4.55 range. The BAGE reports Argentine plantings have reached 44%, just above the 5-year Ave. and just below the YA pace at 46%. This afternoons CFTC report will show the positioning of traders as of Oct. 31st. A Reuters survey for next Tues. USDA WASDE report shows traders expect US corn ending stocks slipping 30 mil. bu. to 2.124 bil. bu. The biofuels industry and the American Petroleum Institute are urging the Trump Admin. to allow year round sale of E-15.
SOYBEANS
Prices were lower across the complex with beans down $.12-$.14 closing near session lows, meal was off $3-$4, while oil was down 10 points. Bean spreads weakened while product spreads were mixed. Jan-26 beans have fallen to their lowest level in a month as speculative traders continue to shed length. Prices did hold support above last month’s low at $11.03 ½. Another fresh 5 week low for Jan-26 meal with next support between $300-$305. Jan-26 bean oil rejected trade above its 100 day MA, next support at the 50 day at 50.98. Prices broke despite the USDA announcing a flash sale of 462k mt (17 mil. bu.) of soybeans to China. Announced sales to China since late Oct-25 have reached just over 2.7 mmt, or 99 mil. bu. Sales to China will need to reach just over 700k tons, 25 mil. bu., per week thru the end of Feb-26 in order to reach 12 mmt as suggested by US Treasury Sec. Bessent. It would appear to be a tall order with Brazilian FOB offers 70-90 cents below US for Q1 shipments. Spot board crush margins improved $.04 ½ to $1.39 ½ with bean oil PV increasing to 45.7%. The BAGE reports Argentine plantings at 45%, just below YA and historical average. The Reuters survey shows analysts expect bean stocks to jump 10 mil. bu., to 300 mil., vs. our forecast of a 20 mil. bu. increase.
WHEAT
Prices range from $.04 lower in CGO to steady in MIAX. All 3 classes experienced 2 sided trade. Mch-26 CGO has resistance at its 100 day MA at $5.44 1/4. Mch-26 KC rejected trade into new highs for the week. The BAGE reports Argentine harvest has reached 45%. The Reuter’s survey expects wheat stocks will slip 10 mil. bu. while we expect no change with stocks holding at 901 mil. bu. Upside price potential would appear limited with expected growth in global stocks however as the war in Ukraine continues prices will be sensitive to potential disruptions to the flow of grain from the region. The UN says global food prices have fallen for a 3rd consecutive month, down 1.2% from Oct and down more than 20% from their peak in Mch-22 shortly after the Russian invasion of Ukraine. USW Southern plains are arid over the next week.
Charts provided by QST.
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.
