Written Commentary
CORN
Prices were $.02-$.03 higher with ethanol also likely to benefit from the 45Z guidelines. Spreads also firmed. The Goldman roll for the Mch-26 contracts begins on Friday. Mch-26 remains stuck in a $4.15-$4.40 range. A South Korean feed group bought 134k mt of optional origin feed corn at an average price just below $243.50/mt CF for Spring shipment. There was 488 mil. bu. of corn used for the production of ethanol in Dec-25, while above the average trade guess it was offset by a downward revision to the previous months usage. Dec-25 usage was up 1.8% YOY and brought cumulative usage in the first 4 months of the 25/26 MY to 1.863 bil. bu., up less than 1% from YA vs. the USDA est. of up 3%. Tomorrow’s EIA report could show a sharp drop in ethanol production last week due to the frigid cold. Production estimates range from 265-327 mil. gallons, vs. 327.5 mil. the previous week. Dr. Michael Cordonnier lowered his Argentine production forecast 1 mmt to 53 mmt, which now matches the USDA est. He left his Brazilian forecast unchanged at 137 mmt, well above the USDA est. of 131 mmt. EU corn imports as of Feb. 1st at 10.1 mmt are down 17.6% YOY.
SOYBEANS
Prices were mixed across the complex with beans up $.04-$.06, meal was down $2-$3 while oil jumped $.0125 per lb. Bean and oil spreads were slightly higher while meal spreads were steady to lower. Mch-26 beans has MA resistance near $10.82. Mch-26 oil for now topped out just below its January high of 54.95. Next support for Mch-26 meal is at last month’s low at $288.40. Bean oil strength was driven by the US Treasuries proposed 45Z guidelines which were published in part of a 170 page document that is subject to a public hearing in May. Key to supporting bean oil was the exclusion of the indirect land use clause which effectively adds $.32 per gallon to US green diesel tax credits, taking them up to a maximum of $.64. The EPA also announced they will release RVO and possible SRE reallocations by the end of March. Spot board crush margins firmed $.03 to $1.76 per bu. with bean oil PV stretching out to a 5 month high at 48.3%. Census crush in Dec-25 at just under 230 mil. bu. was in line with expectations and the 2nd highest ever, just below the 236 mil. from Oct-25. Cumulative crush in the first 4 months of the 25/26 MY at 892 mil. bu. are up 7.4% from YA vs. the current USDA forecast of up 5%. Crush will need to reach 1.678 bil. bu. Jan thru Aug. to reach the current USDA forecast vs. 1.615 bil. YA. Bean oil stocks at 2.179 bil. lbs. while up 29% from YA were below the range of expectations. The American Soybean Association (ASA) expects US crush capacity to increase to nearly 2.750 bil. bu. by the end of the year, up from roughly 2.625 at the end of 2025. The industry Ave. daily crush rate the past 3 months is 7.46 mil. bu. per day. Annualized, assuming 2 weeks down time for maintenance would come to 2.615 bil. bu. vs. the current USDA forecast of 2.570 bil. Dr. Michael Cordonnier lowered his Argentine production forecast 1 mmt to 47 mmt, below the USDA est. of 48.5 mmt. Many forecasts in Brazil have risen above 181 mmt vs. the Jan-26 USDA forecast of 178 mmt. EU meal imports as of Feb. 1st at 10.4 mmt are down 9.4% YOY. Soybean imports at 7.3 mmt are down 11.5%.
WHEAT
Prices ranged between $.03 lower to $.01 higher. Spreads weakened. CGO Mch-26 appears stuck between its 50/100 day MA’s. KC Mch-26 has MA support near $5.26. Little to no moisture for the plain states this week however both the 6-10 and 8-14 day outlooks look for above normal precipitation. Russian exports in Jan-26 have been trimmed to 2.5-3.0 mmt due to poor weather. Jordan passed on making any purchase in their recent 120k mt tender. EU soft wheat exports as of Feb. 1st at 12.82 mmt equal YA volume. Frigid cold in E. Europe and Russia isn’t expected to have impacted their winter wheat crop as snow cover likely provided adequate insulation.
Charts provided by CQG
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.
