Written Commentary
MORNING AG OUTLOOK
Lower trade across most of the Ag space overnight ahead of the 3-day holiday weekend. Agricultural markets are closed tomorrow in observance of Juneteenth National Independence. Energy prices are mostly lower as the US and Iran are set to sign a formal peace agreement tomorrow in Switzerland. AAA reports that the ave price for a gallon of gas in the US has fallen for 28 consecutive days, having fallen below $4.00 for the first time since March 30th. Spot WTI crude oil fell to a fresh 3 ½ month low overnight, currently down $1.45 per barrel near $75.35. Spot RBOB is steady while HO is down $.08 per gallon. Export sales later this AM as traders continue to weigh the potential for Chinese demand. Spot US FOB offers at the Gulf are back to a slight premium over Brazil, while at a 5-10 cent discount for Sept/Oct offers. US weather leans bearish however heavy rains across areas of the central Midwest has led to isolated flooding and field ponding. Over the next week heavy rain will continue to impact the Gulf coast. Much of the central Midwest will hold in an above normal precipitation pattern with heaviest totals shifting into the WCB. In Brazil rains to hold in the interior south while dry conditions in Mato Grosso will benefit corn harvest. Rains in Argentina is limited to the NE. Western Europe remains in a hot/dry pattern. The US $$ surged to a 13-month high. US stock indices are higher looking to recover from yesterday’s late sell-off.
Corn:
July-26 and Dec-26 are both $.03 ½ lower at $4.17 ½ and $4.45 ¼ respectively. Support for July-26 is at $4.05, a gap on the weekly chart from last Sept-26. Resistance is at $4.37. Yesterday’s EIA data showed ethanol production slipped to 324 mil. gallons last week, slightly below expectations while still below the pace needed to reach to revised USDA corn usage forecast. This afternoon’s COF report is expected to show cattle inventories at 11.726 mil. head, up 2.5% YOY. Export sales are expected to range from 45-100 mil. bu.
Soybeans:
July-26 beans are $.10 ½ lower at $11.21 ½ while Nov-26 beans is down $.09 ½ at $11.39 ¾. July-26 meal is down $2.00 at $302.80, while July-26 oil 124 points lower at 70.30. Oil has fallen below $.70 lb. for the first time in 8 weeks. Crush margins have slipped another $.08 to $3.17 ½ bu. while bean oil PV is down to 53.7%. If yesterday’s flash sale of 312k mt of soybean to unknown was indeed China, that would be a good start, however keep in mind, to reach 25 mmt of soybean sales to China ahead of Brazil’s harvest early next year weekly sales will need to average nearly 1 mmt per week. Fresh demand from China will likely be limited to state owned entities given the 10% reciprocal tariff on US imports. Export sales are expected to range from 14-28 mil. bu. of soybeans, 200-600k tons of meal and -2-15k tons of oil.
Wheat:
Prices range from $.04 lower in CGO and KC to $.04 higher in MIAX. CGO July-26 is down $.03 at $6.09 ¾, KC July-26 is $.02 ½ lower at $6.50, MIAX July-26 is $.04 ½ higher at $6.30. Heavy rain across the central and southern Midwest threaten the quality of the SRW crop while also delaying early harvest. Speculative traders have been net buyers in CGO wheat the past 4 sessions having bought another 7k contracts yesterday reducing their short position to 65k contracts. Yesterday wire services reported Algeria bought between 800-850k mt of milling wheat between $264-$265/mt CF for Aug-26 shipment. The grain is likely sourced from the Black Sea and EU. Export sales are expected to range from 10-20 mil. bu.
Interested in more futures markets? Explore our Market Dashboards here.
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.
