Written Commentary
SOYBEANS
Beans started the week lower after Pro Farmer’s crop tour results came in better than expected, and bean oil is under significant pressure this morning. The tour estimated yield at 53.3 BPA, above USDA’s 52.7, and production at 4.572 billion bushels, up from USDA’s 4.519. The crop still has to get to the finish line, but the results at least eased yield concerns for the moment, although the overnight bearish price response has been tame. China demand last week was a positive, and new crop purchases by China have now reached 10+ million tonnes.
SOYBEAN MEAL
Meal closed out last week at the upper end of the weekly range and started this week with marginal gains, keeping a slight edge with the bulls. The big story for the soy complex late last week was obviously the Pro Farmer crop tour. Anticipation during the first half of last week that crop tour yield estimates may come in under the USDA forecast brought in new buying across the complex, with Managed Money increasing their net long in meal by 11,500 contracts to 83,024 net longs as of mid-last week, up 16% from the prior week. Trading volume in meal Friday was nearly average.
CORN
Friday afternoon’s bullish crop tour results prompted a gap higher move overnight and a new 3-year high in corn. Pro Farmer’s yield of 173.2 BPA was well below USDA’s 180.7, and production was estimated down 9.9% from a year ago. This was lower than expected and confirmed larger pockets of pollination and grain fill problems than most expected.
WHEAT
The market had a strong overnight session and is holding double-digit gains this morning after Russia rejected Ukraine’s truce offer over the weekend. There is little reason to expect an end to the conflict anytime soon. In addition, heat in the southern Plains is expected to continue for the next 2 weeks, although there are some chances for rain in Kansas and Nebraska. However, southern areas will see only a pop-up thunderstorm here and there, while temperatures remain over 100. degrees The longer and more severe the drought gets, the more rain will be needed to replenish soil moisture before fall seeding.
CATTLE
The cattle complex closed mixed on Friday, but the Cattle on Feed report came in bullish on placements, which were well under pre-report guesses, and on feed was slightly below guesses. Marketings were near expectations, but were a 26-year low for July. After the sharp selloff Friday morning on the announcement of tariff-free beef imports into the US for the next 90 days, the market rebounded significantly by the close and is expected to open strong this morning, likely led by the winter months.
HOGS
October hogs made a new low for 2026 early Friday but rebounded for a modestly higher close. The potential is there for a key reversal higher if the market can continue the advance and close strong today. If so, a long-awaited upside correction may be starting.
MILK CLASS III
September Class III milk finished last week with a sizable loss after reaching a new contract low on Friday. The USDA said milk production is steady nationwide, although summer heat and weather disruptions have affected output in a few areas.
CRUDE OIL
October Crude Oil was lower early Monday as the market awaited detail on the newest round of sanctions on Iran and received hints that indirect talks may be once again underway between the US and Iran. Pakistan’s army chief Asim Munir, who has built a rapport with President Trump reportedly arrived in Iran on Monday for talks.
NATURAL GAS
October Natural Gas was higher early Monday and reached its highest level since July 23. The market may be trying to establish a low ahead of the build season. The Baker Hughes rig count showed US natural gas rigs in operation were down 1 rig to 127 last week. This was up from 122 rigs a year ago and above the five-year average of 119. The forecasts show above normal temperatures over the middle two-thirds of the US next week, which could help support end- of season cooling demand and offer some offset to record US natural gas production.
DOLLAR INDEX
The USD index moved higher overnight to 98.93 ahead of the US’s economic D-day plans for Tehran. Debasement fears continue to broadly pressure the dollar after the Treasury’s move to artificially lower rates and risk premium at the long end of the curve. Investors are likely to continue to diversify away from the dollar and other major currencies amid persistent worries over government deficits, reflected through elevated long-term yields. The Treasury’s move to lower yields its means that the dollar is likely to be under pressures because if bond prices cannot move lower naturally, the foreign exchange price of owning US debt will price it out via currency depreciation in the dollar.
PRECIOUS METALS
December gold contracts hit a three-month high, building on gains from last week as investor unease over the Treasury Department’s announcement to double the buyback operations has stoked another round of the debasement trade. The move by the Treasury is bearish for the dollar as if the market cannot naturally lower bond prices and price risk premium, traders will adjust by depreciating in the dollar.
Copper prices on the LME traded 0.2% higher at $14,240, while COMEX prices rose 0.67% to $6.63 as cancelled warrants on the LME system rose. Cancellations were concentrated in warehouses in the US and Asia, free-trade zones, where the metal is likely to be sent to COMEX warehouses inside the US. Shipments to the US continue as anticipations over US tariffs on copper remain.
EQUITIES
Equity index futures were lower overnight as markets face a three-way test: further economic escalation against Iran, high long-end Treasury yields ahead of Jackson Hole, and Nvidia’s earnings as the next key verdict on the AI trade. The US is preparing a major sanctions program aimed not only at Iran but also at its trade partners and the broader infrastructure supporting Iran-related commerce; Bessent has described it as the “greatest financial offensive ever.”
INTEREST RATES
Yields moved higher at the front end and lower at the long end, as traders continue to adjust portfolio’s following the Treasury’s announcement. The 30-Year yield is at 5.24%, 6 bps below its post GFC high reached last Monday. Traders are likely to continue to pushback against like-style moves from the administration without any efforts to address the underlying problems of a rising deficit and massive debt load.
COCOA
December Cocoa was lower early Monday but till inside the consolidation of the past six weeks. World Weather Inc. said rain fell in parts of West Africa over the weekend, including much of Ghana away from the coast, northern Ivory Coast and southern Nigeria and southwestern Cameroon. Scattered showers and thunderstorms are expected to persist week and into the weekend, with northern crop areas the wettest and the coasts missing out for the most part.
COFFEE
December Coffee was higher early Monday but inside the range of the past two months. The market has had a bullish bias since the latter half of July, as near term supplies have remained tight and Brazilian producers have appeared reluctant to sell their product. Bouts of heavy rainfall in Brazil in June and July delayed the harvest and damaged bean quality, could reduce the amount that will pass grading at ICE. El Nino could threaten the upcoming crop in Brazil if it brings dry conditions during the flowering and cherry-setting stages later this year.
COTTON
December Cotton fell to its lowest level in four sessions early Monday but was still hovering near last week’s contract highs. Dry conditions in Texas and parts of the Delta have manifested in declining crop conditions over the past several weeks.
SUGAR
October Sugar was lower for the second straight session early Monday, following a move to its highest level in more than two years last week. The market has drawn support in recent weeks from concerns over the beet crop in Europe due to heat and drought and concerns about crops in Brazil, India, and Thailand as well. The situation in India sparked the latest leg, with the government announcing last week that it will allow duty free imports of up to 1 million metric tons over the next couple of months due to record domestic prices.
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.
