Written Commentary
MORNING AG OUTLOOK
Higher trade across much of the Ag space space overnight with new contract highs being set in corn, soybeans, CGO and KC wheat. Soybean oil has even turned positive for the week. First notice day for deliveries against Sept-26 contracts in on Monday with registrations at: 260 contracts SRW (CGO) wheat, 558 HRW (KC) wheat, 106 corn, 15 soybeans, 555 bean oil and 41 soybean meal. Energy prices are mixed and little changed with spot crude down $.55 barrel near $83, spot RBOB is up $.03 per gallon with HO up $.02. Dry across much of the US Midwest yesterday with scattered showers in the far WCB, far ECB along with the Gulf Coast. Finishing weather for this year’s soybean crop is turning much less favorable with little to no rain across the nation’s midsection over the next 7 days as temperatures surge to much above normal readings. Mid 90’s to 100+ degree temperatures across the plains and much of the S. Midwest are expected to hold through the first full week of September. In SA rain will be limited to NE Argentine and Southern Brazil where temperatures hold at normal levels. Warm and dry elsewhere. There has been modest drought relief in area’s of C. Europe however too late to benefit this summers row crops. The US $$ is little changed as it holds with within yesterday’s range. US stock indices mixed and little changed.
Corn:
Sept-26 are Dec-26 are both $.05 higher at $5.15 ½ and $5.38 ½ respectively. After taking a break from heavy buying yesterday, speculative traders are back in a buying mood overnight. We have the speculative long position at 395k after yesterday’s trade vs. the record long position of 429k from back in Oct-2010. The BAGE held their Argentine production forecast unchanged at 64 mmt, vs. USDA 63 mmt, while reporting harvest progress advanced to 88%. The European Commission lowered their EU corn production forecast to 50.1 mmt, the lowest in nearly 20 years while down 17% YOY. They also raised their import forecast 1 mmt, to 25 mmt. France’s corn ratings slipped to only 28% G/E, vs. 62% YA. Expectations for lower US production with the possibility of higher usage leaving US and global stocks much tighter than current USDA forecasts continue to fuel to price strength.
Soybeans:
Sept-26 and Nov-26 beans are up $.07 ½ at $12.64 and $12.75 ½ respectively. Oct-26 meal is up $1.40 at $335.80 while holding within yesterday’s range. Oct-26 oil is up 127 points at 69.50 holding above its 50 and 100-day MA’s. Crush margins have bounced another $.10 to $2.27 ½ bu. with bean oil PV recovering to 51%. The Trump Admin. is reportedly considering raising biofuel blending quota’s in 2027 to offset lower demand from higher SRE that are expected to be announced on Monday. This week the Trump Admin. excluded China from Iranian sanctions to allow them additional time to shift energy demand to other suppliers. US Gulf FOB offers continue to hold $.30-$.35 below Brazilian offers. China’s new crop purchases have reached 6.8 mmt (248 mil. bu.) with another 4.87 mmt (178 mil. bu.) to unknown. Announced flash sales take their purchase volume even higher. Uncertain US production combined with Chinese buying provide little wiggle room for US yields to slip from the current USDA forecast of 52.7 bpa.
Wheat:
Prices range from $.02-$.09 higher in choppy 2-sided trade overnight. CGO Dec-26 is up $.07 at $7.68, KC Dec-26 is $.08 higher at $8.30 while Dec-26 MIAX is $.02 ½ higher at $7.60 ¼. This afternoon’s CFTC report will likely show MM’s still net short CGO wheat as it captures positions through Tuesday’s trade. Ukraine’s Ag Minister expects winter wheat acres will be down this fall without providing specifics, as logistical issues continue to restrict grain shipments. Planted area in Russia likely to be reduced as well. Logistical issues are starting to lead to production/supply issues. France loaded its first wheat shipment destined for Sudan in 18 years. US spring wheat acres in drought surged 17% last week to 80%.
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.
