Written Commentary
SOYBEANS
Soybeans ended lower. Funds were net sellers of 9,000 soybeans and 5,000 soymeal. SK dropped below 15.55 support. Next support is near the 20 day moving average at 15.09. SK is now down from last week’s high of 16.34. Reduced concern, for now, about Russia invading Ukraine is weighing commodity prices. There were rumors that China may have washed out 5-6 cargoes of Brazil soybeans. Some question if they need those soybeans. So far, China has not replaced those beans with US origin. Open interest continues to fall in the March contracts with positions rolling to the May. Usually higher open interest suggest a bullish bias. US Jan NOPA soybean crush was 182 mil bu and below trade estimates.
CORN
Corn futures ended sharply lower as market liquidated long position after a steady and sharply rally since the Sep, 2012 low near 5.12. Lack of evidence that South America corn supply will be down and this will increase demand for US corn offered resistance. Fact there is less concern, for now, about Russia invading Ukraine weighed on wheat, Crude, and US Dollar which also weighed on corn. There is also less concern about lower South America corn crop than soybeans and some question now if US corn demand will increase. US Farmer has been rewarding higher prices with increase cash sales. March corn open interest continues to roll to the May. Largest open interest in May long calls is near 7.00. CK dropped below Mondays low near 6.41 and settled near 6.37. Session high was 6.54. Next support is the 20 day moving average near 6.28. Most still look for US 2021/22 corn carryout near 1,220 versus USDA 1,540. Some feel USDA could keep US 2021/22 corn carryout near 1,540 on their March 9 report and could wait to see what US March 1 corn stocks are and first estimate of US 2022 corn acres on March 31. USDA will release US 2022/23 S/D at their Feb 23-24 Outlook Forum.
WHEAT
Wheat futures traded lower on talk that Russia pulled back 10,000 troops from Belarus. There remains 120,000-130,000 Russian troops around the Russia and Ukraine border. Global demand for wheat remains slow with US prices a premium to Blacks Sea and EU. There are 2 chances of moisture of US south plains favoring the south and east. Managed funds were net sellers of 13,000 Chicago wheat contract adding to their 25,000 net short. Funds were also net sellers of 25,000 corn and 14,000 soybean contracts. KWK dropped below Mondays low near 8.13 and settled near 8.07. Moving average support is initially near 8.00. KWK remains in a broads trading range between 7.50 and 8.50. Uncertain World 2022 north hemisphere weather offers support. Slow World wheat trade and uncertainty over Russia and Ukraine tension has offered resistance today.
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.
