Written Commentary
CORN
Prices ranged from fractionally higher to $.02 lower as nearby spreads recovered after reaching new lows yesterday. Registrations for delivery remain light at only 9 contracts. O.I. fell just over 39k contracts yesterday due to the liquidation of the Mch-26 (down 67k) contracts ahead of Friday’s FND. Dr. Cordonnier lowered his Brazilian production forecast 1 mmt to 135 mmt, due to slowed 2nd crop plantings. His estimate is still above the USDA forecast of 131 mmt, however below Conab’s 138.4 mmt. Argentine FOB prices remain $.10-$.20 below US Gulf into the summer months. Brazil remain largely absent from export until the arrival of their 2nd crop this summer. EU corn imports as of Feb. 22nd at 11.5 mmt are down 16% YOY. Tomorrow’s EIA report is expected to show ethanol production last week range from 320-353 mil. gallons vs. the previous week of 329 mil. The upper end of that range would represent a new all-time high. May-26 futures rangebound between $4.25-$4.50.
SOYBEANS
Prices were moderately higher across the complex in 2 sided trade. Beans were up $.02 ½ – $.05 ½, meal was $1-$2 better while oil was up 55-65 points. Spreads firmed across most of the complex. Inside trade for May-26 beans and meal while oil prices stretched out to new contract highs. Longer term resistance for May-26 beans is at its November high $11.77 ¾. Fresh 16 month high for bean oil on the weekly chart. Unconfirmed reports that China sought US soybean offers from the PNW seemed to have lifted prices off early session lows. The EPA’s proposal for 2026 and 2027 Renewable Volume Obligations (RVO’s) and SRE reallocations is expected to reach the White House any day. Spot board crush margins firmed another $.06 ½ to $2.04 ½, a fresh 6 month high. Bean oil PV ticked up to 49.1%. After buying 5k contracts yesterday we estimate the MM long position in soybean oil is back up to 50k contracts, which if verified by the CFTC would be the largest in 6 months. The long position in soybean at roughly 164k is still shy of the Nov-25 peak at nearly 230k. O.I. yesterday was down 10k in soybeans and meal, while down only 2k in oil despite Mch-26 being down over 17k by itself. Dr. Cordonnier lowered his Brazilian production forecast 1 mmt to 178 mmt, just below the USDA’s 180 mmt however above Conab at 177 mmt. Brazilian FOB offers remain $.75-$1.10 below US Gulf out thru June-26. Although China is back from Holiday, sizable purchases of US soybeans would appear unlikely. EU soybean imports as of Feb. 22nd at 8.1 mmt are off 11% YOY. Meal imports at 12.04 mmt are down 4.7%.
WHEAT
Prices ranged from $.02 to $.05 lower across the 3 classes. Spreads weakened in CGO KC. Week 2 of the forecast shows widespread warming with above normal moisture across much of the nation’s midsection. CME data shows the CGO Mch/May spread averaged 45.5% over the most recent evaluation period which will trigger a reduction in the VSR to .00165 bu. day starting Mch. 19th down from the current .00265. No change in the VSR for HRW wheat holding at .00265 bu. day. Jordan passed on making any purchase in today’s tender for 120k mt of wheat. After surging over $.80 bu. off the Dec-25 low, Mch-26 CGO futures at $1.40+ over Mch-26 corn has likely priced itself out of feed rations. Improved rain forecasts for the S. plains has weighed on the recent price recovery. EU soft wheat exports at 15.4 mmt are up 9.7% YOY. Wire services are reporting Algeria bought an undisclosed volume of wheat with prices centered around $259-$260/mt CF.
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.
