Written Commentary
SOYBEANS
SH had a wide range between 13.93 and 14.13. SH ended near 14.06. Talk of lower South America supplies and higher demand or US soybeans offered support. Some feel SH could test 14.80 if US soybean demand increases due to lower South America supply. Concern about inflation and lack of new US soybean sales to China offers resistance. Soyoil rally versus soymeal also limits soybean upside. Still, private crop watchers are lowering their estimate of Brazil soybean crop below 130 mmt vs USDA 139. Some are as low as 127. If realized, this could add to US export demand. Some have already raised US soybean crush and lowered US 2021/22 soybean carryout to 310 vs USDA 350. Informa plans to estimate US 2022 soybean planted acres tomorrow. Their most recent estimate of US soybeans is near 88.8 vs 87.2 last year.
CORN
Corn futures ended mixed. CH tested 6.31 on talk of higher US corn export demand due to lower South America supplies and uncertainty over Ukraine exports. Higher demand for US corn could suggest CH testing 6.80. Some have already increased US corn exports to 2,680 and dropped US 2021/22 corn carryout to 1,200. Ukraine still needs to export 19 mmt of corn to reach USDA goal. CH dropped to near 6.20 on talk that US farmer was increasing old crop cash sales. US farmer may be cleaning out bins at current prices. CH trade volume was historically high today. Some feel tech reversal could be a sell signal. A few were asking if US transportation logistics could handle large increase in new export demand. Informa will be out tomorrow with and update of US 2022 planted acres. Informa currently estimates US 2022 corn acres near 91.5 vs 93.3 last year. Some feel CZ needs to trade higher from 5.69 to “buy” more US 2022 acres. Rally in most commodities today especially Crude oil is supportive if Managed fund money is beginning to roll from equites to commodities. Index funds are already near record long grains as a hedge against inflation. Change of futures ownership from commercial long to speculative long suggest volatile swings in prices until more is known about US 2021/22 corn demand and US 2022 corn crop.
WHEAT
Wheat futures continues to trade higher. Most feel that Wheat futures are adding a geopolitical premium to prices. Threat of Russia invading Ukraine continues to push wheat futures higher. Black Sea is estimated to export another 10 mmt of wheat. USDA dropped US 2022 winter wheat crop ratings. KS is 36 pct G/E vs 39 Jan 3 and 43 ly. CO is 20/25/17. NE 36/39/34. OK 16/20/61. TX 7 vs 29 ly. WH range was 8.00-8.31. WH settled near 8.18. Next resistance is 8.40. KWH range was 8.18- 88.49. KWH settled near 8.47. Next resistance 9.00. MWH ended near 9.47. Range was 9.345-9.65. WN- CN spread is back to near 193. Recent low was 146. Previous high was 264. Informa will be out tomorrow with an update on US 2022 wheat acres. Their current estimate is 49.0 million versus 46.7 last year. Key is Russia Ukraine conflict, Black Sea wheat exports and US spring weather.
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.
