Written Commentary
CORN
Prices were up $.08-$.09 closing near session highs, drawing support from the surge in wheat. Sept-26 CGO wheat traded $2.35 bu. over Sept-26 corn, a new high for the contract as the market works to limit wheat in livestock feed rations. Both Sept-26 and Dec-26 corn stretched out to 6-week highs. Ethanol production slumped to 306 mil. gallons, down from 321 mil. the previous week and down 4% YOY. Production was the lowest in 10 weeks and below expectations. There was 102 mil. bu. of corn used in the production process, or 14.6 mil. bu. per day, below the 15.6 needed to reach the revised USDA forecast of 5.550 bil. bu. In the MY to date there has been 4.74 bil. bu. used, or 15.15 mbd, an annualized pace of 5.528 bil. Despite the lower production, ethanol stocks rose to 24.4 mil. barrels, above expectation and YA at 23.6 mb. Implied gasoline usage last week was unchanged from the previous week at 8.844 while up 4.2% YOY. US exports should continue to hold up well as Brazil uses more of their crop domestically. Yesterday their energy council formally approved increasing the mandatory ethanol blend 2% to 32% for a 180-day period. The last increase in Aug-25 raised it 3% to 30%. US remains competitively priced in the global marketplace. Tomorrow’s export sales are expected to range from 35-80 mil. bu. for both crop years combined.
SOYBEANS
After a slow start, prices closed higher across the complex. The non-threatening forecast in week 2 of the outlook combined with lack of announced sales to China limited the upside in early trade. Surging wheat prices combined with supportive NOPA crush data fueled higher trade across the Ag. space. As missile strikes on Ukraine/Russian ports, grain infrastructure and ocean vessels mount, cash grain offers are becoming increasingly scarce with freight insurance unavailable of extremely expensive. Beans closed $.09-$.11 higher, meal was $2-$4 higher while oil was up 25-50 points in choppy 2-sided trade. Both Aug-26 and Nov-26 managed to close above $12 for the first time in 2 months. Aug-26 oil flipped back to trading higher following bullish NOPA crush data. NOPA reported their members crushed 214.3 mil. bu. of soybeans in June-26, roughly 10 mil. above expectations and above the range of estimates. This compares to 209 mil. bu. in May-26 and only 185 mil. in June-25. Implied census crush at 220 mil. bu. places YTD usage at 2.216 bil. bu. up 8.5% from YA, in line with the current USDA forecast. Despite the higher crush and higher bean oil production, oil stocks fell to an 8-month low at 1.5 bil. lbs. down 13.5% from May. Stocks were also below the range of estimates, suggesting a surge in domestic usage. Prices will remain sensitive to China demand interest, or lack thereof. US Gulf FOB offers hold $.10-$.30 over Brazilian offers thru Nov. despite a 2nd day with no flash sale announcements. Tomorrow’s export sales are expected to range from 36-80 mil. bu. of beans, 150-600k tons of meal, and -5-10k tons of oil.
WHEAT
Prices ranged from $.27 higher in MIAX to up $.42 in KC. KC futures were briefly locked up their daily limit of $.45 (synthetically $.46-$.47 higher) before backing up. Next resistance for spot KC is $7.46 ¼, the high from May-24 on the weekly chart. CGO Sept-26 was up $.32 ½ at $6.77 ½ with next resistance at $6.94. MIAX Sept-26 was up $.25 ¼ at $6.83 ¼. Yesterday Russia’s Union of Grain Exporters stated they will be able to meet their export commitments by rerouting cargoes along different routes. The market remains skeptical as a lack of operational vessels will likely prove to be problematic. Both SovEcon and IKAR lowered their Russian wheat export forecast for July-26 to 2 mmt or lower. Their shipments typically peak in the Aug-Oct timeframe at 4-6 mmt per month. Speculative traders were still short 46k contracts of SRW after yesterday’s trade. Taiwan reportedly bought just over 98k mt of US milling wheat for Sept/Oct shipment. France’s Farm Ministry projects their 2026 soft wheat production at 32 mmt, down 4% from YA. A 3% increase in acres is more than offset by a 7% cut in yields. Supply disruptions from the world’s largest exporter of wheat coupled with lower production in the US and EU will likely keep the path of least resistance higher with volatility elevated. Tomorrow’s export sales are likely to range from 9-22 mil. bu.
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.
