Written Commentary
CORN
Prices finished $.01-$.02 ½ higher today with several spreads reaching new lows. Sept-24 held within its recent $3.90-$4.10 range. Same with Dec-24 between $4.05-$4.25. While blazing heat and dry conditions will impact much of the plain states and WCB this week, regular shower intervals will keep yield prospects high for much of the central Midwest and ECB. Last week money managers bought nearly 25k contracts of corn, reducing their short position to 318,549 contracts. AgRural estimates Brazil’s 2nd corn crop harvest in the CS region to have reached 91%, vs. only 55% YA. Ukraine’s Farm Ministry felt early crop yields could fall 5% due to extreme heat, while later maturing crops could drop 15%. Export inspections at 42 mil. bu. were above expectations. YTD inspections at 1.837 bil. are up 34% from YA in line with the USDA forecast. Largest takers last week were Mexico – 16 mil. bu. and Japan – 12 mil.
SOYBEANS
Prices across the soybean complex were sharply mixed with major bear spreading in soybeans and soybean oil. Meal spreads firmed slightly after reaching new highs for spot Aug-24. Beans were down $.09-$.23 however well of session lows. Meal was $1-$2 higher in nearby futures with deferred contracts down $1-$2. Aug-24 oil closed 80 lower however a full $.01 lbs of session lows and the lowest price since Jan-2021. Deferred oil contracts were up 10-15. Spot Aug-24 soybeans traded to their lowest level since Oct-2020. Nov-24 beans reached a 3 ½ year low. Aug-24 meal traded to a 3 week high with next resistance at the early July high near $360. Better than expected rains across key growing areas of IA and WC IL in the past 24 hours helped fuel the price weakness. Last week MM’s were net buyers of 22k soybeans, while selling nearly 13k oil and 11,600 meal. Their long position in meal slipped to just over 15k contracts, the smallest in 3 months. Export inspections at 14 mil. bu. were at the high end of expectations. YTD inspections at 1.571 bil. are down 15% from YA in line with the USDA forecast. Germany and Mexico were the largest takers at nearly 5 mil. each. Spot board crush margins surged $.18 today to $1.98 ½ bu., the highest in 4 weeks. Bean oil PV slipped to 37.6%, a 7 week low. Rumored Chinses interest in both US and Argentine soybeans helped fueled today price rebound.
WHEAT
Prices were higher across all 3 classes today shaking off early price weakness. Chicago and KC were both $.06-$.08 higher while MGEX was up $.01-$.03. Early weakness saw spot Chicago trade to its lowest level since Aug-2020. Spot KC traded to its lowest level since Dec-2020. Temperatures have moderated across Eastern Ukraine and S. Russia however projected rains over the next week will remain lighter than normal. Too much rain and cool temperatures across the Volga Valley region of Russia is starting to negatively impact Russia’s Spring wheat production. Last week MM’s were modest buyers of Chicago and KC wheat, while light sellers in MGEX. IKAR reports Russia’s export price for wheat ended LW at $220/MT up $1 from the previous week. SovEcon reports Russia’s grain exports LW rebounded to 1 mmt, up from 710k the previous week. Wheat exports accounted for 760k tons up from 660k the previous week. Export inspections at 16 mil. bu. were at the high end of expectations and in line with the weekly amount needed to reach the USDA forecast of 825 mil. bu. YTD inspections to 112 mil., are up 11% from YA, vs. the USDA forecast of up 15%.
Charts provided by QST Charts.
>>See more market commentary 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.
