Written Commentary
CORN
Prices were steady to $.01 higher in choppy 2-sided trade while spreads firmed. Early weakness saw both old and new crop futures carve out new contract lows. Support for July-26 is near $4.05 a gap on the weekly chart from last Sept-25. Production in SA rose 5 mmt with Argentina up 2 mmt to 61 mmt, while Brazil was up 3 mmt to 138 mmt. The biggest increase however was in India where production jumped 9 mmt to 55 mmt, which will likely not impact global trade. The BAGE held their Argentine production forecast unchanged at 64 mmt while reporting harvest has reached 44%, well below the 55% reported by the Rosario Grain Exchange. Stocks/use among global exporters in the 25/26 MY increased to a 7-year high at 11.5% in June, up from 11.3% in May. The same ratio for the 26/27 MY held at 10.5%.
SOYBEANS
Prices across the complex were lower however very little changed. Beans were down $.01-$.02, meal was mixed and within $1 of unchanged while oil was down 20-50 points. Bean and oil spreads firmed while meal spreads weakened. With the exception of bean oil, prices across the complex held within yesterday’s range. Crush margins were down $.01 at $3.66 ½ bu. While US stocks held steady at 340 mil. bu. as expected, the USDA raised crush another 20 mil. which was offset by lower exports. Yesterday’s weakness was driven by speculative selling as weather remains mostly favorable while prices seek a level that stimulates Chinese interest. US FOB offers at the Gulf are steady with Brazil by Sept-26, while at a slight discount by Oct-26. The BAGE held their Argentine production forecast steady at 50.1 mmt while reporting harvest reached 95%. Yesterday the USDA raised their Argentine forecast 2 mmt to 50 mmt. Stocks/use among global exporters for the 25/26 MY rose .1% to 19.4%. The same ratio for 26/27 held at a 13-year low of 18.7%.
WHEAT
Prices were steady to $.04 lower will all 3 classes experiencing 2-sided trade. CGO July-26 is down $.02 ¼ at $5.84 ½. Near term resistance is at its 100-day MA at $6.00. KC July-26 was down $.00 ¼ at $6.34 ½. Support is at its 100-day MA at $6.27 ¾. MIAX July-26 was down $.01 ¼ at $6.18 ¼. Yesterday’s USDA data was neutral to supportive as winter wheat production was cut for the first time in the June report since 2014. Production at 1.030 bil. is the lowest in over 50 years. The Ave. yield at 46.8 bpa is the lowest in a decade. No changes to the harvested acres in yesterday’s report. The BAGE reports Argentine plantings advanced 12% in the past week to 44%. Stocks/use among global exporters for the 25/26 MY fell from 18.2% to 17.4% while the same ratio for 26/27 dropped from 16.2% to 15.3%.
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.
