Written Commentary
CORN
Prices were $.03 ½ to $.06 lower while spreads also weakened. Support for July-26 is just above $4.05, a gap on the weekly chart from last Sept-25. Safras & Mercado lowered their Brazilian corn production forecast .2 mmt to 139.9 mmt, still slightly above the USDA est. of 138 mmt. IMEA reports 2nd corn harvest in Mato Grosso has reached 21% vs. only 14% from YA however behind the historical Ave. of 23%. AgRural reports that across Brazil 2nd crop harvest has reached 16% just above the YA pace of 13%. The BAGE reports Argentine corn harvest has reached 48% while holding production at 64 mmt vs. the USDA est. of 61 mmt. Export inspections at 57 mil. bu. were at the low end of expectations and below the 60 mil. bu. needed per week to reach the USDA forecast. YTD inspections at 2.641 bil. are up 25% from YA vs. the USDA forecast of up 16%. Noted buyers were Mexico – 17 mil., Japan – 12 and Korea with 11 mil. Money managers were net seller of 41k contracts in the week ended last Tues. the 16th extending their short position to 46.4k contracts, the largest in 4 months. Index funds also sold 6k contracts.
SOYBEANS
Mixed trade across the complex in choppy 2-sided trade. Beans ranged from $.07 lower in spot July-26 to steady for new crop contracts. Meal ranged from $1.50 lower to steady while oil ranged from up $.01 – $.01 ½ lb. Bean and meal spreads weakened while oil spreads spiked. Nearby bean spreads fell to new lows. Despite the price surge, July-26 oil held within Thurday’s range. Spot crush margins jumped $.20 to $3.26 ½ per bu. with bean oil PV stretching out to 54.3%. D4 RIN’s generated in May rose to 736 mil., up from 710 in April, however remain below the monthly pace of 756 mil. needed to meet the mandated levels. Energy prices turned lower in choppy 2-sided trade as peace negotiations in Switzerland calmed heightened tensions. Mediators from Qatar and Pakistan maintain that the US and Iranian officials are back on track to reach a peace deal within 60 days. Chinese imports of US beans in May-26 reached 1.66 mmt, slightly above the 1.63 mmt imported in May-25. Their imports from Brazil slipped to 9.96 mmt during the month, down from 12.1 mmt in May-25. In the Jan thru May period China has imported 8.4 mmt of US soybeans, down 42.5% YOY while imports from Brazil rose 6.7% to 22.7 mmt. Yesterday the US Soybean Export Council stated they expect China will import 25 mmt of US soybeans 26/27 MY. Markets will continue to be sensitive to Chinese demand, or the lack thereof. Export inspections at 9 mil. bu. were a MY low while also below the 12.5 mil. needed per week to reach the USDA forecast. YTD inspections at 1.354 bil. are down 19% from YA in line with the USDA forecast. China and Mexico both took 2-3 mil. MM’s were net sellers of 38k soybeans, 8.5k bean oil and 35k contracts of meal. Their net long position across the soy complex slipped to 193k contracts, the lowest in 4 months.
WHEAT
Prices ranged from $.08 to $.11 lower across the 3 classes. CGO July-26 was down $.08 ¼ at $5.97 ½, KC July-26 was $.10 ½ lower at $6.33 ½, while MIAX July-26 was down $.10 ¼ at $6.12 ¾. KC July-26 has held a test of its 100-day MA support. The BAGE reports Argentine plantings have reached 58%, still well above the historical average of 42%. Despite deepening drought, soft wheat condition in France slipped only 1% to 76% G/E, still above the 68% G/E from YA. Russia kept their export taxes on feed grains at zero. IKAR reports that Russia’s export price for wheat fell $1 last week to $233/mt. They also forecast they will export 2.5 mmt of wheat in June, up from only 1.4 mmt in June-25. MM’s were net buyers of nearly 10k contracts of CGO, 12k contracts of KC while selling 4k in MIAX.
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.
