Ag Market View for June 30
Soybeans futures jumped higher after USDA estimated US 2020 soybean acres lower than expected and about unchanged from their March guess. USDA admitted not all US acres were planted at the time of the survey. Trade was looking for US farmers to add 1.0 million acres from March due to the favorable soybean prices versus corn. Managed funds were net buyers of 25,000 soybean, 6,000 soyoi and 10,000 soymeal. USDA estimated of US June 1 soybean stocks near 1,386 mil bu versus 1,392 expected and 1,783 last year. This is less soybean to originate if China buys. USDA estimated US 2020 soybean acres near 83.8 mil acres versus 84.7 expected and USDA March guess of 83.5 and 76.1 last year. Key now is yield. USDA is using a yield of 49.8 versus 47.4 last year. Some feel fact 83 pct of US 2020 soybean crop has a rating that suggest a trend yield or higher suggest current crop yield could be closer to 51.0. US farmers should increase 2020 cash sales near 8.90 SX.
Corn futures jumped higher after USDA estimated US 2020 corn acres lower than expected. Funds were active buyers of corn. On Monday they bought 30,000 contracts and open interest dropped 51,000. Managed funds have been buyers of 30,000 corn today. June 1 US corn stocks were near 5,223 mil bu versus 4,951 expected and 5,202 last year. This would suggest a lower 125-150 mil bu residual and US farmer may have more corn to sell than expected. USDA estimated US 2020 corn acres near 92.0 million versus 95.2 expected and USDA March guess of 97.0 and 89.3 last year. USDA indicated there was 2.2 million corn acres not yet planted at the time of the survey. Most feel it may be too late for these acres to get planted. Key now is yield. USDA is using a yield of 178.5 versus 167.4 last year. Some feel fact 83 pct of US 2020 corn crop has a rating that suggest a trend yield or higher suggest current crop yield could be closer to 180.0. US farmers should increase 2020 cash sales near 3.70 CZ. US Midwest 6-10 day and 8-14 day weather forecast calls for warm and dry weather across the heart of the US Midwest. The hottest and driest period will be the July 4 weekend. The extended weather models suggest the ridge moves back west and suggest rains return to the Midwest July 9. US Midwest 2 week forecast on Monday could be key to corn prices.
Wheat futures ended higher. Sharp rallies in soybeans and corn may have helped wheat futures. USDA June 1 US wheat stocks were a little higher than expected and acres were in line with trade guesses. USDA estimated that 41 pct of the winter wheat crop is harvested. US HRW farmer has been a steady seller of wheat. Crop is still rated 52 pct good/ex. USDA did lower US 2020 spring wheat crop from 75 pct good/ex to 69 pct. US June 1 wheat stocks near1,044 mil bu versus 980 expected and1,080 last year. This would suggest a 4Q wheat crop year feed and residual less than expected. USDA estimated US 2020 wheat acres near 44.3 million versus 44.7 expected and USDA March guess of 44.7and 45.2 last year. USDA is using a 2020 wheat yield near 49.8 versus 51.7 last year. High World wheat stocks and slow start to World trade could limit the upside in prices. Russia estimated their 2020 grain crop could exceed 125 mmt and that there may be no need for export quotas. There were no July HRW deliveries but there was 151 Chicago and 487 MLS.
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.