Written Commentary
SOYBEANS
Soybean futures ended lower but off session lows. SF continues to trade around the 14.50 level plus or minus 20 cents. Meeting with Biden and XI failed to address trade. Some were hoping that China might buy US soybean before the meeting. Lack of China buying and mostly favorable South America weather offers resistance. Weekly US soybean exports were 68.2 mil bu vs 89.4 ly. Season to date exports are 539.8 vs 610.8 ly. Expect more choppy trade on reduced volume with South America weather key. Informa est US 2023 soybean acres near 88.5 vs 87.4 ly. SMF tested 400 with next support near 390, Resistance is 410. US, SA and China soybean crush margins are positive. Lower energy prices offered resistance to soyoil futures. Might have been a touch of long liquidation. BOF has had a nice run from July low near 55 to 75. This due to talk of increase biofuel demand and production capacity. Fear of slower US economy despite dip in inflation could raise concern about domestic fuel demand.
CORN
Corn futures ended lower. Weekly US corn exports were 19.0 mil bu vs 34.1 last year. Season to date exports are 194.2 vs 275.6 ly. Some could see final exports 150 mil bu below USDA. Expect more choppy trade on reduced volume with South America weather key. Expect more choppy trade on reduced volume with South America weather key. Informa est US 2023 corn acres near 92.0 vs 88.6 ly. CH has dropped from 7.00 to near 6.60. CH is becoming oversold.. US 2022/23 corn exports could drop to 2,000 mil bu, Feed and residual is up 100 mil bu to 5,400. Ethanol US is est near 5,250 vs USDA 5,275. This could suggest a carryout is near1,250 versus USDA 1,182, Informa est 2023 corn acres near 92.0. Yield could be near 181.0. Exports remain near 2,000. Ethanol also remains near 5,300. Carryout increases to 2,030 if feed and residual increase to 5,650. Still no word on Ukraine corridor extension. Ukraine and Brazil corn export prices remain below US. Some feel USDA could also be 150 bu higher than USDA most recent estimate. Matif corn futures ended lower, pulled by wheat and the somewhat positive rhetoric surrounding the corridor. The Black Sea was again quiet with the corridor still under discussion. Unless there is a specific objection by the weekend, the corridor will de facto be extended for another 120 days although Turkey and the UN are pushing for a 1-year deal.
WHEAT
Wheat futures ended higher. Feels like World buyers are trying to buy protein wheat. Weekly US wheat exports were only 2.8 mil bu vs 14.7 ly. Season to date exports are 363.9 vs 379.2 ly. Expect more choppy trade on reduced volume with Ukraine corridor key. Informa est US 2023 wheat acres near 47.2 vs 45.7 ly. Some look for a US 2023 wheat crop near 1,905 mil bu. That could suggest a carryout close to 665 if exports are near 820. Some heard Iraq bought 200 mt US HRS wheat. Russian wheat will still be at or close to where it is now, which would allow a significant margin. Matif reacted lower despite the weaker Euro, while the US was up, presumably on the Iraq purchase. Friday’s Geneva talks on the corridor were termed ‘fairly constructive’ with work ‘ongoing’ ahead of this weekend’s deadline, and the slightly optimistic comments from officials in Moscow contributed to some of the Matif weakness. After the corridor, the next focus is on the upcoming cold shot in Ukraine and Russia.
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.
