Written Commentary
CORN
Prices was $.02-$.03 lower closing near session lows. Early strength was weighed down by lower wheat prices. Spreads are little changed after trading to a fresh 3 month high in early action. Dec-24 briefly traded above its 50 day MA resistance before pulling back. Export sales at 88 mil. bu. were the highest in nearly 4 years and bring YTD commitments to 783 mil. bu. up 23% from YA, vs. the USDA forecast of up 1%. Current commitments represent 34% of the USDA forecast, below the historical average of 37%. Noted buyers last week were unknown – 36 mil., Japan – 18 mil. and Mexico – 9 mil. In addition, the USDA announced the sale of 125k mt (5 mil. bu.) of corn to an unknown buyer. Chinese customs data showed their Sept-24 corn imports at 310k mt were off 81% from Sept-23. In the first 9 months of 2024 imports at only 12.8 mmt are off 22.5% from YA. Rather impressed with price action today, not seriously challenging $4.00 despite a sharp drop in wheat. Still expect $3.90-$4.30 range.
SOYBEANS
Prices were lower across the complex with beans down $.10-$.16, meal was $1-$2 lower, while oil was off 50-70. Support for Nov-24 beans is at the contract low of $9.55 with resistance at the 50 day MA $10.06 ¼. After an early price surge thru its 50 day MA, Dec-24 meal settled back to slightly lower levels. Dec-24 oil also traded thru its 100 day MA resistance at 42.73 before pulling back below 42.00. Global weather continues to shift more favorable with both Brazil and Argentina expecting a good mix of rain and sunshine over the next few weeks, beneficial to planting and crop development. Much of the Central US will remain dry over the next 5-7 days enabling harvest to continue to move along quickly. Spot board crush margins firmed another $.05 to $1.84 ½ bu. closing at a 3 month high with bean oil PV holding just under 40%. Export sales at 63 mil. bu. were in line with expectations and bring YTD commitments to 803 mil. up 5% from YA vs. the USDA forecast of up 9%. China/unknown combined to buy 33 mil. bu. bringing combined commitments to 532 mil. bu. below the 567 mil. from YA and well below the 810 mil. bu. from 2022. In addition, the USDA announced the sale of 293k mt (10.7 mil. bu.) to an unknown buyer. Soybean meal sales at 251k tons were in line with expectations. YTD commitments are up 3% from YA, vs. the USDA forecast of up 9%. Soybean oil sales were less than 1k tons however the USDA announced the sale of 21k tons to Mexico. Safras & Mercado raised their Brazilian bean export forecast for 2025 10 mmt to 107 mmt vs. the USDA forecast for 24/25 MY at 105 mmt. Safras also raised their crush forecast to 55.5 mmt, vs. the USDA est. of 54 mmt.
WHEAT
Prices plunged in response to Russia’s lofty goals seeking greater control in global wheat trade. Chicago was the downside leader off $.15-$.18 with KC and MGEX down $.10-$.14. Dec-24 for all 3 classes traded above their respective 100 day MA resistance levels before pulling back. While rain is still expected this weekend in the US Southern plains, overall coverage and totals will likely not be as widespread as earlier forecasts. Exports at 18.5 mil. bu. were at the high end of expectations and bring YTD sales to 461 mil. up 17% from YA, matching the USDA forecast. YTD by class commitments are: HRW +55% vs. USDA +64%, SRW -24% vs. -27%, HRS +14% vs. +13% and white +41% vs. +28%. The USDA’s ending stock estimate for Russia is at a 9 year low. Russia’s Ag. Ministry lowered their wheat export tax 5.5% to 2,672 roubles/mt for the period ending Oct. 29th.
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.
