Written Commentary
Grains are mixed. More weakness in US summer crops while wheat is marginally higher, SU is down 4 cents and near 8.91. CU is down 3 cents and near 3.40. WU is up 2 cents and near 4.97. US stocks are lower. US Dollar is higher. Crude is lower. Gold is higher.
Traders trying to balance uncertain US Midwest summer weather versus bearish supply and demand numbers and slow global export trade. Fridays USDA US/World supply and demand report could increase trade volatility.
Chinese Ag futures (Sep) settled down 13 yuan, down 3 in Corn, down 22 in Soymeal, down 10 in Soyoil, and down 2 in Palm Oil. Malaysian palm oil prices were up 30 ringgit at 2,389 (basis September) at midsession on ideas of tightening Indonesian supplies.
Last evening’s GFS model run showed significant rainfall again in the Corn Belt in the second week of the outlook. However, it was notably wetter in the southern half of the region and notably drier in the northern half compared to the midday run. The model has likely been overdoing rainfall in the Corn Belt to an extent Jul. 17 – 22. However, occasional thunderstorm complexes are expected due to the northeastern portion of the ridge of high pressure being in the region. The midday European Model run (ECMWF) was also wetter in the second week compared to the previous run for the Corn Belt. This gives better support for areas of meaningful moisture in this timeframe. Looking at the 11 to 16 day forecast, both models indicate strong ridging bringing limited rainfall and above average temps to the Plains and Midwest.
6 Brazil meat plants are now banned to send meat to Brazil due to the virus. There were rumor of 2 US PNW soybean cargoes sold to China. This is still well below pace needed to meet USDA export goal. There remains too much corn and wheat in the World. Black Sea wheat prices firmed on talk of lower Russia crop size.
On Tuesday Managed funds were net even in SRW Wheat; net sold 10,000 Corn; sold 3,000 Soybeans; net sold 2,000 lots of soymeal, and; bought 3,000 Soyoil. We estimate Managed Money net short 39,000 contracts of SRW Wheat; short 183,000 Corn; net long 80,000 Soybeans; net short 46,000 lots of Soymeal, and; long 8,000 Soyoil.
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.
