Morning Grain Outlook
USDA dropped US soybean crop ratings to 69 pct good/ex versus 72 Last week. States with biggest drops were IA and MS. One crop watcher kept his US soybean yield to near 52.0. He also estimates that 13 pct of the soybean crop yields are below trend including IA and MS, 20 pct trend AR, ND, OH and TN and 61 pct above trend IL, IN, LA, MI, MN, MO, SD, NE and WI. There were reports that the KS dryland soybean crop has been hurt due to dryness.
USDA dropped US corn crop ratings to 64 pct good/ex versus 69 Last week. States with biggest drops were IA, MI and SD. One crop watcher dropped his US corn yield to near 178.0. He also estimates that 25 pct of the corn crop yields are below trend including IA and OH, 24 pct trend MI, ND and NE and 42 pct above trend IL, IN, MN, MO, SD and WI. The above trend state total is down from 52 last week.
USDA rated the US spring wheat crop 71 pct good/ex versus 70 last week. 49 pct of the crop was harvested.
Grains are higher. SX is up 8 cents and near 9.14. CU is up 5 cents and near 3.37. WZ is up 4 cents and near 5.32. KWZ is up 4 cents and near 4.51. US stocks are higher. US Dollar is lower.
Chinese Ag futures (January) settled down 52 yuan in soybeans, down 2 in Corn, up 33 in Soymeal, up 26 in Soyoil, and unchanged in Palm Oil. Malaysian palm oil prices were down 48 ringgit at 2,614 (basis November) a 2 week low on weak August export data, stronger ringgit.
The 6 to 10 day forecast for the US Midwest still has both models indicating fairly healthy rains to fall in all of the region. Temps will run above average in most of the region for the week ahead as well as into the weekend and then will fall to below average as we work through the first half of next week and remain there for the rest of the week. The 11 to 16 day forecast for the Midwest continues with average to a bit less than average rainfall and below average temps for the Midwest while no cold air threats are seen.
One might call the news in the grains the perfect storm. Fact USDA dropped weekly US corn crop ratings more than expected, China and US had a surprise positive Phase 1 conversation, China was a big buyer yesterday of US Nov-Dec soybeans and that US Midwest rains from Hurricane Laura may be delayed helped rally futures overnight.
US Wheat exports running up 3% ahead of a year ago with the USDA currently forecasting a 1% increase on the year, Corn 12% behind a year ago with the USDA down 13% for the season and Soybeans are down 5% on the year with the USDA having a 6% decrease forecasted on the year
On Monday, Managed funds were net sellers of 6,000 contracts of SRW Wheat; net bought 15,000 Corn; sold 1,000 Soybeans; net sold 1,000 lots of Soymeal, and; bought 2,000 Soyoil. We estimate Managed Money net short 4,000 contracts of SRW Wheat; short 95,000 Corn; net long 100,000 Soybeans; net long 4,000 lots of Soymeal, and; long 58,000 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.