Grain Futures Sharply Lower
Morning Market Outlook
Grains are sharply lower. SX is down 10 cents and near 10.72. SMZ is near 378.2. BOZ is near 33.66. CZ is down 6 cents and near 4.09. WZ is down 9 cents and near 6.06. KWZ is down 9 cents and near 5.40. Some Managed funds are reducing net long positions into the US election. Concern over increase Covid cases reducing food and fuel demand is also weighing on prices. US Dollar is higher. US stocks are lower. Dow is now back below 27,000. Crude is lower. Crude futures could soon test recent support. Gold and copper are slightly lower.
Chinese Ag futures (January) settled up 63 yuan in soybeans, up 8 in Corn, down 7 in Soymeal, down 36 in Soyoil, and up 8 in Palm Oil. Malaysian palm oil prices were down 23 ringgit at 3,042 (basis January) at midsession on further position-evening and weaker rival vegoils.
Significant precipitation is still expected in West Texas and from the Texas Panhandle through Oklahoma and south-central Kansas into Thursday. This will significantly increase soil moisture and be beneficial for newly planted winter crops. US Midwest 6-10 day forecast is cool and dry. 8-14 day is warm and dry.
Brazil has rain falling in most of the nation at one time or another, but rainfall will be least frequent and least significant in the interior south. Argentina will receive showers today before dry weather occurs for about a week.
Weather remains favorable for at least a part of the driest areas from eastern Ukraine to western parts of Russia’s Southern Region. No other precipitation is advertised for the balance of the next ten days to two weeks ending Nov. 12.
Lack of new China buying US soybeans, improved global 2021 winter wheat crop conditions and increase South America corn and soybean plantings/conditions are offering resistance to prices. This despite talk of lower Brazil and Argentina old crop supplies and fact US 2020 corn and soybean harvest is near completion. There is talk that last week, US sold Brazil a few soybean cargoes. Ukraine corn harvest is 59 pct done with crop size now expected near 29 mmt. There is talk that Ukraine may announce Force Majeure on exports.
On Tuesday, Managed funds were net sellers of 2,000 SRW Wheat; sold 4,000 Corn; sold 5,000 Soybeans; sold 3,000 Soymeal, and; net sold 2,000 Soyoil. We estimate Managed Money net long 40,000 contracts of SRW Wheat; long 245,000 Corn; net long 248,000 Soybeans; net long 93,000 lots of Soymeal, and; long 88,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 5,400 contracts; HRW Wheat up 1,000; Corn up 9,100; Soybeans down 22,200 contracts; Soymeal down 1,600 lots, and; Soyoil up 785.
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.