Grains Higher, Rally in Equities Helping
Grains are higher. SU is up 5 cents and near 8.79. CU is unchanged and near 3.26. WU is up 3 cents and near 5.29. US stocks are higher. US Dollar is lower. Crude is higher.
Talk that a Pharmaceutical company had positive result on a vaccine tested with humans helped rally US equities. There is a saying that rising tides help all boats. The news helped rally commodity prices. Doctors suggest that if everyone in US wore a mask for 3 weeks the virus would be behind us.
Chinese Ag futures (Sep) settled up 41 yuan, down 2 in Corn, up 3 in Soymeal, up 100 in Soyoil, and up 142 in Palm Oil. Malaysian palm oil prices were up 35 ringgit at 2,535 (basis September) at midsession.
Overnight US Midwest rains were in S IA, NE KS and N MO. Rains today will move into IL and WI. The 6 to 10 day forecast has models in agreement with moderate rainfall for most regions of the Midwest. The 11 to 16 day forecast for the Midwest remains mixed with the GFS model showing average to a bit below average rains and average temps while, the European still sides with ridging.
Soybean prices supported by hope of China buying US soybeans. Still question is fact that China has bought 30 mmt of Brazil soybeans May-July is for need or increase inventory so they do not need to buy from US. World vegoil prices continue to rally due to tight supply. China rapeseed price are up sharply on concern about flooding.
Corn futures are steady at best. Cash is firm but time is running out on hurting the US 2020 crop enough to lower carryout and increase prices. US corn export prices are the highest in the World and Covid is still reducing feed demand. Weekly US ethanol production should be up but is demand increasing enough to lower stocks?
French and Black Sea wheat prices continue to firm on crop worries. Russia winter wheat yields though are improving but spring wheat areas are hot/dry. Still Black Sea vessel loading line up is thin suggesting slow starts to import buying due to Covid.
On Tuesday, Managed funds were net buyers of 2,000 contracts of SRW Wheat; net sold 7,000 Corn; bought 5,000 Soybeans; net bought 1,000 lots of soymeal, and bought 4,000 Soyoil. We estimate Managed Money net short 8,000 contracts of SRW Wheat; short 190,000 Corn; net long 83,000 Soybeans; net short 30,000 lots of Soymeal, and; long 14,000 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.