Grains Lower Ahead of USDA Report
USDA report day. Grains are lower. SN is down 1 cent and near 8.64. CN is unchanged and near 3.26. WN is down 3 cents and near 5.02. US stocks are lower. Crude is lower. US Dollar is higher. World equity markets are lower after US Fed Chairman suggested the US Central Bank was not thinking about thinking about raising interest rates. Economist are now also worried about dealing with significant challenge which is debt insolvency.
USDA US and World supply and demand report could take a back seat to new worries about global economic rebound and US weather.
A big precipitation change in last night’s GFS model run was the removal of rainfall across the Corn Belt and Hard Red Winter Wheat Region Jun. 18 – 20. The model run showed the front arriving four days later and suggested a large ridge of high pressure remain dominant over these regions until Jun. 22. Some showers and thunderstorms will be likely in the northern Corn Belt and northern Hard Red Winter Wheat Region. Some rain would then shift farther south Jun. 21 – 25 as the ridge of high pressure breaks down more. A drought-busting rain is not expected though in the central and southwestern Plains and summer crop stress in non-irrigated areas will likely continue to be an issue.
USDA is expected to estimate US 2020/21 soybean carryout near 426 mil bu versus 405 in May
USDA is expected to estimate World 2020/21 soybean carryout near 98.6 mmt versus 98.4 in May
Key to soybean prices is US weather and China soybean demand and which origin
USDA is expected to estimate US 2020/21 corn carryout near 3,360 mil bu versus 3,318 in May
USDA is expected to estimate World 2020/21 corn carryout near 339.7 mmt versus 339.6 in May
Key to corn prices is US weather and near record large Managed fund net short position
USDA is expected to estimate US 2020/21 wheat carryout near 897 mil bu versus 909 in May
USDA is expected to estimate World 2020/21 wheat carryout near a record 307.7 mmt versus 310.1 in May
USDA is expected to estimate US 2020 all wheat crop near 1,850 mil bu versus 1,866 in May
Key to wheat prices is 2020 harvest pressure and Europe and Black Sea crop size and World wheat demand
On Wednesday, Managed funds were net buyers of 1,000 contracts of SRW Wheat; net sold 8,000 Corn; net bought 1,000 Soybeans; net bought 2,000 Soymeal, and sold 1,000 Soyoil. We estimate Managed Money net short 16,000 contracts of SRW Wheat; net short 282,000 Corn; net long 22,000 Soybeans; net short 47,000 lots of Soymeal, and; are net 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.