Grains Slightly Higher
Grains are slightly higher. SU is up 1 cent and near 8.85. CU is up 1 cent and near 3.10. WU is up 1 cent and near 5.09. US stocks are higher. US Dollar is lower and testing recent lows. Crude is higher and testing recent highs. Gold continues to trade higher.
Chinese Ag futures (January) settled down 53 yuan in soybeans, down 2 in Corn, down 36 in Soymeal, down 84 in Soyoil, and down 12 in Palm Oil. Malaysian palm oil prices were down 20 ringgit at 2,748 (basis October) at midsession on weaker rival vegoil markets.
The 6 to 10 day forecast for the Midwest GFS sees moderate rain fall for western Minnesota with eastern Minnesota dry along with Iowa. The European model has light rainfall for the two state. Both models show rainfall in most areas west of the Mississippi River. Temps are seen below average for the rest of this week then, warming to above average by the weekend into the first half of next week. The 11 to 16 day forecast for the Midwest has models in agreement with average to a bit below average rainfall and average to a bit above average temps but, nothing extreme.
US and China will hold new trade talks on August 15. There is talk POTUS wants to end the deal. China remain well behind the pace to satisfy Phase 1 of the trade deal. US soybean prices remain competitive to China through December. Brazil exported 10 mmt soybean in July. Their market year total is 69 mmt or 141 pct of last year. 71 pc of Brazil exports have gone to China. Index funds and Managed funds may be too long soybean going into US harvest.
US corn export prices are competitive to buyers. There is little time left for weather to impact US corn crop negatively. US farmer has a record amount of corn to sell. Managed funds sold 32,000 corn contracts yesterday. Open Interest increased 24,000. Weekly ethanol production should be near last week. Production remains below pre virus levels. Corn seasonal suggest corn tends to bottom in late September.
US HRW export prices are $10 per tonne above Russia prices. Wheat tens to make bottom in September.
Some feel key support is near 4.75-5.00 Chicago and 4.00-4.10 KC. Russia winter wheat harvest yields continue to improve. Most feel France crop will be lower than current estimates. Argentina needs a rain.
On Tuesday, Managed funds were net sellers of 10,000 contracts of SRW Wheat; net sold 32,000 Corn; sold 12,000 Soybeans; net sold 3,000 lots of soymeal, and; sold 1,000 Soyoil. We estimate Managed Money net short 10,000 contracts of SRW Wheat; short 183,000 Corn; net long 58,000 Soybeans; net short 23,000 lots of Soymeal, and; long 53,000 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.