March 23 | Follow us @TradeADMIS
Soybeans and soyoil closed lower. Soymeal, corn and wheat closed higher. Markets were choppy following US sanctions against China imported good and China small retaliation of US goods. There is some concern that more China retaliation may still be coming.
Soybeans and soymeal had a wide trading range. Talk of China retaliation against US imposed sanctions on China imports offered resistance. Fact China retaliation was less than feared may have triggered some buying. This week Informa est US 2018 soybean acres near 91.5 million vs 90.1 last year. Informa est US 2018 soybean yield near 49.5 vs 49.1 ly. This would suggest a crop near 4,490 mil bu vs 4,392 ly. Informa also est 2018 World soybean crop near 360.4 mmt vs 336.4 this year. Informa is looking for a rebound in the Argentina crop. Oil World est World 2017/18 Soybean crush near a record 294.0 mmt vs 286.3 ly. China is the number 1 crusher at 91.5 mmt vs 85.1 last year. Argentina is est near 38.5 vs 43.4 ly. Some feel drop in Argentina crop could increase both US and China crush. China may need to increase soymeal exports to SE Asia customers due to the lower Argentina crop. Weekly US soybean export sales were near 28 mil bu. Total commit is near 1,838 vs 1,984 ly. USDA goal is 2,065 vs 2,174 ly. US monthly soybean exports expected to drop seasonal due to competition from Brazil.
Corn futures managed to close a little higher. Concern about lower US trade due to trade wars with either China or Mexico may have offered resistance. Some late buying may be due to fact China reaction was not as bad as feared and POTUS signed a spending bill that will keep US government open for now. Weekly US corn export sales were near 58 mil bu. Total commit is near 1,775 mil bu vs 1,839 ly. USDA goal is 2,225 vs 2,293 ly. Some could see final exports slightly higher than USDA est. Still record March 1 corn stocks should limit the upside in prices until more is known about US 2018 supply. Most recent weather maps suggest above normal rains in the US Delta. This and colder than normal US Midwest soil temps could slow early US corn planting. Informa this week est US 2018 corn acres near 88.9 vs 90.2 ly. They est US 2018 corn yield near 174.5 vs last eyars record 176.6. This would produce a crop of 14,232 mil bu vs 14,604 ly. Informa aslo est World 2018 corn crop near 1,046 mmt vs 1,032 this past year. Higher Brazil, FSU and Argentina crop should offset the lower US crop. Seasonally US corn exports tend to peak in March. This year lower South America crops could help US corn exports.
Wheat futures closed higher. Large global wheat stocks continues to offer resistance to prices. Weather maps that suggest parts of the US HRW growing areas could miss additional rains may have offered support. Fact China retaliation to US import sanctions were not as bad as feared may have offered support. WH may have found support near 4.50. Resistance is near 4.70. Weekly US wheat export sales were near 10 mil bu. Total commit is near 825 vs 947 ly. USDA goal is 925 vs 1,055 ly. Seasonal wheat monthly exports tend to increase from March into May. Key will be competition from Russia. This week, Informa est US 2018 wheat acres near 46.1 mil vs 46.0 ly. Informa est US 2018 wheat yield near 46.6 vs 46.3 ly. Informa est US 2018 wheat crop near 1,785 mil bu vs 1,741 this past year. Informa also est World 2018 wheat crop near 746 mmt vs 759 this past year. Increase in US and Australia cannot offset drop in FSU.
Mar 23 Download Report
STOCK INDEX FUTURES
Only a few hours after President Donald Trump yesterday ordered tariffs on $50 billion of Chinese imports due to alleged intellectual property abuses, China responded with levies of $3 billion of U.S. imports of pork, recycled aluminum, steel pipes, fruit and wine.
Stock index futures continued to decline in the overnight trade, but more recently recovered and traded higher.
Orders for durable goods, which are products designed to last at least three years, increased 3.1% in February from the prior month. This was the largest gain in orders since June 2017. Economists had expected a 1.5% increase.
The 9:00 central time February new home sales report is expected to show 620,000.
Today’s global trade issues are obviously a major concern, but so were the European debt crisis, Brexit and a multitude of others, which at the time were described by some analysts as “market topping insurmountable problems.” Current trade issues will only temporality pressure futures. CURRENCY FUTURES
The U.S. dollar index is lower on ideas that increased trade tensions could influence the Federal Open Market Committee to tone down its hawkish rhetoric, although a total of three rate hikes still appear likely this year.
The euro currency is higher and longer term the currency of the euro zone should be supported by the belief that the European Central Bank could hike interest rates in the first quarter of next year.
I continue to anticipate the double top resistance at the 1.26500 - 1.26580 area in the June euro currency to be taken out, although it may take a while.
The threat of a global trade war is causing investors to move funds into the relatively safety of currencies such as the Japanese yen and the Swiss franc.
The Canadian dollar and the Australian dollar are higher due to firming crude oil prices.
However, gains were limited in the Canadian dollar on news that Canadian retail sales increased at a slower pace than expected pace in January. The value of retail sales in January increased .3%, when market expectations were for retail sales to rise 1.1%. INTEREST RATE MARKET FUTURES
Federal Reserve Bank of Atlanta President Raphael Bostic today said the economy is facing upside risks to activity over coming years, which is why he is supportive of moving forward with interest rate increases.
Other Federal Reserve speakers today are Minneapolis Federal Reserve Bank President Neel Kashkari at 9:30 and Dallas Federal Reserve Bank President Robert Kaplan at 10:30.
I have been and still am on board for a total of three rate increases this year.
Longer term the main trend for the entire interest rate futures complex is lower, especially for the 30 year Treasury bonds.
This special monthly report recaps the financial, energy, metal, currency, grain and livestock market trends exclusively by the ADMIS Research Team. March Edition February Edition
US FEB UNEMPLOYMENT (released Mar 9)
USDA CROP REPORT (released Mar 8)
US Q4 GDP (released Feb 28)
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