September 21 | Follow us on Twitter @TradeADMIS | Download PDF
November soybeans settled at 847 ¼ down 3 cents on the day leaving the market up 16 ¾ cents on the week and put in a bullish outside week higher close. December soybean meal settled at $308.90 down $5.50 on the day which left the market up just .20 cents on the week. December soybean oil settled at 28.34 up .48 points on the day which left the market up .58 points on the week. December soybean oil also put in a weekly key reversal from a contract low. Oil-share settled up 2.47% on the day. December crush settled at $1.44 down .10 cents on the week. US exporters announced the sale of 100,000 tonnes of soybean meal this morning. Vegetable oils are cheap in general and at the lowest level since the 08/09 recession. Vegetable oils are also cheap compared with crude oil so active bio-fuel production is ongoing in the US, Indonesia and Argentina. The last COT report showed managed money traders held record high net short position in soybean oil and open interest for soybean oil is also at a record of 606,063 contracts. March soybean oil experienced a key reversal from contract lows on Wednesday which is a strong technical signal of low. A close above 28.35 today would represent a key weekly reversal which would help confirm a major low is in place. Agrural has estimated Brazil’s soybean planted area at 35.8 million hectares up 2.0% from last year. Brazil’s state of Parana soybean plantings are seen at 11.2% complete as of September 20th. Agrural sees the 2018-19 soybean production at 120.3 million tonnes compared to the 2017-18 production at 119.5 million tonnes. The open interest in soybeans went down 8,210 contracts on Thursday with fund short covering, soybean meal went down 1,839 contracts and soybean oil went down 252 contracts.
December corn settled at 357 ¼ up 4 ¾ cents on the day which left the market up 5 ½ cents on the week. The market put in a contract low at 342 ½ this week and by closing higher on the week has put in a weekly key reversal. US exporters announced the sale of 121,700 tonnes of corn to Unknown destinations this morning. Support yesterday was seen from solid export sales coming in at 1,393,400 tonnes. As of September 13, cumulative corn sales stand at 27.2% of the USDA forecast versus a 5 year average of 25.1%. December corn made a low this week at 342 ½ yet two days later had the largest rally since early July. December corn has bottomed with harvest lows in September only twice since 1990. In 1998, the market rallied 17% from a fall low to a high made in October. In 2009, the market rallied 36% from a fall low to a high also made in October. A 17% rally this year would take December corn back to 403 while a 36% rally would take the market up to 466. The managed money traders net short position was 63,470 contracts as of September 11th and with open interest up over 63,000 contracts since September 11th their net short could be as large as 85,000 contracts in today’s COT report. China sold 3.77 million tonnes of corn out of 7.94 million offered at government auctions this week. So far since April 12 there has been 83.0 million tonnes of state reserves sold at auction. The open interest in corn went down 3,144 contracts on Thursday.
Chicago December wheat settled at 521 ¾ down 2 ¼ cents on the day which left the market up 10 ¼ cents on the week. Kansas City December wheat settled at 525 ¼ down 1 ¾ cents on the day which left the market up 9 cents on the week. Matif December futures settled down 0.37% on the day but up over 2.0% on the week. The trade will continue to focus on Australian production issues and Russian export potential into the coming week. Russian consultancy IKAR lowered their Russian wheat production to 69.2 million tonnes from 69.4 million previously. The reduction came from lower harvested acreage. They left their export estimate unchanged at 32.5 million tonnes. SovEcon cut their Russian 2018-19 wheat export total to 33.0 million tonnes from 33.9 million previously. At a conference in Moscow meat producers voiced their concern of the fast pace of exports so far this season and fear it could disrupt supply for domestic consumers. They would like to see regulators control supplies for the domestic market but are not calling for an export ban. Moscow based consultancy ProZerno estimates the 2018-19 Russian wheat exports at 36.0 million tonnes, down from 37.0 million previously and compared to the USDA estimate of 35.0 million. They estimate the 2018-19 production at 70.0-71.0 million tonnes. The open interest in Chicago went down 421 contracts on Thursday with Kansas City up 366 contracts.
Sept 21 | Download PDF
S&P 500 and Dow Jones Futures at Record Highs
STOCK INDEX FUTURES S&P 500 and Dow Jones futures advanced to new historical highs in the overnight trade on basically no news.
The 8:45 central time September Composite PMI is expected to be 55.1.
Many analysts are at a loss to explain why U.S. stock index futures have been so strong in spite of the ongoing trade wars.
Despite of a variety of ongoing geopolitical issues, the still relatively low interest rate environment is dominating and remains long term supportive to U.S. stock index futures. CURRENCY FUTURES The U.S. dollar index is firmer today after falling to a 14 week low yesterday.
Recent selling pressure in the greenback in spite of the ongoing trade tensions between the U.S. and China should be viewed as a sign of longer term weakness for the U.S dollar.
The euro currency is lower after it was reported that the euro zone September Composite PMI Flash was 54.2, which compares to the forecast of 54.4.
Japan's core inflation increased at a slightly faster pace in August, as expected. Core consumer prices rose 0.9% from a year earlier in August, which compares to the 0.8% advance in July.
The Canadian dollar is higher after it was reported that Canadian retail sales increased in July following a decline in the previous month. Statistics Canada said retail sales were up 0.3% in July, which matched market expectations. INTEREST RATE MARKET FUTURES
According to financial futures markets, the probability of a fed funds rate increase at the Federal Open Market Committee’s September 26 meeting is close to 100%, and the probability of another fed funds rate hike in December is 90%.
Some of the recent pressure on the bond futures market can partially be attributed to the increasing size of bond auctions from the Treasury.
The long term trend for futures is lower as the U.S. economy remains strong and the FOMC will likely continue on its tightening path.
This special monthly report recaps the financial, energy, metal, currency, grain and livestock market trends exclusively by the ADMIS Research Team. September Edition August Edition
USDA SUPPLY/DEMAND REPORT (released Sep 12) Download PDF
US AUGUST EMPLOYMENT DATA (released Sept 7) Download PDF
US Q2 GDP (released Aug 29) Download PDF
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