Written Commentary
MORNING AG OUTLOOK
Mixed trade across the Ag space this AM while fresh news is limited. Wall Street attempts to recover from yesterday plunged driven by fears that a Democratic Congress will lead to more regulation and a slowdown in AI buildout across the country. Pres. Trump took to social media to remind voters he is 100% in favor of AI build-out and will work with any state that wants to help support the technology’s growth. US jobs report later this AM is expected to show payrolls grew 60k in Oct-26, up from 29k in Sept-26 while the unemployment rate is expected to hold at 4.2%. Ag. markets will shift their attention to next Tues. USDA production and WASDE updates. The Reuters poll indicates analysts expect higher US soybean production and stocks while lower corn production and slightly lower stocks. Energy prices are mixed in 2-sided trade. Spot WTI crude oil is up $.30 per barrel at $90.80. Spot RBOB is down $.01 per gallon while HO is up $.02. Light rain in the S. Plains along with the Great Lakes region in the past 24 hours, otherwise dry across the Midwest. Dry conditions across the nation’s midsection over the next week should enable harvest to wrap up in a timely manner. Dry for much of Argentina and far S. Brazil over the next week. Scattered rains for the rest of Brazil. Above normal temperatures for much of Argentina and WC Brazil. The US $$ is sharply higher trading to new highs for the week. US equity markets range from down 1% for the DJIA while up 1% in the Nasdaq.
Corn:
Dec-26 is up $.00 ½ at $4.40 ½ holding just above this week’s low. Speculative traders sold 12k contracts yesterday, reducing their long position to 51k. Open interest was up just over 18k contracts. The Ave. production est. in the Reuters poll at 15.962 bil. bu. is down 72 mil. bu. from the USDA est. in Oct-26. Ending stocks are expected to fall only 9 mil. bu. to 1.840 bil. I expect production to increase to 16.055 bil., with ending stocks growing to 1.870 bil. Export sales are still off 34% YOY vs. the USDA forecast of down 4%. China’s Commerce Minister suggested additional purchases of US Ag. goods hinges on both sides implementing a $60 bil. reciprocal tariff-cut agreement. The 2 sides are expected to meet to discuss tariff cuts before the end of the year. The BAGE reports corn plantings in Argentina have reached 51%, well above their historical average.
Soybeans:
Jan-27 beans are $.02 higher at $11.90 in 2-sided trade. Jan-27 beans have closed lower for 9 consecutive sessions with next support is at the Aug-26 low at $11.80 ¾. Dec-26 meal is up $3.00 at $320.20 while Dec-26 oil is down another 34 points at 61.90 after holding support near a 50% retracement. Yesterday’s net selling across the complex took the combined MM long position down to 342k, well below the recent record of 558k. Speculative traders continue to shed length as SA forecasts remain non-threatening. Crush margins (Jan/Jan) are steady at $1.96 bu. with bean oil PV slipping to 49%. The Ave. production est. in the Reuters poll at 4.597 bil. bu. is up 35 mil. bu. from the USDA forecast in Oct-26. Ending stocks are expected to rise 16 mil. bu. to 331 mil. I expect production to increase to 4.592 bil., with stocks at 335 mil. Bean exports are up 76% from YA vs. the USDA forecast of up 12%. I’d estimate Chinese purchases at 19-19.5 mmt. I look for the USDA to raise exports another 10 mil. bu. The BAGE reports soybean plantings in Argentina at 5%.
Wheat:
Prices are down $.07-$.11. CGO Dec-26 is down $.11 at $5.88 ¼, Dec-26 KC is $.10 ½ lower at $6.25 while Dec-26 MIAX is off $.07 at $6.13. New 8-9 month lows for CGO and KC while a new contract low for MIAX. Prices are being pressured by Pres. Trump announcing he expects next week’s peace talks between US, Russia, Ukraine and the EU will produce a cease-fire. I see US wheat ending stocks hold steady at 740 mil. bu. in next week’s WASDE report while the Ave. Reuters est. shows stocks rising 6 mil. to 746 mil. After cutting their export forecast 25 mil. bu. last month, I see the USDA holding steady this month at 750 mil. US winter wheat areas in drought fell 2% to 48% while spring wheat areas in drought fell 4% to 34%.
Interested in more futures markets? Explore our Market Dashboards here.
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.
