Written Commentary
SOYBEANS
Following the holiday weekend, the soy complex is starting the week higher due to the better-than-expected demand for beans and bean products last week, and the USTR decision to narrow the scope of the proposed China port fees. US demand has held up well despite the tariffs as China has recently stepped up Brazilian bean purchases, while other countries have looked to the US for supplies. The weakness in the US dollar has been a further positive for the market, and overnight, the dollar index hit its lowest level since March 2022. The dollar weakness is offsetting some tariff bearishness and keeping US prices more competitive than expected.
SOYBEAN MEAL
Following the Easter holiday weekend, the meal market starts the week slightly lower from Thursday afternoon’s close. Tariff negotiations continue with many countries, but there is no indication that China is ready to negotiate on trade just yet, which is keeping sellers active on soy complex rallies.
CORN
The corn market is off to a strong start as trade negotiations with some of the largest buyers of US corn, including Japan, Taiwan, and South Korea, are expected to continue. President Trump touted ‘big progress’ in trade talks with Japan, and that may be the 1st major trade deal announced possibly this week. In addition, the US dollar is again sharply weaker this morning, and significant rain fell across the south-central Midwest, with much more expected over the next week.
WHEAT
The wheat markets are showing minor strength this morning on a sharply weaker US dollar and weekend rain missing most of the western Plains. Beneficial precipitation fell in central Oklahoma, northern Texas, and the eastern half of Kansas. More precipitation is expected this week and will reach some of the drier areas of the HRW belt. However, continued wet weather in the SRW belt is unwelcome, and crop conditions will likely slip in those states, according to this afternoon’s condition report.
CATTLE
Last week’s Cattle on Feed report was mostly neutral, although placements may be slightly bearish. On Feed numbers were lower than last year and showed tight supplies. The slight bearish lean from the USDA and weakness in the stock market this morning may result in a weaker opening. However, the US dollar is also significantly lower, which may be a mitigating factor. June live cattle closed higher every day last week and filled the chart gap seen earlier this month. The strong trend will be tested early this week as short-term conditions reach overbought levels and recession fears are prevalent.
HOGS
June hogs were little changed on Friday, but the reversal higher midweek last week was a bullish signal. Stronger macro markets this morning may result in a higher opening, and if prices can gap up today, the technical outlook will improve significantly. Commitments of Traders data showed Managed Money continued to exit long positions, which now stand at a 7-month low.
MILK CLASS III
May Class III milk finished with a sizable weekly gain after reaching a 7-week high on Friday. The USDA reported that milk production in the East and Central regions continues to increase as spring flush sets in. The West Region is also seeing strong output, but areas of California indicate that they are at the peak of spring flush or just beyond it.
ENERGIES
June Crude Oil lower this morning on reports of progress in talks between the US and Iran but also on continued concerns that a trade war will pull the global economy into recession and lower oil demand. This follows a rally on Friday that came after the US put new sanctions on a Chinese oil refiner they accused of facilitating the shipment of Iranian crude.
June Natural Gas is fell below the 200-day moving average today after managing to hold it for four straight sessions. The weather is not conducive to strong demand, but then again it usually is not at this time of year. This leaves worries about the global economy to direct the market. The tariff negotiations may lead to more commitments on the part of for US trading partners to buy LNG, but this is limited by how quickly the US can expand its export capability.
DOLLAR INDEX
March U.S. dollar index futures fell to a three-year low due to concerns about the economic outlook for the U.S., along with renewed concerns over the Federal Reserve’s independence.
COCOA
July Cocoa gapped higher on Thursday after the first-quarter grind numbers for Asia and Europe came in better than expected, and it is higher again today after the North American grind came in better than expected on Thursday afternoon, after the close. That number was 110,278 metric tons, down 2.45% from the same period a year earlier, as reported by the National Confectioners Association. As reported early Thursday, Europe’s first-quarter cocoa grind came in at 353,522 metric tons, down 3.75% from a year ago. Asia’s grind was 213,898 tons, -3.45%. Going into the reports, traders had been looking for a declines of 5%-7%. The better than expected grind number suggest demand has not been as damaged by high prices as feared.
COFFEE
Coffee prices rallied last week on tight robusta supplies and firm prices in Vietnam. The market has moved back into the February-March consolidation range after a technical breakdown early this month. The Brazilian real and NY coffee both put in spike lows on the day Trump announced the delay in the tariffs. A strong real reduces pressure on Brazilian growers to sell their product for export. The sharply lower dollar this morning could lend additional support to the real and therefore coffee prices.
COTTON
A sharply lower dollar make US look relatively cheaper on the global market, which helps US export prospects. The market put in a spike low after President Trump postponed the implementation of the tariffs for 90 days. The USDA export sales on Thursday showed an improvement over recent weeks, with net sales of 201,990 bales for the 2024/25 (current) marketing year and 65,889 for 2025/26 for a total of 267,879 for the week ending April 10. This was up from 133,966 the previous week and the highest since March 6. Shipments totaled 328,215 bales, down from 377,221 the previous week and the lowest since February 20, but this was still the seventh straight week above 300,000.
SUGAR
July Sugar is up for the third straight session this morning after putting in a 2 1/2 month low last week. The Brazilian real was sharply higher on Thursday, which reduces the impetus for Brazilian producers to sell for export, and the dollar was lower again overnight, which suggests the real could see further gains. Conab raised its forecast for Brazil’s center south cane crop on Thursday, and it left sugar production practically unchanged
PRECIOUS METALS
June gold futures jumped on Monday reaching a record high, driven by strong safe-haven demand in light of escalating global trade tensions and a weakening U.S. dollar. The surge followed President Donald Trump’s directive last week to investigate potential new tariffs on all critical mineral imports.
May silver futures rebounded from losses in the previous session as a weakening U.S. dollar boosted safe-haven demand.
May copper futures advanced on Monday, marking their highest level in more than two weeks, as a weakening U.S. dollar fueled buying interest.
EQUITIES
Stock index futures are lower Monday as investors prepared for another week of developments on President Donald Trump’s tariff policies and for the kickoff of large tech company earnings reports.
INTEREST RATES
Futures are higher at the front end of the yield curve and lower at the long end of the yield curve.
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.
