Grain Markets Starting Higher

by Steve Freed,

Grains are higher. SN is up 2 cents and near 8.39. CN is up 1 cent and near 3.18. WN is up 3 cents and near 5.06. US stocks are higher. Crude is higher. US Dollar is lower. Increase tension between POTUS and China could add uncertainty to China buying US Ag goods. This weeks Fed Chairman remarks could also add uncertainty to slow recovery of US economy. This weeks USDA report was negative corn and wheat.

For the week, SRW Wheat prices are down roughly 16 cents; HRW down 25; HRS down 6; Corn is down 1 cent; Soybeans down 1; Soymeal down $2.00, and; Soyoil down 20 points.
Chinese Ag futures (Sep) settled down 98 yuan, down 9 yuan in Corn, unchanged in Soymeal, up 44 in Soyoil, and up 74 in Palm Oil. Malaysian palm oil prices were up 58 ringgit at 2,089 (basis July) with Malaysia cutting their export duty for June to zero.

China appears to be interested in making good on its obligations regarding US agricultural purchases under the Phase One trade agreement; however, one significant factor standing in the way of even bigger US soybeans purchases is the steady weakening seen in the Brazilian real. Since the start of the year, the currency’s index has sunk over 32%, to where its trading today at roughly 17 cents per one real; the weakened Brazilian currency is tough to beat.

For the week ended May 7th, U.S. All Wheat sales are running 3% ahead of a year ago, shipments up 3% with the USDA forecasting a 4% increase on the year. U.S. Corn sales are running 18% behind a year ago, shipments 31% behind with the USDA forecasting a 14% decline. U.S. Soybean sales are running 11% behind a year ago, shipments 4% ahead with the USDA forecasting a 4% decline on the year

Private analytics firm IEG Vantage on Thursday projected U.S. 2020 corn plantings at 94.160 million acres; the figure is below the U.S. Department of Agriculture’s official corn plantings forecast of 97.0 million acres. The firm projected U.S. 2020 soybean plantings at 85.890 million acres, above the USDA’s forecast of 83.5 million

Wire story reports United States soybean supplies surged above 900 million bushels in 2018 when China shunned U.S. beans at the start of the trade war, setting a new high for domestic soybean stocks. Prior to that, discussion of volumes over 600 million bushels was extremely rare. But now, U.S. soybean supply projections for August 2021 are on par with pre-trade war levels and corn stocks have become the eye-popping figure. At 3.318 billion bushels, the U.S. government’s prediction for 2020-21 U.S. corn carryout is by far the highest number printed by the agency in any month in more than three decades
On Thursday, Managed funds were even SRW Wheat, sold 8,000 corn, net sold 1,000 soybeans, sold 2,000 soymeal and net bought 2,000 soyoil. We estimate Managed funds are net short 12,000SRW Wheat; net short 191,000 Corn; net long 14,000 in Soybeans; net short 14,000 lots of Soymeal, and; net short 8,000 Soyoil.

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.

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.

© 2024 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.