Grain Prices Better

MORNING OUTLOOK

Grains are higher. SH is up 9 cents and near 13.79. SMH is near 444.6. BOH is near 42.75. CH is up 6 cents and near 5.28. WH is up 3 cents and near 6.71. KWH is up 4 cents and near 6.41. US stocks are higher. US Dollar is lower. Crude is lower. Gold is higher. There is talk that China may increase buying US Ag goods with new US administration. There will be a new private estimate of US 2021 acres and production today.

Chinese Ag futures (May) settled up 38 yuan in soybeans, up 7 in Corn, down 13 in Soymeal, down 2 in Soyoil, and down 16 in Palm Oil. Malaysian palm oil prices were up 62 ringgit at 3,283 (basis April) as floods raise output concerns.

In Brazil, conditions will still be mostly good for crops. There are a few exceptions including northeastern areas that will continue to be too dry, especially from central Minas Gerais through Bahia. In Argentina, rain is still likely to increase in the nation this weekend and especially Monday and Tuesday of next week. The rain will provide some relief from this week’s heat and dryness; though, there remains a notable difference between the GFS model and yesterday’s midday European Model run. Last evening’s GFS model was similar to the midday GFS of showing significant rain Monday into Tuesday from Cordoba through northeastern Buenos Aires. The European Model was much drier in this area though with some erratic showers that would be mostly unable to counter evaporation and the significant rain mostly limited to the north. Concern for some increase of crop stress remains greatest in southern Argentina.

Soybean futures found support from talk China may be a better buyer of US Ag good under the new US administration, dry Argentina weather forecast and end of speculative long liquidation especially China buyers.

Corn numbers have not changed. US export price is lowest in World. There is talk of Chia buying US PNW corn. There is also talk that Argentina farmer have increased cash sales on talk of new export restrictions. Reduced Black Sea exports could also increase US demand.

Wheat is supported by concern of lower Black Sea wheat exports and new concerns about US spring/summer weather.

One weather forecaster indicates that recent model runs show a notable shift in forecast SST’s into this summer indicating a greater persistence of La Nina into the summer months than previously forecast. This would typically be associated with hotter temperatures in the US Midwest during the summer months.

On Wednesday, Managed funds were net sellers of 3,000 SRW Wheat; sold 9,000 Corn; net sold 10,000 Soybeans; sold 5,000 lots of Soymeal, and; net bought 5,000 Soyoil. We estimate Managed Money net long 18,000 contracts of SRW Wheat; long 380,000 Corn; net long 134,000 Soybeans; net long 74,000 lots of Soymeal, and; long 90,000 Soyoil.

 

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.