Grains Lower to Unch to Start

Grains are lower. SU is down 6 cents and near 8.79. SX is down 7 cents and near 8.83. CU is down 4 cents and near 3.33. CZ is down 5 cents and near 3.39. WU is unchanged and near 5.34. US stocks are higher. US Dollar is lower. Crude is lower. Gold is higher.

Chinese Ag futures (Sep) settled down 17 yuan, up 10 in Corn, up 15 in Soymeal, down 8 in Soyoil, and down 78 in Palm Oil. Malaysian palm oil prices were up 32 ringgit at 2,444 (basis September) on spec buying interest.

The 6 to 10 day US Midwest forecast has difference in the models with the GFS being wetter than the European model. The GFS has light to moderate rainfall for most sections of the Midwest while the European model favors northern sections of the Midwest with precip. Temps look to run above average. The 11 to 16 day Midwest forecast sees close to average rainfall and slightly above average temps. The Delta looks to see mainly dry weather in the 6 to 10 day outlook.

CU has given back most of the June 30 gains. CU is near the 50 day moving average with support now near 3.20. USDA estimate of US 2020/21 corn carryout is near 2,648 mil bu. Some feel final carryout could be closer to 3,400. This could drop CZ below 3.00. Weekly US corn crop ratings are expected to drop 2-4 pct.

SU is back near 20 day moving average with support near 8.66. Resistance near 9.00. Lack of new China buying US soybeans offered resistance.  Some doubt soybean futures can rally over 9.00 and still look for SX to trade eventually below 8.00. USDA estimate of US 2020/21 soybean carryout is near 425 mil bu. Some feel final carryout could be closer to 565. This could drop SX below 8.00.

Chicago SRW is supported by USDA estimate of 202/21 stocks to use ratio lower than expected. SRW cash values also firmed in areas where harvest was done. Global supplies are adequate but talk of lower Europe and Russia crops offered support. Matif is near 6 week highs. Some feel WZ could trade over 5.50 and KWU has support near 4.40.

On USDA Friday, Managed funds were net buyers of 8,000 contracts of SRW Wheat; net sold 35,000 Corn; sold 9,000 Soybeans; net sold 4,000 lots of soymeal, and; sold 1,000 Soyoil. We estimate Managed Money net short 3,000 contracts of SRW Wheat; short 151,000 Corn; net long 90,000 Soybeans; net short 23,000 lots of Soymeal, and; long 12,000 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.