Grain Futures Higher

Grains are higher. SU is up 3 cents and near 8.75. CU is up 1 cent and near 3.29. WU is up 5 cents and near 5.29. US stocks are higher. US Dollar is lower. Crude is lower. Gold is lower.

Not much of a turnaround in grain futures. USDA did drop US 2020 corn and soybean crop ratings more than expected but better US 2 week weather could stabilize crops and could even improve them. Many feel the fact USDA did not drop World 2020/21 demand on their July estimates suggest World end stocks could increase due to drop in demand due to the virus.

Last evening’s GFS model run was notably wetter in the Dakotas and southwestern Minnesota July 21 – 23. The flow aloft will support weather disturbances and complexes of thunderstorms with heavy rain to impact this area. Another notable rainfall change in last evening’s GFS model run was the increase in the SW Corn Belt, in areas such as Missouri, central and southern Illinois, southern Indiana, western Kentucky, southern Iowa, and eastern Kansas, July 23 – 25.

The 6 to 10 day and the 11 to 16 day Midwest weather models are back to conflicting; the GFS is wetter for the Midwest with the European sees less rains and favoring the northern Midwest over the 10 day period. The outlook to the 16 day models has the GFS producing average to a bit below average rains and average temps while, the European sides with ridging.

Yesterday’s U.S. weekly export inspections had Wheat exports running up 1% versus a year ago (11% behind last week) with the USDA currently forecasting a 2% decrease on the year, Corn 19% behind a year ago (19% last week) with the USDA down 14% for the season and Soybeans are down 2% on the year (down 1% last week) with the USDA having a 6% decrease forecasted on the year

White House Economic Adviser Larry Kudlow said that President Donald Trump is not in a good mood about China because of the coronavirus pandemic, new Hong Kong security laws and the treatment of the Uighurs, but the country is still part of the first phase of its massive trade deal with China.

China’s monthly imports of soybeans leapt to a record high in June, jumping 71% from a year earlier, customs data showed, as a flurry of cargoes arrived from top supplier Brazil. China, the world’s top importer of the oilseed, shipped in 11.16 million tons in June from 6.51 million a year ago and up 19% from 9.38 million tons in May.

USDA estimated US corn crop 69 pct good/ex versus 71 last week. Drops were in IN, MI, NE and OH. 15 pct of the crop has below trend yield outlook, 34 pct near trend and 42 pct above trend. Best crops are still in the west. One crop scout dropped his US corn yield to 177 vs USDA 178.5. US farmer remains a reluctant seller of new crop. This could support the basis but not futures.

USDA estimated US soybean crop 68 pct good/ex versus 70 last week. Drops were in AR, IL, IN, NE and OH. 12 pct of the crop has below trend yield outlook, 38 pct near trend and 45 pct above trend. Best crops are still in the west. One crop scout dropped his US soybean yield to 50 vs USDA 50.Soybean prices up to China buying. World vegoil prices are on the rise due to tight supplies. Still some are concern about lower demand due to the virus.

USDA estimated US winter wheat harvest near 69 pct. USDA rated the US spring wheat crop 68 pct good/ex. World wheat prices still on rise due to talk of lower Europe and Russia crop size. Still trade demand could be declining due to spread of virus and impact virus has on global economic recovery.

On Monday, Managed funds were net sellers of 7,000 contracts of SRW Wheat; net sold 32,000 Corn; sold 12,000 Soybeans; net sold 8,000 lots of soymeal, and; sold 2,000 Soyoil. We estimate Managed Money net short 10,000 contracts of SRW Wheat; short 183,000 Corn; net long 78,000 Soybeans; net short 31,000 lots of Soymeal, and; long 10,000 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.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now