Ag Market View for Dec 11
Soybeans, soymeal, soyoil, corn and wheat traded higher. US stocks were higher. US Dollar was higher. Crude was lower. Gold was higher. Copper was lower. Cattle were higher. Hogs were lower to end the week.
Managed funds went into this week’s USDA report looking for a reason to be long. All they got was a higher US soybean crush, lower US carryout and lower Argentina crop. USDA failed to raise US soybean export even though shipment and sales are well ahead of average and USDA with plenty of time for additional sales and shipments to push final exports above USDA guess. Some feel a combination of less than ideal South America weather and lower US carryout could push nearby soybean futures above recent highs. Some feel final Brazil soybean crop could be as low as 126 mmt versus USDA 133. Same group could see final US exports closer to 2,375 versus USDA 2,200 and a carryout closer to 30 than USDA 175. March soybean closed near 11.65. Range could be 11.50-11.82. 11.69 is the 30 day moving average. Could be some new buying next week above that level. Rain could fall across parts of Central Brazil but Argentina looks dry.
March corn futures managed to trade higher but with small gains. USDA failed to make any changes to US 2020/21 supply and demand. March corn is near 4.23. 20 day moving average is near 4.25. There could be some new buying above that level next week. Some feel final US corn exports could be from 2,750-2,900. This could drop US carryout closer to 1,465. A carryout that low could push March corn into new highs. Some feel a successful vaccine could increase 2021 food and fuel demand. This could also help increase demand for US corn. Managed funds will need a reason to push prices higher. Some feel that could be the USDA January report if USDA lowers the South America crops, raise US exports and print a headline of lower US carryout. South America corn crops are now estimated to be 375 mil bu below USDA December guess. Some also feel USDA is still to low in their guess of China total corn imports.
Wheat futures traded higher. Talk of Russia imposing a wheat export tax and even making lower export quotas. Rallied prices. Talk of lower US and Russia 2021 wheat crops also offered support. Some could see final Russia wheat crop as low as 72 mmt versus USDA 84. One group estimates US 2021 wheat crop near 1,860 mil bu. Total demand is estimated near 2,100. This would suggest a carryout near 750 versus 850 this year. USDA did lower World wheat stocks due to higher World feed wheat use. March Chicago wheat tested 6.20. Support is 6.00. Resistance is 6.40. Wheat will follow news of global wheat demand and outlook for 2021 Russia and US crops.
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.