Ag Market View for Feb 10
Soybean traded sharply lower. Fact USDA did not drop South America soybean crops and talk of reduced China buying US soybean offset their slight increase in US soybean exports and drop in carryout. Weekly US soybean export sales are estimated near 300-750 mt versus 824 last week. Some feel China may be done buying US old crop soybeans for now. Total commit is near 58.6 mmt versus 32.2 last year. USDA goal is 2,250 mil bu. Most analyst estimate final exports near 2,325. 75 additional total soybean demand could eventually drop US carryout to closer to 45. Could be 50-300 mt new crop sales versus 633 last week. SK traded below 20 day moving average. Next support is near the 50 day near 13.00. SMK trade below last week’s low. Next support is near the 50 day near 417. Funds were net sellers of 30,000 soybeans, 14,000 soymeal and 8,000 soyoil.
Corn futures traded sharply lower. Fact USDA failed to drop South America crops and only increased US exports 50 mil bu and dropped US carryout only 50 mil bu triggered long liquidation. USDA did increase China corn imports but at the same time increased China corn end stocks. This week, UN FAO estimated China corn end stocks at 139 mmt. Weekly US ethanol production was slightly above last week but still below last year. Stocks were below last week and last year. Margins remain negative. Some estimate US 2020/21 corn ethanol demand near 5,050 – 5.075 versus USDA 4,950. Weekly US corn export sales are estimated near 800-1,400 mt versus 7,440 last week. Some feel China may be done buying US corn for now. Total commit is near 56.1 mmt versus 22.8 last year. USDA goal is 2,600 mil bu. Most analyst estimate final exports near 2,800. 400 additional total corn demand could eventually drop US carryout to closer to 1,100. CK traded below 20 day moving average. Next support is near 5.20 then 5.00. Funds were net sellers of 55,000 corn contracts.
Wheat futures traded sharply lower. Lack of USDA corn, soybean and wheat bullish news in their Feb report triggered increase long liquidation. Fact USDA failed to reduce Russia wheat exports and recent Russia farmer and exporter selling wheat left wheat futures on shaky ground. Weekly US wheat sales are estimated near 200-450 mt versus 643 last week. Total commit is near 22.4 mmt versus 21.2 last year. USDA goal is 985 mil bu. USDA estimates World wheat trade near 194.8 mmt versus 190.4 last year. Russia 39.0 vs 34.5, EU 27.0 vs 38.4 ly, Canada 26.5 vs 24.6, Austrália 20.0 vs 9.1 and Argentina 11.5 vs 13.5. China imports were raised to 10.0 vs 5.4 ly. WK traded below last weeks low and tested the 50 day moving average near 6.30. WK has not traded below the 50 day since Dec.
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.