Ag Market View Sep 14
Soybean futures started lower on continued Managed fund long liquidation. Talk of the potential for increased demand for US soybeans and a lower final US 2021 crop offered support. For the first time since the Hurricane, US is offering soybean at the gulf 50-70 cents below Brazil. US gulf issue may have forced China to buy 8 Brazil cargoes today for Oct. China soybean futures continue to slide lower and soymeal prices are also firming which has pushed China soybean crush margins to positive. There were no new China buying US soybean announced today. They have been buying 2-3 cargoes per day vs 7-8 needed to reach 100 mmt import goal. USDA left US soybean crop rating at 57 pct G/E vs 63 last year. Crops improved in AR, IA, KY, LA, MI, MN, NE, OH, and TN but dropped in IL, MS, SD and WI. 38 pct of the crop is dropping leaves vs 29 average. SX in tight range between 12.63 and 13.03. Some were buyers near 12.90, risking 12.60 with objective 13.30-13.50.
Corn futures traded higher. Combination of talk of lower than expected early US corn harvest yields especially in IL and fact USDA dropped weekly US con rating offered support. There is also talk of a few US Gulf export elevators beginning to unload barges and load vessels may have also supported futures. Managed funds continue to liquidate out of net long positions on chart selling and slow new export sales Pace. Fact USDA raised US 20/21 and 21/22 corn carryout also offers resistance. On Sep 10, CZ had an outside day closing above the previous days higher. For some this could signal a short term low. Open interest continues to drop on lack of new farmer selling, lack of consumer buying and fund long liquidation. CZ bounced off key 200 day moving average support. Some were net buyers of CZ near 5.17 risking 4.99 with an objective of 5.55- 5.60. US 2 week weather outlook is dry and warm and should aid harvest. USDA dropped US corn crop rating from 59 pct G/E to 58. Crops dropped in IL, IN. IA, ND, OH and WI. Crops improved in MI, MN, NE and SD. 4 pct pf the crop is harvest. Some feel like last year, final US corn yield could drop below USDA Sep guess due to lower ear weight from USDA Sep 5 year average. Trade also est that final US corn exports could be closer to 2,700 vs USDA 2,475, US export prices are competitive vs Brazil and Ukraine.
Wheat futures ended higher. WZ and KWZ were back near 7.00. MWZ is back near 9.00. The rally was linked to lower Canada and French supplies and talk that dry weather will reduce Russia wheat exports. Poor quality could also reduce EU Wheat exports. Stats Canada estimated their all wheat crop at 21.7 mmt vs USDA 23.0 and 35.1 last year. Of the total, SRW is 2.7. 2021 est suggest almost half a spring wheat crop from last year. WZ is near 7.11. KWZ is near 7.01. MWZ is near 8.87. WZ held 6.80 support. Initial resistance is near 7.02 then 7.09. USDA estimated that 12 pct of the US 2022 winter wheat crop is planted near 12 pct done vs 8 average. WA is 53, CO 29, NE 17, ID 16, IL 4, KS 4. US south plains forecast is warm and dry. Trade looking for higher price trend into 2022 ti buy US acres and reflect tight old crop exporters supply versus projected demand.
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.