Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
Morning Outlook
No overnight trade. Grain calls are mixed. SF is near 11.84. SMF is near 395.9. BOF is near 37.86. CH21 is near 4.27. WH21 is near 5.96. KWH21 is near 5.50. Wed wheat futures selloff may be overdone. CBOT grains close early today at 12:05. Palmoil futures higher after India lowered import tax. Managed funds may want to add to longs due to drier than normal South America weather.
Central Brazil and south half of Argentina will be dry over next 10 days. Key could be todays USDA export sales report. We will see if last week China was a seller or a buyer. Trade looks for sales to be near 700-1.400 mt vs 1,387 last week. Some estimate China soybean imports near a record 102 mmt versus 95 last year. Brazil 58 versus 70 last year. US 38 mmt versus 16 last year. Argentina soybean crop estimate near 46.5 mmt versus USDA 51. Export sales only 4 mmt vs 8.6 ly.
A drier than normal central Brazil and Ukraine weather forecast should be positive to corn prices. Key could be todays USDA export sales report. Trade looks for sales near 800-1,400 mt vs 1,088 last week. Some est World corn trade near 138 mmt versus 120 last year. US 71 (2,795 mil bu) vs USDA 67 and 45 last year. Brazil 33 versus USDA 39 and 34 last year. Argentina 34 versus 40 last year. Argentamin corn plantings on hold near 31 pct. Crop rated 34 pct good/ex vs 53 ly. Ukraine 22 versus 29 last year. IGC lowered World corn crop 10 mmt to 1,146 vs USDA 1,444.
EU lowered wheat crop to 123 mt vs USDA 126. Argentina lowered wheat exports to 10 mmt vs USDA 12.5. CME Black Sea futures near 5 week highs. Australia futures near 11 week lows. Trade looks for weekly export sales near 200-400 mt vs 192 last week.
On Wednesday, Managed funds were sellers of 14,000 contracts of SRW Wheat, sold 17,000 Corn; sold 6,000 Soybeans, sold 2,000 soymeal and bought 2,000 lots of soyoil. We estimate the funds are net long 18,000 wheat, 267,000 corn, 224,000 soybeans, 78,000 soymeal and 111,000 soyoil. CFTC report is delayed until Monday due to the holiday.
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.
