Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
MORNING OUTLOOK
Grains are lower. SU is down 16 cents and near 12.91 SX is down 19 cents and near 12.80. SMU is near 353.4. BOU is near 59.33. CN is near 6.58. CU is down 10 cents and near 5.40. CZ is down 10 cents and near 5.25. WU is down 7 cents and near 6.56. KWU is down 4 cents and near 6.16. MWU is down 1 cent and near 8.01. US stocks are higher. US Dollar is mixed. Crude is higher. Gold is higher.
Rains in E NE, SW IA and moving into MO and IL today. NW and N plains hot/dry next week. Some feel US HRS weather like 1988 when farmers harvest only 75 pct ND acres and yield was 15.
Many position traders are unwilling to take new positions into USDSA report. Funds short corn. Commercial exporter appears to be large corn short. Corn and soybean crushers covered into Aug.
Based on USDA data, 41 pct of US Midwest soils are in drought. Record corn yield remains in doubt.
China Dalian corn, soybean, soymeal, palmoil prices were lower. Hog margins lowest in 7 years. Lower soybean futures and higher real limits Brazil farmer selling. No corn at port to load corn vessels. Matif rapeseed futures trade 10 day high. Canada canola futures limit up. Expanding limits today.
Weekly US corn export sales est near 300-900 mt, soybean 200-800 mt and wheat 200-525. US fob soybean prices near $536 vs Argentina $507. Argentina soymeal $386 vs US $401. US fob corn prices near $291 vs Ukraine $285, Argentina $230. US HRW fob wheat $283 vs Russia $252.
Most est US June 1 soybean stocks near 763 mil bu vs 1,381 ly. US soybean acres near 88.5 vs 83.1 ly. Most est US June 1 corn stocks near 4,014 mil bu vs 5,003 ly. US corn acres near 93.6 vs 90.8 ly. Most est US June 1 wheat stocks near 841 mil bu vs 1,028 ly. US all wheat acres near 46.2 vs 44.3 LY.
Baltic and Russia new crop wheat export prices remain a discount to US. Rains in SW EU too much?
On Wednesday, Managed funds were net buyers of 6,000 SRW Wheat; sold 5,000corn; 3,000 soybeans; 5,000 soymeal and bought 6,000 soyoil. We estimate Managed funds to be net short 7,000 SRW wheat; long 237,000 corn, 102,000 soybeans, long 12,000 soymeal and long 78,000 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.
