Grains Up as Stock Indexes Higher

MORNING OUTLOOK

Grains are higher.SN is up 8 cents and near 16.01. SX is near 14.64. SMN is near 400.7 and 3 month low. BON is near 82.56.BON is a record 51. Pct of board crush. CN is up 5 cents and near 7.80. CZ is near 7.22. WN is up 17 cents and near 11.11. KWN is up 16 cents and near 11.91. MWN is up 12 cents and near 12.25.

US Stocks are higher. Crude is higher to talk of fewer new China Covid cases. US Dollar is lower. Gold, silver, copper, cotton, coffee, cocoa, and sugar are higher.

Dry US weather should help corn and soybean plantings. 8-14 day maps looks wetter. Rains could slow US HRS plantings. Ongoing dryness could lower US HRW crop outlook. EU, Brazil and Argentina are dry.  India, Pakistan, Bangladesh and Middle east are also dry. Australia is too wet. Putin commitment to long Ukraine war raises questions about Ukraine grain exports. Russia continue to shell Odessa damaging export facilities.

Soybeans are higher. There is talk of China asking for US old and new crop soybean prices. China domestic soymeal stocks are down and below last year. WHO said China covid lockdown policy was not sustainable.  USDA should lower SA soybean crops 5 mmt. Key could be estimate of US 2022/23 soybean exports. Some estimate near 2,750 vs USDA Outlook at 2,150. Soyoil finding support from record high diesel fuel prices. Palmoil slightly higher after Malaysia stocks and production were reported higher with exports lower. Matif rapeseed futures higher on dry EU weather.

Corn futures are higher on Ukraine and Brazil export concerns over US planting weather. Brazil corn crop estimates closer to 105-112 mmt vs USDA 116. Some doubt USDA will drop US corn yield from 181 vs crop watchers 177. USDA has used their outlook corn yield on the May report every year since 2014. Trade will see how USDA handles Ukraine 2022/23 corn exports.

Wheat prices are rebounding led by KC HRW .Dry and warm forecast could eventually drop US final HRW crop. US and Canada spring wheat plantings could be delayed. EU, India, Pakistan, Bangladesh, Argentina, Middle east are all dry. Pakistan, Bangladesh and Iran tendering or wheat. Iraq also will need wheat imports. Will see how USDA handles potential drop in Black Sea wheat exports due to Ukraine war. Major World wheat buyers have little forward coverage. US bakers are also short wheat with light coverage.

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.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now