Liquidation Before USDA Report?
Grains are mixed. SF is up 2 cents and near 11.03. SMZ is near 383.7. BOZ is near 35.35. CZ is down 4 cents and near 4.02. WZ is down 4 cents and near 5.97. KWZ is down 4 cents and near 5.50. US stocks are higher. US Dollar is mixed. Crude is higher. Gold is higher.
For the week, SRW Wheat prices were up roughly 4 cents; HRW up 14; HRS up 5; Corn was up 8 cents; Soybeans up 45; Soymeal up $9.00, and; Soyoil up 175 points. Crushing margins were down 7 cents at $1.22; Oil share was unchanged at 31%.
Chinese Ag futures (January) settled down 23 yuan in soybeans, down 32 in Corn, down 51 in Soymeal, up 4 in Soyoil, and down 38 in Palm Oil. Malaysian palm oil prices were up 46 ringgit at 3,227 (basis January) on ideas of lower stocks, awaits tomorrow’s trade data for October.
Corn and wheat prices may be down due to long liquidation before Tuesday USDA report. Grain markets also looking for new China buying. US election should be behind the market but there could be legal challenges to certain final state votes. Now focus could be Covid vaccine and impact increase cases has on US/World economy. Under the new US President will China increase buying US corn, soybeans and ethanol? Neither China or Russia have yet to congratulate the new US President elect.
The next ten days of rain will be of critical importance for South America grain and oilseeds. Confidence is high that all of these areas will get rain sufficient to maintain crop development except in far southern Brazil and eastern Argentina. Very little precipitation will occur in the Great Plains from the Dakotas through eastern Colorado and western Kansas to western Texas. These areas will not be totally dry, but the light precipitation expected will be brief having little impact on winter crop conditions or establishment. These areas will continue drier biased through Nov. 20 and perhaps into the week of Nov. 22. US Midwest 2 week forecast is warm and dry.
USDA will revise US/World supply and demand on Tuesday. Average trade guess for US 2020 corn crop is 14,659 mil bu versus USDA Oct 14,722. One est is near 14,502. Average trade guess for US 2020/21 corn carryout is 2,033 mil bu versus USDA Oct 2,167. One est is near 1,701. What if USDA does not drop US carryout below 2,000?
Average trade guess for US 2020 soybean crop is 4,251 mil bu versus USDA Oct 4,268. One est is near 4,183. Average trade guess for US 2020/21 soybean carryout is 235 mil bu versus USDA Oct 290. One est is near 78. What if USDA does not drop US carryout below 200?
Average trade guess for US 2020/21 wheat carryout is 881 mil bu versus USDA Oct 883. What if USDA does not drop World/Black Sea wheat crop estimates?
On Friday, Managed funds were net sellers of 5,000 contracts of SRW Wheat; sold 10,000 Corn; sold 2,000 Soybeans; sold 3,000 Soymeal, and; were net even in Soyoil. We estimate Managed Money net long 44,000 contracts of SRW Wheat; long 301,000 Corn; net long 238,000 Soybeans; net long 90,000 lots of Soymeal, and; long 99,000 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.
© 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.