Risk Off. Grains Sharply Lower
Grains are lower. Risk off. SH is down 29 cents and near 13.40. SMH is near 429.8. BOH is near 42.81. CH is down 9 cents and near 5.15. WH is down 15 cents and near 6.45. KWH is down 10 cents and near 6.24. There is talk of additional selling from Asia. China reported new case of African swine fever in 3 months. US stocks are lower. US Dollar is higher. Crude is lower. Gold is lower. Concern increased over an EU recession and an impact global virus lockdown could have on economic recovery.
For the week, SRW Wheat prices are down roughly 25 cents; HRW down 11; HRS down 16; Corn is down 14 cents; Soybeans down 69 cents; Soymeal down $32.00, and; Soyoil up 115 points. Crushing margins are down $0.12 at $0.74 (March); Oil share up 2% at 33%. Yesterday one private group showed large increase in US 2021 corn and soybean planted acres and crop sizes.
Chinese Ag futures (May) settled up 16 yuan in soybeans, down 29 in Corn, down 35 in Soymeal, up 10 in Soyoil, and down 32 in Palm Oil. Malaysian palm oil prices were down 5 ringgit at 3,279 (basis April) back to weaker export ideas.
SH is trading below initial 20 day moving ave support near 13.47. Tech picture has turned negative. Argentina raised their soybean crop rating. CH is resting this weeks low. Support near 5.10. Argentina increased corn crop ratings. Brazil 2nd corn crop plantings are delayed. Dryness in north and wet conditions in central areas. WH is also testing 20 day moving average support. Russia export prices are offered lower to try to maximize exports before Feb 15 export tax takes effect.
In Brazil, conditions will continue to be mostly good for crops with a few exceptions. The northeast will continue to be too dry through next Thursday. In Argentina, a difference remains between the most recent GFS model run and European Model run with rainfall from the Monday and Tuesday event in eastern Cordoba through southern Entre Rios and northeastern Buenos Aires. Last evening’s GFS model showed significant rain in this area and the European Model continued to show shower activity that would be unable to counter evaporation.
Weekly US corn export sales are est near 600-1,200 mt versus 1,437 last week, soybeans 750-1,500 mt versus 908 last week, soymeal 100-400 mt versus 337 last week and wheat 250-600 mt versus 222 last week. Trade fundamentally still looking for higher US 2020/21 export, lower carryout’s which should support prices and eventually move then higher and retesting last weeks highs.
On Thursday, Managed funds were net sellers of 7,000 SRW Wheat; bought 5,000 Corn; net bought 2,000 Soybeans; sold 2,000 lots of Soymeal, and; net bought 5,000 Soyoil. We estimate Managed Money net long 11,000 contracts of SRW Wheat; long 385,000 Corn; net long 136,000 Soybeans; net long 72,000 lots of Soymeal, and; long 95,000 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.