Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
MORNING OUTLOOK
Risk off. Grains are lower. SX is down 8 cents and near 14.48. SMZ is near 426.3. BOZ is near 65.31. CZ is down 10 cents and near 6.78. WZ is down 15 cents and near 8.95. KWZ is down 12 cent and near 9.67. MWZ is down 10 cents and near 9.67.
US Dollar is higher. US stocks are lower. Crude is lower. Gold, silver, copper, coffee, cocoa, sugar and cotton are lower. TS Hermine is heading for W Florida.
Some feel that Thursday’s US export sales were negative and offered resistance to soybean, soymeal and soyoil futures. South America soyoil export prices continue to drop with spread between US and SA low enough for SA exports to US. World soybean export prices continue to slide lower due to China slowdown in buying. US soybean export commit is up 11 pct versus last year but this is down versus 13 last week. Higher USD and lower across the board commodity prices could be in response of Global Central Banks tightening and threat of global recession and higher unemployment. India announced a switch to higher palmoil imports and lower soyoil.
US corn futures are lower and back near 20DMA near 6.80. Trade down to 200DMA near 6.65 could suggest a change in trend to lower. Trade reacted negatively to US weekly export sales. Commit is 50 pct of last year. Ukraine and South America export corn prices are below US. US Midwest temps are cool but should warm next week. 2 week forecast is dry which should aid harvest. NE IL corn crop is slowly maturing which suggest a late start to harvest. Most look for USDA October crop guess could be down from September but concern over lower export demand could offset the lower crop.
Wheat futures are also lower. Higher USD is not helping. Could be seeing some long liquidation into the weekend. Lower Black Sea wheat export prices offers resistance. Low US wheat export sales also raised concern about demand. US south plains and Argentina dryness offers support. Rains are forecast for W EU. E EU and Ukraine are dry. Concentrated Global Central Bank raising interest rates to fight inflation could push Global economies into a recession and increase unemployment and reduce food demand. US HRW is $80 above German and US SRW is $50 above French. Russia wheat export prices are $30 below French and $40 below Germany.
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.
