Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
MORNING OUTLOOK
Grains are mostly lower. SH is down 8 cents and near 13.56. SMH is near 426.9. BOH is near 44.99. CH is down 1 cent and near 5.57. WH is up 2 cents and near 6.53. KWH is up 1 cent and near 6.36. Soybean selling linked to lack of new US soybean sales to China. US new crop soybean sales are a record 3.6 mmt. US stocks are higher. US Dollar is higher. Crude is higher. Gold and silver are lower. Groundhog day.
Chinese Ag futures (May) settled down 81 yuan in soybeans, up 10 in Corn, down 28 in Soymeal, down 104 in Soyoil, and down 100 in Palm Oil. Malaysian palm oil prices were down 93 ringgit at 3,397 (basis April) on drop in export reports, India’s increase in import tax.
In Argentina, conditions will trend drier in the middle part of this week. Net drying is expected in most of the nation through week 1 of the outlook. Some rise in crop stress will occur as a result mostly in the far south where there was not as much rain recently. Greater rain will likely occur in Argentina in week 2.
In Brazil, conditions will continue to be favorable for crops in most of the nation. Significant rain into early next week will gradually shift more into the northeast benefiting areas such as Minas Gerais which have been notably dry recently.
Brazilian farmers had harvested soybeans from only 1.9% of the area planted with the crop as of Jan. 28, according to agricultural consultancy AgRural. That’s the slowest start in ten years and far behind the 8.9% that had been harvested on the same date last year; AgRural forecasts a record 2020-2021 soybean crop of 131.7 million metric tons. Brazil soybean vessel line up 9.4 mmt. only 54 mt of Brazil soybeans were loaded in Jan.
Russian wheat export prices fell due to more active supply from farmers concerned about upcoming higher wheat export taxes later in the marketing season. Moscow is attempting to reduce wheat exports to help curb rising domestic food prices. It imposed the tax of 25 euros ($30) per tonne for Feb. 15 to 28, rising to 50 euros/tonne from March 1. It also plans to switch to a more complicated formula-based regime in summer. Russia wheat exports could reach 42 mmt versus USDA est of 39.
On Monday, Managed funds were net sellers of 9,000 SRW Wheat; bought 4,000 Corn; net sold 6,000 Soybeans; sold 1,000 lots of Soymeal, and; net bought 3,000 Soyoil. We estimate Managed Money net long 10,000 contracts of SRW Wheat; long 408,000 Corn; net long 157,000 Soybeans; net long 71,000 lots of Soymeal, and; long 115,000 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.
