Written Commentary
MORNING AG OUTLOOK
A gap lower open in the US $$ helped fuel gains across most of the Ag space overnight. The dollar index fell to a fresh 4 month low as the Japanese yen surged on rising risk of Govt. intervention to support the currency and counter market speculation. A dryer than normal pattern across Southern Argentina also providing underlying support. Dry areas in SC Brazil are expected to see some relief at the end of this week. This weekend’s winter storm is finally pushing off the US east coast leaving a heavy trail of snow, ice and rain. Much below normal temperatures across the central Midwest to hold through the end of the week with gradual easing in early February. Some wheat areas of the central Midwest along with central and northern plains may been damaged by the frigid temperatures. The biggest feature in Friday’s CFTC data was heavy speculative buying in soybean oil while selling the meal. Money managers as of Tues. Jan. 20th remain short corn, wheat and soybean products with their long position in soybeans at 10k contracts. Friday saw heavy speculative buying in corn cutting their short position to 63k contracts. Spot crude oil is little changed in 2 sided trade. US stock indices are steady to slightly lower.
Corn:
Mch-26 rejected trade above Friday’s high pulling back $.02 to $4.28 ½. Friday’s export sales at 158 mil. bu. were a 5 year high and fueled the surge of speculative buying. OI jumped nearly 19k contracts. COF as of Jan. 1st at 97% of YA is in line with expectations. Placements at 95% were slightly above the 93% expected. AgRural raised their Brazilian production forecast .6 mmt to 136.6 mmt, vs. the USDA est. of 131 mmt. They est. the 1st crop harvest and 2nd crop plantings both at 5%.
Soybeans:
Mch-26 beans traded to a fresh high for the month currently holding near $10.70 up $.04. Next resistance at 100 day MA at $10.82 ¼. Mch-26 meal is slightly lower holding near $300. Next resistance also at the 100 day MA at $303.30. Mch-26 oil hovering just above $.54 while holding within Friday’s range. Spot crush margins surged to a fresh 5 month high on Friday closing at $1.86 bu. AgRural raised their Brazilian production forecast .6 mmt to 181 mmt, vs. the USDA est. of 178 mmt. They est. harvest has reached 5%. Harvest in Mato Grosso, the top producing state, advanced 7% to 14% complete.
Wheat:
Prices are steady to $.02 higher. CGO Mch-26 on Friday broke out of its $5.00-$5.25 range. Prices this AM hovering near its 100 day MA of $5.31. KC Mch-26 is slightly higher holding near $5.41 ½ just below the January high at $5.44 ¾. Mch-26 MIAX overnight was capped at its 100 day MA at $5.78. Likely weeks before we learn the extent of damage from the recent arctic blast.
Interested in more futures markets? Explore our Market Dashboards here.
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.
