Written Commentary
by Steve Freed
SOYBEANS
Soybeans traded higher. Some feel estimates of a record March US soybean crush and higher energy prices helped trigger new buying. Most still feel lack of China buying US soybeans will limit the upside in prices. Open interest is dropping into May contract first notice day. SN support is near 8.30. Resistance is near 8.50. May deliveries are est near 250-500 contracts. US Midwest 2 week weather forecast looks favorable for planting and early crop conditions. Weekly US soybean export sales are est near 700-1,00 versus 345 last week. Informa will release their May crop report numbers for 2020 on May 5. They have been using US 2020 soybean acres near 83.5, crop of 4,220 mil bu, total demand near 4,380 and carryout near 360 mil bu. Trade estimates US March soybean crush at a record 191.5 mil bu. This would be the largest monthly crush since 188.8 in Jan, 2020. This compares to 179.4 last year.
CORN
Corn futures traded higher. Dec corn traded higher early and tested 3.36. Some feel that may be linked to liquidation of the May contract before first notice. Deliveries are expected to be near 750-1,000 contracts US 2 weeks weather forecast looks favorable for planting and early crop conditions. Some are raising their 2020 corn yield above trend due to early plantings. The early rally was met with increase farmer selling. Informa has also been using US 2020 corn acres near 97.0. Some feel sharp drop in corn prices versus soybean could drop final acres 1-2 million. Informa is now using a crop near 15,890 mil bu, total demand near 14,850 and final carryout near 3,400. Some fear drop in US domestic use could increase US 2019/20 carryout from USDA estimate of 2,092. This could add to the 2020/21 final US carryout and force prices even lower. Weekly US ethanol production was down 4 pct from last month but still down 47 pct from last year. Stocks dropped 5 pct from last month but are still up 16 pct from last year. Margins remain negative.
WHEAT
Wheat futures traded lower. Improved weather in Europe and parts of Russia and Ukraine continues to offer resistance. WN is now trading below moving average support. Momentum is down. Open interest is near season lows. Russia wheat prices have dropped. Limited export has pushed wheat back into the country. This has dropped domestic prices. There is a steep 70-75 cents discount to new crop July FOB prices to nearby. This is negative to futures. Lower Russia prices offset fact USDA dropped weekly US HRW crop ratings due to dry weather and some freeze damage. Weekly US new crop wheat export sales are est near 100-350 mt. Informa will release their May crop report numbers for 2020 on May 5. Informa is currently using a US 2020 wheat crop near 1,880 mil bu versus 1,920 last year. They are using total demand near 2,010 and carryout near 965. Some are estimating the carryout closer to 750 due to a higher export number.
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.
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.
