Written Commentary
SOYBEANS
May soybeans traded higher and over key 20 DMA resistance. Fact USDA dropped US soybean carryout due to higher exports offered support. Lower Argentina crop and lower Brazil 2022 exports should send SN above 17.00. Index funds are rolling longs from May to July. USDA dropped US soybean carryout 25 mil bu to 260. This due to higher US export and lower Brazil crop. USDA also lowered China imports to 91 mmt due to lower economy and covid lockdowns. Some feel they are now 3-4 mmt too low. USDA increased US soyoil exports 100 mil lbs and raised US domestic soymeal use 200 tsts but lowered exports 200 tsts. Higher sunoil and palmoil prices could help BON eventually test 80 cents. World 2021/22 soybean+soymeal exports are near 97.4 mmt vs 95.1 ly. World soybeans 80.6 vs 80.0 ly. Brazil 34.0 vs 23.2 and US 44.5 vs 55.7.
CORN
Corn futures ended higher but off session highs. USDA US and World corn numbers were in line with trade estimates. New money bought futures today due to long range forecast of a dry US west Midwest and wet US east Midwest forecast and fact USDA may be too low in their estimate of US corn exports. USDA kept US 2021/22 corm carryout at 1,440 mil bu. They raised ethanol use 25 but dropped feed and residual 25. USDA kept exports at 2,500 mil bu but lowered Ukraine exports to 23 mmt. USDA is too low in US corn exports. This could push CN closer to 8.00. USDA raised Ukraine end stocks 2 mmt because they can’t ship it! They raised EU corn end stocks 1 mmt. They raised World beginning stocks 1 mmt. Some will argue that final US corn exports could be closer to 2,700 mil bu or even as high as 2,900. Trade though will need to see new sales to push futures higher. Trade will now focus on USDA May report. In May, USDA will issue their first estimate of US/World supply and demand. Some could see US 2022 corn crop near 14,660 mil bu vs USDA Outlook of 15,240. Some feel demand could be near 15,035 with exports 2,900 vs USDA Outlook of 14,830 and 2,400. Some look for US 2022/23 carryout near 770 mil bu vs USDA 1,877.
WHEAT
Wheat is wheat WK ended near 10..51. 20 DMA is near 10.62. KWK ended near 11.06. Dry US south plains weather could help KWK test 12.00. MWK ended near 11.27. MWK supported by lower US 2022 spring wheat acres. USDA raised US wheat carryout 25 mil bu due to lower exports. USDA lowered EU exports 3.5 mmt, Ukraine 1 mmt but raised Russia 1 mmt. There are some that fear as the Ukraine war continues less Black Sea wheat will be exported. USDA dropped India wheat end stocks 3.6 mmt. Trade will now focus on USDA May report. In May, USDA will issue their first estimate of US and World supply and demand. Some could see US 2022 wheat crop near 1,810 mil bu vs USDA Outlook of 1,940. Some feel demand could be near 2,095 with exports 950 vs USDA Outlook of 1,977 and 850. Some look for US 2022/23 carryout near 425 mil bu vs USDA 736.
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.
