Written Commentary
by Steve Freed,
SOYBEANS
Soybeans traded higher on word that US and China trade negotiators may soon resume trade talks. 3 things are needed to push prices higher. One is a weather issue. Currently there is none forecasted. Second is gradual increase in global economies. This could take time. Third is China buying. China need to buy 7-9 mmt of US old crop soybean to avoid increase in carryout. Bears doubt SN can trade much above 8.50 without large China buying or a weather problem. Trade est US soybean planting pace near 41 pct versus 22 ave. Weekly US soybean export sales were near 24 mil bu. Total commit is near 1,458 mil bu versus 1,648 last year. USDA goal is 1,775 mil bu vs 1,748 last year. Average trade guess for US 2019/20 soybean carryout is near 488 mil bu vs 480 USDA April estimate. Average trade guess for US 2020/21 soybean carryout is 430 mil bu.
CORN
Corn futures traded higher. Funds covered shorts after USDA announced new China old crop and new crop corn sales. Some feel these sales are part of the recent approved 1.5 mmt of new corn imports. Some estimate China has bought 1.25 mmt US old crop corn and 800 mt new crop. No one knows what China agreed to buy but some estimate near 15-20 mmt. US old crop demand needs to increase 200 mil bu to avoid increase in carryout. Bears doubt CN can trade much above 3.30 without a weather problem. Trade est US corn planting pace near 72 pct versus 55 ave. US 2 week Midwest weather forecast looks favorable for US crops. Cold temps over the next few days are not expected to hurt the US corn crop. Weekly US corn export sales were near 30 mil bu. Total commit is near 1,477 mil bu versus 1,824 last year. USDA goal is 1,725 mil bu vs 2,065 last year. Some feel final number could be 50-100 mil bu below USDA estimate. Average trade guess for US 2019/20 corn carryout is near 2,224 mil bu vs 2,092 USDA April estimate. Average trade guess for US 2020/21 corn carryout is near 3.389 mil bu. USDA report is May 12.
WHEAT
Wheat futures traded higher following higher traded in corn and soybeans. News that China bought US corn and may soon reopen trade talks offers support. Talk of record World 2020 supplies continued to offer resistance. Chicago wheat open Interest remains near season lows. Trade volume is also low. WN traded over recent resistance near 5.22. Next resistance is 5.30. Bears doubt WN can trade much over 5.50 without a weather problem. Weekly US wheat export sales were near 9 mil bu. Total commit is near 962 mil bu versus 938 last year. USDA goal is 985 mil bu vs 936 last year. Average trade guess for US 2019/20 wheat carryout is near 968 mil bu vs 970 USDA April estimate. Average trade guess for US 2020/21 wheat carryout is near 814. Average trade guess for US 2020 winter wheat crop is 1.245 mil bu vs 1,304 last year, HRW 739 vs 833 and SRW 280 vs 239. US cold temps over the next few days is not expected to hurt the US winter wheat crop.
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.
