Written Commentary
SOYBEANS
Soybeans and soymeal traded lower. Noon US GFS weather maps added rains late next week across most of IA and C IL. GFS map has been the driest over the next 2 weeks versus the EU. For the week, SU ranged from a high near 14.31 to 13.51. SMU ranged from 371 to 352. Soybean open interest has dropped from a high in Oct,2020 near 1,050 million contacts to 685 thousand. Some of this due to slowdown in China buying US soybeans. USDA currently est US soybean yield near 50.8 vs 50.2 last year. Higher crops in east and south could offset lower crop in MN, ND and SD. Brazil may be sold out of export soybeans. Most look for China to begin to buy US in August but will they buy 35 mmt from US due to talk of lower China crush margins.
September soybean futures including open interest
CORN
Corn futures traded lower and closed near session low. CU range was from 5.69 to 5.44. Sell stops were hit neat 5.53. EU weather model suggest warm and dry weather for much of the US Midwest next week but suggest showers and cooler temps starting next weekend for the second week. Noon GFS model today added rains for IA and C IL late next week. That added to pressure on futures. Cash market firmed on lack of new farmer selling. Headlines talked about effort by Democrats in Congress to eliminate biofuel mandates. Fact WH delayed policy for Renewable Fuel Standards due to various court ruling also weighed on prices. Most suggest low odds for changes of mandates. Most est US 2021/22 corn ethanol demand near 5,350 mil bu vs USDA 5,200 and 5,050 this year. More and more doubt that USDA will may many changes in the August corn supply and demand. NASS will update US corn yield based on farmer survey. They could keep yield near 179.5. They may also decide not to increase US 2021/22 export demand until they see China buy. USDA est Brazil crop near 93 mmt and exports near 28 vs previous year crop of 102 and 35 exports. Some feel the crop is closer to 80 mmt which could drop exports to 21. USDA already forecast Brazil 2022 crop near 118.
September corn futures including open interest
WHEAT
Wheat futures closed lower following lower corn prices. WU traded near 6.84 with a range from 6.96 to 6.77. KWU traded near 6.40 and ended near session lows. Range was 6.60 to 6.39. MWU settled near 8.83 and also near session lows. Range was from 9.09 to 8.82. This week lower Commodity prices weighed on grains and wheat. US export prices remains a premium to other export origins. Some were looking for support from lower US and Canada HRS crops, talk of lower Russia crop and concern about lower quality of EU crop due to rains during harvest. Some est Canada HRS crop near 21 mmt vs USDA 31.5. Australia crop could be near 19 mmt but it is turning dry across north and central area. Crop is rated 57 oct G/E vs 22 last year. Wheat open interest drop from 422 thousand contracts on June 11 to 346 thousand as export demand is slower than last year.
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.
