Written Commentary
Morning Outlook
Grains are lower. SX is down 6 cents and near 9.48. SMV is near 303.6. BOV is near 32.79. CZ is down 3 cents and near 3.54. Bears still calling for a top in corn and soybean prices as US harvest nears. WZ is down 6 cents and near 5.57. KWZ is down 3 cents and near 4.82. US stocks are higher. Traders are looking for positive US jobs and economic data today. US Dollar is higher. Crude is higher.
Chinese Ag futures (January) settled down 15 yuan in soybeans, up 14 in Corn, down 5 in Soymeal, up 14 in Soyoil, and up 16 in Palm Oil. Malaysian palm oil prices were up 7 ringgit at 2,791 (basis November) at midsession looking for a fifth straight session of gains and supported by a weaker ringgit.
The 6 to 10 day forecast for the Midwest has mixed ideas from the models with the GFS showing moderate rains in the eastern region of the Midwest, little elsewhere. The European has rains in the west with little elsewhere. Temps will be falling to below average by the weekend and the first half of next week.
The 11 to 16 day outlook for the Midwest has average to above average temps and below average precip for the region.
August was a dry month for parts of E NE, IA and NW IL. Sep 1-15 forecast call for below normal temps and normal rains. Sep 16-30 forecast calls for above temps and below rains. Oct-Nov forecast calls for above temps west, normal east, Rainfall could be normal to above. Tropical activity could be below normal Sep1-18. Could be more active after Sep 18.
US corn futures are trying to balance the size of the US crop versus demand. What crop size is 3.56 CZ pricing in? USDA Sep 11 report could set the tone for prices into the fall. Trade will need to see a yield below 175 to trade higher. US farmer is unwilling to sell corn here. Prices are closer to breakeven but they are unwilling to sell on concern about losing future US aid. Last year, US did not pay to early sellers. US 202021 corn export demand continues to improve. Ethanol demand though is not.
US soybean futures are trying to balance the size of the US crop versus China demand. What crop size is 9.50 SX pricing in? USDA Sep 11 report could set the tone for prices into the fall. Trade will need to see a yield below 51 to trade higher. Analyst are suggesting US farmers to sell US 2020 crop here.
Higher US wheat futures linked to increase money flow. US south plains, south Russia soils are dry for 2021 winter wheat seeding. Argentina is dry. EU and Russia farmer remains reluctant to sell cash. Higher prices is not helping. Analyst are suggesting US farmer complete 2020 cash sales. Black Sea prices work to Mexico versus US. EU prices work to east coast US.
On Tuesday Managed funds were net buyers of 11,000 contracts of SRW Wheat; bought 1,000 Corn; bought 1,000 Soybeans; net sold 2,000 lots of Soymeal, and; bought 1,000 Soyoil. We estimate Managed Money net long 31,000 contracts of SRW Wheat; short 48,000 Corn; net long 152,000 Soybeans; net long 13,000 lots of Soymeal, and; long 70,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 15,300 contracts; HRW Wheat down 6,200; Corn up 16,700; Soybeans up 7,200 contracts; Soymeal down 1,500 lots, and; Soyoil up 2,400.
Deliveries were 360 Soymeal; ZERO Soyoil; ZERO Rice; ZERO Corn; 52 HRW Wheat; ZERO Oats; 2 Soybeans; 33 SRW Wheat, and; ZERO HRS Wheat.
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.
