Written Commentary
MORNING OUTLOOK
Grains are lower. SH is down 7 cents and near 13.47. SMH is near 427.3. BOH is near 43.68. CH is down 4 cents and near 5.38. WH is down 8 cents and near 6.36. KWH is down 6 cents and near 6.12. Soybean selling linked to lack of new US soybean sales to China, lack of concern about South America crops, negative chart signals and 2 month high in US Dollar. US stocks are higher. US Dollar is higher. Crude is higher. Gold, silver and copper are higher.
Chinese Ag futures (May) settled down 74 yuan in soybeans, down 3 in Corn, down 62 in Soymeal, down 150 in Soyoil, and down 148 in Palm Oil. Malaysian palm oil prices were down 162 ringgit at 3,229 (basis April) at midsession on export demand concerns, India import tax hikes. Jan exports down 35 pct, 70 pct to India.
In Argentina, net drying is expected across much of the region through next Tuesday. The area most at risk for some increase of stress is southeastern La Pampa and southwestern Buenos Aires where soil moisture is lowest. Greater rain is needed in Argentina in week 2. In Brazil, conditions will still be favorable for crops in most of the nation. Significant rain will occur Friday through Tuesday from Mato Grosso through Minas Gerais, Rio de Janeiro, Espirito Santo, and southern Bahia. Weather eyes beginning to shift from South America to North America.
Market bulls need new US corn and soybean sales to China to support prices. Word China is cancelling Brazil soybean sales offered resistance. Still some feel they could switch demand to US. SH now below 20 day moving average. Momentum has turned down. Most feel SH in a broad range between 13.00-14.00. US soybean demand is too low and carryout is too high. Corn seeing a wave of profit taking. CH also in a 5.20-5.60 range. China corn imports too low, SA crop too high, US exports to low and US carryout too high. End users should be buyers of cash need. US buyer having problems securing summer corn. Wheat is a follower. Sellers dropped prices to do Egypt business. Uncertainty over Russia, EU and Argentina exports and unknown North America 2021 weather should offer support. WH traded below 6.40 support. Next support is near 6.20 WH. Resistance is 6.60.
On Tuesday, Managed funds were net sellers of 5,000 SRW Wheat; sold 22,000 Corn; net sold 12,000 Soybeans; sold 2,000 lots of Soymeal, and; net sold 4,000 Soyoil. We estimate Managed Money net long 5,000 contracts of SRW Wheat; long 386,000 Corn; net long 145,000 Soybeans; net long 69,000 lots of Soymeal, and; long 111,000 Soyoil.
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.
