Grains Mostly Higher
Grains are higher. SX is up 3 cents and near 9.08. CU is up 2 cents and near 3.29 WZ is up 1 cent and near 5.36. KWZ is unchanged and near 4.57. US stocks are higher. Fact FDA approved plasma treatment for virus before testing was complete offered support. Tech stocks are higher. China new rules rallied their stock prices. Traders will also be watching US Fed Chairman comments of inflation strategy at this weeks economic conference. US Dollar is lower. Crude is higher.
For the week, SRW Wheat prices were up roughly 26 cents; HRW up 21; HRS up 17; Corn was up 2 cents; Soybeans up 7; Soymeal down $1.00, and; Soyoil up 55 points. Crushing margins were down 1 cent at $0.98; Oil share unchanged at 34%.
Chinese Ag futures (January) settled down 36 yuan in soybeans, down 22 in Corn, up 2 in Soymeal, down 10 in Soyoil, and down 14 in Palm Oil. Malaysian palm oil prices were down 18 at 2,663 (basis November) at midsession on weak export data, rival oils.
The 6 to 10 day forecast for the Midwest has both models indicating fairly healthy rains to fall in all of the region; both see totals of at least .75-1.25” to fall, with some 1.25”+ totals also possible, especially in the west. Temps will run above average in most of the region for the week ahead as well as into the weekend and then will fall to below average as we work through the first half of next week. The 11 to 16 day forecast for the Midwest has average to a bit less than average rainfall and below average temps
Managed funds were big buyer of corn futures last week. This could be due to dry US Midwest weather and talk Ukraine crop is also lower. CU is back above the 100 day moving average with 3.32 resistance. Most feel Large 2021 global corn supply will limit the upside in CZ above 3.50. Trade expected US farmers to sell there if prices reach that level. Most look for weekly US corn crop rating to drop 102 pct.
Managed funds also increased their net soybean long last week and moved from a short soymeal position to a net long. Managed funds remain large soyoil long. Some of the soybean buying was due to China buying US soybeans. US prices are competitive to China versus Brazil Sep-Jan. Argentina dryness may have also offered support. SX is above the 200 day moving average for the first time since January. Large 2021 global soybean supply will limit the upside in SX above 9.25
Dec Chicago wheat is trading near the upper end of the 2020 range between 5.00-5.50. Last week rally in French Matif prices linked to new Russia buying offered support. Rumors of China buying US HRW also supported prices. Most suggest cash sales above 5.40 WZ, 4.65 KWZ and 5.70 WZ21.
On Friday, Managed funds were net buyers of 4,000 contracts of SRW Wheat; net bought 7,000 Corn; sold 1,000 Soybeans; net sold 3,000 lots of Soymeal, and; bought 1,000 Soyoil. We estimate Managed Money net long 2,000 contracts of SRW Wheat; short 110,000 Corn; net long 101,000 Soybeans; net long 5,000 lots of Soymeal, and; long 56,000 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.