Written Commentary
by Steve Freed
USDA report day. Grains are mixed. SN is up 1 cent and near 8.56. CN is unchanged and near 3.18. WN is down 4 cents and near 5.13. US stocks are higher. Crude is higher. Gold is higher. US Dollar is lower. Saudi Arabia is talking about more production cuts. Reports POTUS does not want to renegotiate trade with China.
Most look for a neutral to bearish USDA report. In corn, USDA should drop US old crop demand 150-200 mil bu. New crop demand could be down 300-400 mil bu. USDA could drop old crop US soybean demand 50-100 mil bu due to lower exports. Key here is their outlook for China buying, USDA could also increase 2020/21 US soybean demand thinking demand will start coming back Q4 of 2020. USDA could estimate US 202 wheat crop below last year but World supplies could be record high. Some look for soybean futures to gain on corn and wheat.
Average trade guess for US 2019/20 corn carryout is near 2,224 mil bu vs 2,092 previous, soybean 488 vs 480 and wheat 968 vs 970. Average trade guess for US 2020/21 corn carryout is near 3.389 mil bu, soybean 430 and wheat 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.
Post USDA report, trade will see if managed funds add to new longs in soybeans on hope for new China buying. Large World and US 2020 corn supplies may limit the upside in corn.US 2 week weather forecast is favorable for crops and many suggest farmers increase cash sales on rallies this week. Improving Europe and Black Sea weather could also limit the upside in wheat futures.
US corn plantings were near 67 pct versus 56 average. IA was 91, IL 68, OH 31. US soybean plantings were 38 vs 23 average. IA was 71, IL 43 OH 24. USDA rated the US winter wheat crop 53 pct good/ex versus 55 last week. US spring wheat planting is 42 pct versus 63 average. ND only has 7 pct of corm, 4 pct soybean and 27 pct spring wheat planted.
On Monday managed funds sold 5,000 SRW Wheat, sold 2,000 corn, net bought 5,000 soybeans, sold 1,000 soymeal and net sold 1,000 soyoil. We estimate Managed funds are net even SRW Wheat; net short 185,000 Corn; net long 26,000 in Soybeans; net short 12,000 lots of Soymeal, and; net short 5,000 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.
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.
