Ag Market View for Apr 21
Soybeans, soyoil, soymeal, corn and wheat traded higher. US stocks were higher. US Dollar was mixed. Crude was lower.
Soybeans traded sharply higher. Higher US domestic soybean basis and higher World vegoil prices helped push futures higher. Talk of short covering before May deliveries also offered support. China Ag Minister announced new guidelines for hog and poultry margins that suggest less soymeal in rations. Some feel record feeding of higher protein wheat could be reducing need for soymeal for now. Dalian soymeal futures were higher and near 528. Malaysia palmoil futures also traded higher on supply concerns and following higher US soyoil prices. Talk of US using soyoil as biofuel for jet fuel should push soyoil futures higher. Weekly US soybean old crop export sales are est near -100-250 mt vs 90 last week. New crop 250-500 mt vs 265 last week. SK also supported by est of lower US 2020/21 soybean carryout and tight US 2021/22 carryout even with normal crop.
Corn futures traded higher. Support was from rumors China was looking to buy 1.0-2.5 mmt US new crop corn. US China Ag Attaché estimated China 2020/21 corn imports at 28 mmt vs USDA 24. Corn also supported by talk that US ethanol plants are seeing better margins and willing to pay up for cash corn ownership. Weekly US ethanol production was unchanged from last week but up 67 pct from last year Covid impacted production. Stocks were also unchanged from last week but also down 26 pct from last year. Trade also supported by talk US 2020/21 corn carryout could drop below last USDA guess due to higher exports and domestic use. Talk of lower Brazil corn crop could reduce their exports and increase US. Some feel Brazil crop is closer to 100 mmt vs USDA 109 and could drop to 91-93 mmt if May weather is dry. Weekly US old crop corn export sales are est near 300-800 mt vs 327 last week. New crop is est near 50-300 mt vs 52 last week. One of the biggest bulls in the market suggested spec longs take some profits as both CK and CZ are near key price objectives. Interesting that same group is suggesting US end users to buy May and take delivery if they cannot secure summer cash needs. April 1 cattle on feed could be up 6 pct. Placement up 33 pct.
Wheat futures traded higher. Some concern about colder than normal US temps lowering US 2021 HRW crop especially in OK offered support. Some buying also linked to a second morning of colder than normal temps stressing US SRW crop. 4-5 pct of MO and IL SRW crop are heading. MATIF wheat futures continued to trade higher and near 6 week highs on concern about Canada, north US plains, west Europe and Black Sea 2021 wheat crops. There continues to be growing uncertainty over Russia 2021/22 wheat exports. WK. KWK and MWK are nearing key price objective. Some feel less than ideal US and north hemisphere weather will be needed to push futures considerably higher. Some still feel increase US vaccinations will help increase US food demand the last 2 quarters of 2021. Energy prices were lower on concern that increase in global virus cases could slow rebound in global economies. World 2021 wheat crop will need to increase 10-12 mmt to keep World end stocks from declining for the 5th straight year. World Bank this week increased their forecast of World 2021 food inflation by 17 pct.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
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.