Ag Market View for May 4
Soybeans, soymeal, soyoil corn and wheat traded higher. US stocks were marginally lower. US Dollar was higher. Crude was higher. Gold was lower.
Soybeans traded higher. Higher US soybean and soyoil cash basis offered support. Slowdown in US export program offered resistance. Positive US soybean cash crush margins keeps crushers active buyers of soybeans which tightens supplies. Next key input will be USDA May S/D report. Managed funds have been net buyers of 10,000 soybeans; 4,000 Soymeal, and; 2,000 soyoil. We estimate Managed Money net long 181,000 soybeans; long 50,000 Soymeal, and; net long 106,000 Soyoil. Some feel US using soyoil for jet fuel could add to US 2021/22 crush demand and try to encourage US farmers to plant 4-5 million more 2021 soybean acres to satisfy demand. Brazil soybean exports prices remain cheap due to slow China demand. Some feel 15.50 could be key resistance for SN. Same group feels SX may still be low at 13.60. There are no guarantees for futures price direction but current demand led rally is early for seasonal and tops are not usually made until late June or early July.
Corn futures traded higher. CN is near 7.00 for first time since 2013. CZ is near 5.82. Talk that China will take all open unshipped US corn sales is supportive. Ethanol margins are improving and talk of increase US summer driving could help corn demand for ethanol. There is talk of a shortage of gas truck drivers that could slow supply. There is also talk that Brazil 2021 corn crop could be 10 mmt below USDA 109. This could increase US 2021/22 corn exports. USDA will update US/World 2020/21 corn S/D on May 12. In that day USDA will release its first US/World corn S/D. Most east Midwest corn crop is rated above average. West and northwest corn need a rain. Our weather guy looks for 2 weeks of cool weather with moral rains especially east. Then US Midwest could dee 10 days of warm and dry weather. Managed funds were net buyers of 16,000 contracts of Corn. We estimate Managed Money net long 417,000 Corn. US farmer a reluctant seller of corn. So far waiting on sales has been the best marketing plan. Some sold too much too early and are waiting for higher prices to add to sales and average up. Interesting that there is talk that on twitter, Reddit has been promoting that corn futures may be going higher. They have a little over 164,000 followers. Reddit has been talking about 12.00 corn may be possible. US corn planting is ahead of average. Conditions are too wet in MO, LA, AR, IN and OH. Conditions are too dry in US west Midwest, PNW and US north plains.
Wheat futures traded higher. Wheat futures remain mostly a follower to corn. Concern about long term dryness across US PNW, NA HRS crops and drop in HRW ratings are offset by better US SRW ratings, EU and Black Seas weather. Still Matif futures are making new highs on tight old crop supplies and fact east EU prices are competitive to buyers. Managed funds have been net buyers of 5,000 contracts of SRW Wheat. We estimate Managed Money net long 4,000 contracts of SRW Wheat. IHS Markit (Informa) will issue its May US and world crop reports Wed, May 5, at 10:30 am CT. USDA May 12 report will contain NASS first US 2021 winter wheat production forecast. Interesting to note that Reddit is talking about higher US wheat prices on twitter. They have a little over 164,000 followers. Reddit has been talking about 14.00 wheat futures may be possible. There are no guarantees in futures price direction but Dec Minneapolis wheat tends to top in late May or early June.
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.