Global Commodities Newsletter July 2021

Market Outlook for US and South America Regions

Read Full July Edition


The USDA WOB July report was neutral for corn and soybeans, but bullish for U.S. spring wheat prices. After the July USDA report, soybean, corn and wheat futures will focus on U.S. summer weather. The upper west Midwest two-week weather forecast is hot and dry. This is also true for Canada and the  U.S. Pacific northwest.  

Lean Hogs

Demand for cattle and for boxed beef moved in opposite directions in June.  June 2021 live cattle on June 1 closed at the lowest price of the month at $113.35/cwt with a daily low of $111.47/cwt and then began to move higher throughout the month climbing to $124.22/cwt on May 22 with the highest price at $123.10/cwt to settle and out the month at $122.50/cwt.  

Live Cattle

June lean hog trading continued with the meteoric rally that began a year ago June 2020. For June 2021 lean hogs the low was $116.15/cwt on June 1, and June lean hogs rallied to the last trading day on June 14 on a contract high at $122.77/cwt.  But that is only part of the picture for the month of June.  

Stock Index Futures

S&P 500 and NASDAQ futures advanced to new record highs in July due to vaccine and fiscal stimulus optimism, along with better than expected quarterly corporate earnings results. In addition, the bulls were encouraged when Federal Reserve Chairman Jerome Powell told members of Congress that inflation will moderate and that the central bank plans to maintain its current ultra-low interest rate policies.    

US Dollar Index

Flight to quality buying came into the U.S. dollar in light of concerns about the state of the global economic recovery. There was temporary pressure on the greenback when the U.S. employment numbers were released, which were on balance weaker than expected.


The euro currency peaked in late May and has since traded sideways to lower.  There were only temporary gains for the euro on news that wholesale prices in Germany increased 10.7% year-on-year in June of 2021, which was the biggest increase since October 1981. Euro zone retail sales were down 3.1% from a month earlier in April, following an upwardly revised 3.3% growth in March and compared with market expectations of a 1.2% decline. 

Crude Oil

Crude oil prices trended higher in April until early July. Much of the price gains were linked to prospects of an improving global economy. However, there was some pressure more recently due to reports that OPEC reached a compromise with the United Arab Emirates, agreeing to increase the amount of oil the cartel member can eventually pump as part of a wider agreement with Russian-led producers to increase global supplies.  


Gold prices advanced when Federal Reserve Chairman Jerome Powell said inflation remains a transitory phenomenon. The Fed chairman doubled down on his message that inflation was being caused by supply bottlenecks that should ease in time.

Market Outlook for China and Asia Regions

The key Chinese and Asian event over the last 30 days has been China’s strong performance in foreign trade and the ending of quantitative easing in New Zealand. China’s exports jumped 32.2% year-over-year and the New Zealand central bank reduced its bond purchasing on July 14.  In June, Japan’s manufacturing sector expanded at the slowest pace in four months, as output took a hit from a global shortage of chips which reduced factory output. The final au Jibun Bank Japan manufacturing PMI in June slipped to 52.4 on a seasonally adjusted basis from last month’s 53.0.

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.

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© 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.

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