Report Day, Grains Off to Higher Start
USDA report day. Grains are higher. SH is up 6 cents and near 14.96. SMH hit new highs near 464.0. BOH is near 60.83. CH is up 2 cents and near 6.44. WH is up 2 cents and near 7.49. KWH is up 2 cents and near 8.47. MWH is up 1 cent and near 9.10. US stocks are higher. US Dollar is lower. Crude is higher. Gold, sugar, coffee, cocoa, sugar and cotton are higher. Financial markets are trying to decide what is more important – reopening of China or forecast of global recession in 2023.
SH is near 15.00. More Argentina and China price premium is being added to soybean and soymeal futures. Some rains fell across central Argentina with BA, Cordoba and Santa Fe seeing .20-.90 inches of rain. More is forecasted for north Argentina over the next 72 hours. Still more rain is needed in the dry areas. Normal rains are forecasted for central Brazil. Conab est Brazil soybean acres up 5 pct and 16th consecutive year that Brazil soybean acres have increased. Brazil soybean crop is forecasted up 27 mmt vs ly. Argentina crop could be 46 mmt, down 6 from USDA but up 2 vs ly. USDA is expected to est US 2022/23 carryout at 238 mil bu today vs 220 in November.
CH also found some support due to the dry Argentina weather. Argentina corn crop saw unexpected rains overnight but more is needed. US corn export demand remains slow. Weekly exports will need to average 36 mil bu to reach USDA export goal. Most feel USDA should lower US export est 100-150 mil bu today and raise carryout same. WASDE is not expected to change US feed use or ethanol numbers. USDA is expected to est US 2022/23 carryout at 1,237 mil bu today vs 1,182 in November.
Wheat futures are struggling with a lack of new news. WASDE should increase Russia and Australia wheat crops and exports today. This should offset a drop in Argentina. WASDE should keep US supply and demand numbers unchanged from November. Russia cash wheat market is firming but is not yet enough to shift global trade from Russia. Egypt bought Russia wheat is their tender. Argentina wheat harvest is 42 pct done with yields down 32 pct from ly. Wheat futures are oversold but lower global demand and lower Russia prices limits new buying interest. US south plains remain dry.
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.