Written Commentary
SOYBEANS
Soybeans treaded higher and made new highs. Some fund buying was linked to talk Brail dropped import duties on soybeans and soyoil. US domestic soybean basis traded sharply higher as crushers are unable to get summer coverage. Cash crush margins are positive. There was talk that C IL soyoil basis jumped to 12 cents over the May on concern over lower summer supplies. SK had a range of 14.50-14.85. Some now feel SK could test 15.00-15.20 before May deliveries. May shorts may not want to be short closer to first notice. There was also talk that Canada may have bought 2 cargoes of Ukraine rapeseed for August delivery. Long term Canada forecast is warm and dry. Ukraine is also slowing new sunoil exports. World Bank sees global commodity prices remaining firm into 2021. Ag prices could increase 14 pct vs 2020.
CORN
Corn futures continue to traded higher. Managed funds were net buyers of 17,000 corn contracts. We estimate them to be long 443,000 contracts. Early trade volume was high but slowed later in the session. Some feel CK could test 6.20-6.25 before May deliveries. CK range was 5.92-6.11. Some of the buying was linked to higher US domestic basis. Some feel ethanol margins are improving. This and increase exports could continue to firm the basis. Most look for weekly US ethanol production to be near last week and stocks also near last week. There was talk that Brazil corn crop could be near 100 mmt vs USDA 109 guess. Continued dryness in May could drop the crop to near 91-93 mmt. Brazil dropped their import tax on corn. Domestic Brazil corn prices are a record $7.35. Parana corn is rated 62 pct G/E vs 76 last week and 90 ly. Lower Brazil crop could increase demand or US exports. USDA announced 114 mt US corn to Mexico. Cold US temps could slow US corn plantings and early germinations. Most hear US farmers may not increase corn plantings from early intentions due to higher input cost and lack of ability to get seed. This and talk of a drier and warmer than normal west Midwest summer could still push corn futures higher. Trade est US April 1 cattle on feed up 6 pct and placements up 33 pct.
WHEAT
Wheat futures traded higher but backed off session highs into the close. Wheat futures are following corn although dryness in US north plains, Canada prairies and colder than normal US temps may be offering support. Parts of US HRW and SRW crop areas could see temps tomorrow morning below freezing. Key could be how cold and how long. Some feel 30-65 mil bu of HRW could be at risk. 4 pct of MO SRW and 5 pct of IL SRW crop are heading. USDA rated the US 2021 winter wheat crop 53 pct G/E vs 53 last week. PNW white ratings dropped 7-10 pct. USDA est US 19 pct spring wheat crop planted vs 7 last week. Trade est Canada 2021 wheat acres near 23.7 million versus 25.0 last year. WK is near 6.59. Range was 6.50-6.79. KWK is near 6.28. Some could see KWK test 6.62 before May deliveries.
World Bank expects commodity prices to stay firm on economic growth
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.
