by Steve Freed
Grains are lower. SN is down 12 cents and near 8.37. CN is down 6 cents and near 3.12. WN is down 10 cents and near 5.06. Stocks are lower. Crude is lower. US Dollar is higher. Concerns about global demand and deflation weighed on commodity prices overnight.
Fact China needs to buy 7-9 mmt of US old crop soybean to avoid and increase in US 2019/20 carryout offers resistance to soybean prices. Soymeal prices could be on the defensive due to lower US feed demand. 20 pct of US soybean crop is planted versus 11 average under favorable conditions. Soybean futures resistance is now near 8.50. Prices could find support on talk USDA could estimate US 2020/21 soybean carryout near 360 mil bu on their May 12 report.
Wheat trade is lower. Wheat prices have dropped on improving Europe and Black Sea weather. Talk of lower US 2020 HRW crop and higher SRW could support KC futures versus Chicago. Trade below 5.00 WN could put WN in a 4.60-4.90 range. Black Sea was mostly dry over the weekend but rains are still forecasted for this week. Weekly US winter wheat crop rating could show a slight decline to dry weather. US spring wheat plantings are estimated near 25 pct versus 45 average.
Corn futures continue to be on the defensive due to drop in US corn demand and good US 2020 weather. 50 pct of the US corn crop should be planted versus 39 average. Dec corn may be overvalued near 3.40. Some feel Dec corn could trade as low as 2.50 if US summer weather is normal. US 2020/21 corn carryout could be as high as 4.0 bil bu.
On Friday, Managed funds were net sellers of 5,000 contracts of SRW Wheat; net sold 3,000 Corn; net sold 4,000 contracts of Soybeans; net sold 1,000 Soymeal, and; sold 1,000 Soyoil. We estimate Managed Money net long 10,000 contracts of SRW Wheat; net short 144,000 Corn; net long 16,000 in Soybeans; net short 5,000 lots of Soymeal, and; net short 5,000 Soyoil.
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.
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.