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ADMIS Daily Grain Commentary
ADMIS Opening Market View
3/7/2014 9:02:38 AM
Higher grains this am. New money is coming into grain mrkts due to higher demand for US exports, positive techl signals and talk of uncert US 2014 weather. Dollar & Metals are lower. Crude is a little higher.
About ADMIS Daily Grain Commentary
Marketing Partners Advisory
M.P.A 3/3/14 Position Updates Conference Call Note
3/4/2014 7:13:49 AM
The obvious initial point of discussion Monday afternoon for the weekly conference call of the recommendations group of Marketing Partners Advisory was the development of military activity between the Ukraine and Russia. The commodity, financial, precious metals, and equity markets all responded to the news from the weekend. Some were higher and some were lower in response to the headlines and evolving developments. There is little doubt this will continue to be a primary consideration until such time as the conflict settles down and/or is resolved.
As far as the role of the Ukraine in the grains and oilseed market there are considerations for the global wheat and corn markets, but perhaps not in a volume which is a game changer for global balance sheets. Perhaps the bigger concern relative to the grains and oilseed markets may be the geo-political impact developments in the Ukraine and the surrounding region may have on markets’ (not just grains and oilseeds) perception of stability/instability and the impact this will have on the global economy going forward in an environment of historically large global debt and sustaining problematic economic considerations in many countries.
Other discussion items in our weekly conference call included the following –
1.Monday’s trading volume in the grains and oilseed markets was noticeably larger than experienced in recent weeks and months. We continue to sense investor/fund buying in the grains and oilseed markets as the CRB Index remains firm. We also sense there is some consumptive user pricing taking place in response to the recent price rally and concern the grains and oilseed markets have gotten away from the lower prices at year end in the short term, and in response to the developments in the Ukraine.
2.The wheat, corn, and soybean markets remain above the 20 week price moving averages. This development has now been in place for the past few weeks and is consistent with the price rally in the CRB Index.
3.While not a new development, the issue of cold winter temperatures remains as a primary consideration negatively impacting grain flows from the farm and beyond in the US and Canada. The extended cold temperatures are also prompting market chatter of delays in spring planting for early planted crops in the US. This issue along with the market chatter of winter kill for some areas of US winter wheat production may be the first and second attempts by the trade to suggest adverse developments relative to new crop production potential.
4.We continue to anticipate production projections for SA corn and soybeans may be lowered in coming weeks. We are not mentioning this to suggest the reductions will change the overall tenor of expectations for SA new crop inventories, but rather fine tune projections which will likely continue to suggest historically large new crop production and new crop year inventories.
5.Reward the rally with selling? Producer pricing has been evident in recent days as the corn, soybean, and wheat markets have extended the rally to levels which appear to be prompting producer interest. We too have had additional pricing recommendations realized as the market has rallied and remain comfortable with this strategy.
6.The cattle markets remain overtly strong reinforcing our belief demand for feed grains is benefitting from lower feed grains markets of the past months. We do not view this issue as a skyhook for the feed grain markets but rather a longer term positive development supporting demand growth. Demand growth will likely increase the markets’ sensitivity to production threats in the coming weeks and months.
7.There has been much interest and market chatter of options based grains and oilseed marketing strategies since last fall as producers have come to grips with the concern of marketing inventories in the lower price environment. There is much concern of marketing inventories and projected inventories at current price levels which in some instances meaningfully alter what have been very positive economics of grains and oilseed production. We understand the concern and believe discussion of these strategies has merit. A few considerations – Talk with your local ADM grain marketing staff to review your thoughts on these strategies. Know the terms of the trade. Make sure the implementation of the strategy allows you to sleep at night. Engage strategies in a manner which is consistent with your farming business. Producer grain marketing is a different consideration than a pit trader, processor, exporter, or country grain elevator. Take time to review the implications of the terms of the strategies. Many of these strategies dramatically expand the moving parts and timeline of issues which impact the final pricing of your grain inventories. Do not forget what many of us have been told over the years – KISS. A more complex marketing strategy may not be any better than more traditional producer grain marketing strategies.
Best Regards – The Recommendations Group of Marketing Partners Advisory
2013-crop – We are 70% sold at Chicago May 2014 $5.17
Recommendation #9 : sell 10% at Chicago May 2014 $4.85
Recommendation #8: sell 10% at Chicago May 2014 $5.00
2014-crop – We are 30% sold at Chicago December 2014 $5.24
Recommendation #4: sell 10% at Chicago December 2014 $5.00
2013-crop –We are 100% sold at Chicago May 2014 13.29
2014-crop – We are 30% sold at Chicago November 2014 $12.17
Recommendation #5: sell 10% at Chicago November 2014 $11.99
Recommendation #3: sell 5% at Chicago November 2014 $12.55
Recommendation #4: sell 5% at Chicago November 2014 $12.95
SRW – We are 100% sold at Chicago December 2013 $7.77
HRW – We are 90% sold at Kansas City May 2014 $7.96
Recommendation #8: sell 10% at Kansas City May 2014 $8.00
HRS – We are 100% sold at Minneapolis March 2014 $7.20
SRW – We are 30% sold at Chicago July 2014 $7.39
Recommendation #2: sell 10% at Chicago July 2014 $6.60
Recommendation #4: sell 10% at Chicago July 2014 $7.00
HRW – We are 35% sold at Kansas City July 2014 $7.64
Recommendation #4: sell 10% at Kansas City July 2014 $ 7.25
HRS – We are 0% sold
Recommendation #2: sell 10% at Minneapolis December 2014 $7.10
Recommendation #1: sell 10% at Minneapolis December 2014 $8.00
About Marketing Partners Advisory
ADM - Benson Quinn
BQCI Morning Comments
3/7/2014 2:33:01 AM
3/7/2014 10:16:18 AM
Corn traded to new highs in the overnight,
breaching 5 dollars in the May and July contracts
however prices started to fade as the morning pause
neared with corn going into the break off 6-7 cents
from the overnight highs. The corn market was
never able to muster much of comeback spending
the balance of the session trading mixed to low...
3/6/2014 9:24:41 AM
It was a sharply higher session for the beans as weekly
export sales impressed across the complex. It was a contract high
close for the May and July futures while November rallied to fresh 5
½-month high on the coattails of the firmer old crop contracts. US
producer selling was light if at all in the old while the SA producer
Hard Red Spring Wheat
3/7/2014 10:32:53 AM
Wheat kicked it into high gear again today, trading higher
independently of the grain complex. MWK finished +9 ¾, with
KWK and WK both +8. Today’s trade featured more short
covering from the specs, as well as an announcement from the
Canadian Government about the rail quagmire.
The market seemed to build on yesterday’s new highs fo...
About ADM - Benson Quinn
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03/09/14 04:31 AM GMT
* Futures composite price shown, delayed at least 10 minutes.
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