Global Ag News for Oct 29
TODAY—WEEKLY EXPORT SALES
Overnight trade has SRW Wheat down roughly 7 cents, HRW down 5; HRS Wheat down 3, Corn is down 3 cents; Soybeans down 4; Soymeal down $2.00, and Soyoil down 25 points.
Chinese Ag futures (January) settled up 61 yuan in soybeans, up 4 in Corn, down 42 in Soymeal, down 88 in Soyoil, and down 24 in Palm Oil.
Malaysian palm oil market was closed for holiday.
U.S. Weather Forecast: The 6 to 10 day forecast for the Midwest sees above normal temps with below normal precip. The 8 to 14 day forecast for the Midwest sees normal temps in the west with above normal temps in the east; precip looks to be normal. The Southern Plains through the next 14 days looks to have above normal to normal temps with below normal to normal precip.
South America Weather Forecast: Brazil has no major changes as rainfall is seen in most of the nation at one time or another, but rainfall will be least frequent and least significant in the interior south. Argentina looks to be having drier weather now for about a week.
Europe/Black Sea Region Forecast: Showers will occur periodically throughout Europe with the far west and north seeing the highest frequency of rain and the greatest amounts over the next 10 days to two weeks. Rainfall of 0.30 to 0.80 inch and local totals of 1.00 to 1.50 inches to impact western parts of Russia’s Southern Region and much of Ukraine during the coming week to ten days.
The player sheet had funds net sellers of 6,000 SRW Wheat; sold 52,000 Corn; sold 25,000 Soybeans; sold 6,000 Soymeal, and; net sold 5,000 Soyoil.
We estimate Managed Money net long 34,000 contracts of SRW Wheat; long 193,000 Corn; net long 223,000 Soybeans; net long 87,000 lots of Soymeal, and; long 83,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 2,000 contracts; HRW Wheat up 1,885; Corn up 16,400; Soybeans down 30,900 contracts; Soymeal down 2,480 lots, and; Soyoil down 115.
There were changes in registrations (Soymeal down 27)—Registrations total 109 contracts for SRW Wheat; ZERO Oats; Corn 1; Soybeans 1; Soyoil 1,907 lots; Soymeal 223; Rice ZER0; HRW Wheat 135, and; HRS 1,195.
Tender Activity—Jordan bought 120,000t optional-origin wheat—S. Korea bought 60,000t optional-origin corn—
U.S. ethanol production for the week ended October 23rd averaged 941,000 barrels per day (up 3.07% versus a week ago, down 6.27% versus a year ago); stocks totaled 19.601 mil barrels (down 0.61% versus a week ago, down 7.10% versus last year); corn use for the week was 93.5 mil bu (90.7 mil last week) and versus the 97.8 mil bu needed to meet USDA projections.
Data released by the EIA shows that ethanol inventories in the US are continuing to drop; it’s the lowest US inventories of ethanol have been at since December 2016; meanwhile, weekly production of ethanol inched higher this week
The U.S. Department of Agriculture defended its latest monthly forecast of China’s corn imports, a figure that surprised analysts given that corn sales to China have already outpaced the USDA’s estimate; “Keep in mind that export sales … do get canceled at times,” said the chairman of the USDA’s World Agricultural Outlook Board.
Some market participants have been at odds with several numbers recently published by the U.S. Department of Agriculture and had 2020 been a normal year, it could have been prime for a fairly heated discussion at Wednesday’s data user’s meeting; two topics were of specific interest to users from the start of Wednesday’s meeting: the surprise U.S. quarterly corn stocks adjustment and Chinese corn imports.
—USDA officials have been discussing the unchanged outlook for 2020-21 Chinese corn imports since at least September. China has purchased even more U.S. corn since then, but Beijing has not officially changed its low-tariff quota on corn, and USDA continues to operate under “policy in place” assumptions; however, USDA might be forced to examine its 7 million-ton corn import forecast, since customs data shows some 6.7 million tonnes have already arrived in China between January and September
—The explanation on the U.S. corn stocks debacle was less clear; on Sept. 30, USDA’s National Agricultural Statistics Service (NASS) published the survey-based Sept. 1 U.S. grain stocks, but the agency unexpectedly made a huge revision to the June 1 stocks; NASS officials explained that the need for a June 1 revision was apparent only after the Sept. 1 survey data was collected and analyzed; the implied quarterly disappearance and residual in particular were well out of the typically observed range, so the June figure was adjusted to bring those relationships more in line with history
U.S. winter wheat production unchanged as planting progresses at normal pace despite weather woes – Refinitiv Commodities Research
USDA Broiler/Egg Set-Chicks Placed Report
Broiler-Type Eggs Set in the United States Down 2 Percent
Broiler-Type Chicks Placed in the United States Down 2 Percent
China’s grain market will be significantly tighter in 2021 and import needs for corn, soy and wheat will be higher, Fitch Solutions says; it forecasts China’s soybean imports will rise 7.7% to 106 million metric tons and corn will more than double to roughly 14 million metric tons in 2020-21; Fitch says its forecasts are larger than the USDA’s and it believes the department will likely revise its own import estimates upward significantly, which could lead to lower-than-generally-expected global ending stocks for soy, corn and wheat.
China is opening its market to Tanzania as it seeks to reduce its reliance on the United States and Brazil for supplies of the oilseed; the director of African affairs at China’s foreign ministry said an agreement had been reached on Monday for Tanzania to start exporting soybeans to the country.
Brazil’s SLC Agrícola is poised to harvest a good grain crop despite planting delays in the 2020/2021 cycle driven by a drought earlier in the season, a company executive said; SLC believes it will begin harvesting soybeans between Jan. 10 and Jan. 15, representing a delay of around 10 days in relation to the previous year; delays in the soybean harvest, which will push back cotton and second-corn planting at SLC farms, will be manageable.
Selected highlights from a report issued by a U.S. Department of Agriculture attache in Buenos Aires:
—Post projects wheat production for marketing year (MY) 2020/2021 at 17.4 million tons, 1.6 million tons lower than USDA’s official number, due to dry La Nina weather conditions which could cause losses for a couple more months; local contacts currently project production at between 16.5-18 million tons
—Post forecasts (corn) production in MY 2020/2021 at 48 million tons, 2 million tons lower than USDA on a reduction in area and yield; most contacts and analyst forecast a production range between 47-49 million tons. … Corn exports in MY 2020/2021 are forecast at 33.0 million tons, 1 million tons lower than USDA, based on smaller projected output
The main union for Argentina’s oilseed crushing workers on Wednesday flagged further strike action after a proposed COVID-19 bonus payment fell short of expectations; the labor group, known by its Spanish acronym SOEA, said companies had offered workers a single bonus of about 11,000 pesos ($140.72), far short of the 70,000 pesos demanded by the union
Russia has harvested 132.6 million tons of grain before drying and cleaning from 95% of the area with an average yield of 2.90 tons per hectare, data from the agriculture ministry’s analytical centre published
Farmers have also sown winter grains for next year’s crop on 95% of the planned area, or on 18.3 million hectares, up 0.5 million hectares from Oct. 27, 2019, the analytical centre added.
High demand from importers and limited supply from growers have pushed up prices for Ukrainian corn by $18-$25 a ton over the past several days, the APK-Inform agriculture consultancy said; the consultancy said corn bid prices had risen to $236-$275 a ton by Oct. 28 on a carriage-paid-to (CPT) basis.
European wheat futures hit two-week lows on Wednesday as concern about the economic impact of surging COVID-19 infections sent global markets into the red, and pressured by some welcome rainfall in key producing regions; benchmark December milling wheat was down 1.2% by 1600 GMT at 204.25 euros a ton after touching 202.50 euros a ton, the lowest since Oct. 14.
Croatia’s wheat production rose 2.4% to 809,000 tons in 2020 thanks to higher yields, the country’s statistical office said
—The wheat yield rose to 5.7 tons per harvested hectare by August 15, from 5.6 tons in 2019, the statistical office said in a statement earlier this week; the office said earlier that wheat fields remained unchanged at 142,000 hectares this year
—Croatia’s rapeseed output increased 6.7% to 111,000 tons, as yields per hectare rose to 2.7 tons from 2.5 tons in 2019
South African farmers are expected to plant 5% more hectares of maize in the 2020/21 season, boosted by favorable weather conditions and higher prices, the government’s Crop Estimates Committee (CEC) said; the CEC forecast that 2.746 million hectares of maize will be planted for the 2020/21 season
A leading trade body has urged the Indian government not to reduce import taxes on edible oils as lower prices could hurt local farmers who are trying to boost production; edible oil prices in India, the world’s biggest importer of vegetable oils, have jumped recently, tracking a rally on foreign markets and after the local soybean crop was damaged by excessive rainfall.
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.
© 2024 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.