Global Ag News for Dec 3


Overnight trade has SRW Wheat down roughly 1 cent, HRW up 1; HRS Wheat up 1, Corn is up 1 cent; Soybeans up 6;  Soymeal up $1.00, and Soyoil up 50 points.

Chinese Ag futures (January) settled down 41 yuan in soybeans, down 7 in Corn, down 44 in Soymeal, up 54 in Soyoil, and down 62 in Palm Oil.

Malaysian palm oil prices were up 13 ringgit at 3,329 (basis February) supported further by lower stockpile talk.

South America Weather Forecast: Showers  and thunderstorms look to impact much of the Brazilian growing regions over the next 5 days with moderate to good rainfall amounts and up to 90% coverage. Temps hover around average. Dry weather looks to dominate Argentine growing regions over the 5 days with the GFS model having rainfall retuning in the 6 to day period while the European model turned dry. Temps hover around average.

The player sheet had funds net buyers of 10,000 contracts of SRW Wheat; bought 12,000 Corn; sold 8,000 Soybeans; net sold 3,000 lots of Soymeal, and; net sold 1,000 lots of Soyoil.

We estimate Managed Money net long 1,000 contracts of SRW Wheat; long 258,000 Corn; net long 172,000 Soybeans; net long 61,000 lo10ts of Soymeal, and; long 99,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures down roughly 4,800 contracts; HRW Wheat down 3,400; Corn down 3,400; Soybeans up 10,900 contracts; Soymeal down 2,200 lots, and; Soyoil down 980.

Deliveries were ZERO Soymeal; 100 Soyoil; ZERO Corn; ZERO HRW Wheat; 2 Oats; 54 SRW Wheat, and; 1 HRS Wheat.

There were changes in registrations (Oats down 112; Soyoil down 1; HRS down 55)–Registrations total 209 contracts for SRW Wheat; 128 Oats; Corn 1; Soybeans 175; Soyoil 1,591 lots; Soymeal 193; Rice 313; HRW Wheat 113, and; HRS 1,140.

U.S. ethanol production for the week was 974,000 barrels per day, down 1.6% on the week and down 8.1% from a year ago. Stocks totaled 21.2 mil barrels; up 1.79% versus last week and up 2.9% versus a year ago.  Corn use was 98.4 mil bu versus 100.0 mil a year ago and versus the 97.4 mil needed to meet USDA projections.

Wire story reports the second half of November featured the most successful weeks for U.S. fuel ethanol production since the coronavirus pandemic hit earlier this year, but demand trended the wrong way during that period, leading to a large boost in inventory. Further, travel during U.S. Thanksgiving week, usually the busiest travel week of the year, was lackluster as motor gasoline demand lost ground versus prior years.

Accumulated soybean exports reach 5-year high in the U.S. and may remain strong in December – Refinitiv Commodities Research.

As expected, U.S. soybean exports declined in November. As of 26 November, the U.S. shipped 8.9 million tons of soybeans. Total soybean shipments in November will likely be less than 10 million tons, compared to 11.2 million tons for October. But the export pace is still at high levels and will remain relatively strong in December. Accumulated soybean exports during September-November totaled 26.7 million tons, the highest volume during this time over the past five years. To reach USDA’s latest projection (in November) of 2020/21 soybean exports (59.87 million tons), the U.S. needs to deliver another 30.7 million tons of soybeans during December-August, compared to 31.3 million tons for the 5-year average. So far U.S. exports to China totaled 19.4 million tons, compared to 6.8 million tons for last year’s same period. According to USDA’s export sales data, outstanding sales to China were 11.5 million tons as of 19 November. As such, exports to China will likely remain strong at least in December. With the consideration of recent shrinking sales to China and high prices, exports may return to normal after December.

Global food prices jumped in November and hit their highest level in six years, the United Nations’ Food and Agriculture Organization said Thursday. The FAO’s Food Price Index, which tracks prices of the most common food commodities, rose 3.9% month on month to 105.0 points, its highest level since 2014. The monthly increase was the sharpest since July 2012. The increase was driven largely by a sharp jump in vegetable oil prices. A sub-index tracking vegetable oil prices rose 14.5% in November, led by palm oil prices, the FAO said. All foodstuffs tracked by the organization saw increase. Cereals rose 2.5%, sugar prices gained 3.3% and dairy and meat prices each rose 0.9%.

The U.S. Agriculture Department raised its forecast for farmers’ yearly profits on Wednesday, reflecting an increase in government aid due to the market impact of COVID-19 as well as higher prices for crops and livestock. USDA’s Economic Research Service projected that net cash income, which calculates the amount of money a farmer gets to keep after expenses, would rise to a seven-year high of $134.1 billion in 2020. If realized, that would be up 22.6% from 2019. The improving outlook means farmers have more cash to spend, a boost for equipment makers like Deere & Co. But the forecast also shows U.S. farmers remained highly dependent on government aid even as crop prices rebounded in the second half of 2020 when China resumed buying U.S. crops after a U.S.-China trade war.

Argentina announced a measure on Wednesday to support the local peso currency by strengthening its rule that grains exporters sell the foreign currency they get from sales of soybeans, soy byproducts, wheat, corn and other agricultural commodities. Exporters have only 15 days to convert export dollars into pesos. To enforce that rule, the government says it will be enforced by temporarily banning companies that do not comply with it from being allowed to continue to export.

Recent precipitation over key producing areas of the northern Pampas replenishes soil moisture and fractionally raises 2020/21 Argentina soybean production to 48.6 [42.9–53.7] million tons. Our current estimate puts planted area at 17.8 million hectares, above 17.2-17.3 million hectares reported by Bolsa de Comercio in Buenos Aires and Bolsa de Comercio in Rosario. Plantings are nationally 43% complete according to the Ministry of Agriculture and 39% complete according to Bolsa de Cereales de Buenos Aires, slightly behind last year’s 44% and the 5-year average of 47%, but largely remain on schedule.

European wheat was firm on Wednesday after falling to a 4-week low in the previous session, but the trend was hesitant between poor crop news from Russia, higher supplies expected in Australia and the new rally of the euro seen hampering exports. Benchmark December milling wheat was up 0.2% to 210.00 euros a tonne. By the same time, most active wheat on the Chicago Board of Trade (CBOT) was up 2.2% at $5.90-1/4 after suffering losses in the previous two sessions that dragged the market to its lowest in two months on a lack of demand for U.S. cargoes and an improving global supply situation. “The upward revision of the Australian crop that pressures on one side but on the other you have sowings in poor condition in Russia. Add to that the euro at 2-1/2 year high, it is difficult to have a clear sense of what to expect next.

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.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now