Global Ag News for Feb 3
Overnight trade has SRW Wheat down roughly 6 cents, HRW down 5; HRS Wheat down 5, Corn is down 4 cents; Soybeans down 8; Soymeal down $0.50, and Soyoil down 70 points.
Chinese Ag futures (May) settled down 74 yuan in soybeans, down 3 in Corn, down 62 in Soymeal, down 150 in Soyoil, and down 148 in Palm Oil.
Malaysian palm oil prices were down 162 ringgit at 3,229 (basis April) at midsession on export demand concerns, India import tax hikes.
In Argentina, net drying is expected across much of the region through next Tuesday. Soil moisture is good enough in most of the nation’s production region to prevent much crop stress from developing in week 1 of the outlook; however, the area most at risk for some increase of stress is southeastern La Pampa and southwestern Buenos Aires where soil moisture is lowest. Greater rain will still likely occur in Arg in week 2.
In Brazil, conditions will still be favorable for crops in most of the nation. Significant rain will occur Friday through Tuesday from Mato Grosso through Minas Gerais, Rio de Janeiro, Espirito Santo, and southern Bahia.
The player sheet had funds net sellers of 5,000 SRW Wheat; sold 22,000 Corn; net sold 12,000 Soybeans; sold 2,000 lots of Soymeal, and; net sold 4,000 Soyoil.
We estimate Managed Money net long 5,000 contracts of SRW Wheat; long 386,000 Corn; net long 145,000 Soybeans; net long 69,000 lots of Soymeal, and; long 111,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 4,300 contracts; HRW Wheat down 395; Corn down 6,000; Soybeans down 2,100 contracts; Soymeal down 1,200 lots, and; Soyoil up 4,600.
There were no changes in registrations—Registrations total 49 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 169; Soyoil 1,286 lots; Soymeal 175; Rice 732; HRW Wheat 91, and; HRS 1,023.
Tender Activity—Egypt bought 480,000t Russian, French, Romanian wheat (around $311t with freight) —South Korea bought 60,000t optional soymeal—
The White House wants to tap a pool of funds from the U.S. Department of Agriculture’s Commodity Credit Corporation (CCC) to support on-the-farm efforts to fight climate change, Tom Vilsack, President Joe Biden’s nominee to run the USDA. The Depression-era program of up to $30 billion in annual funding was tapped by the Trump administration to distribute billions of dollars in aid to cover farmers’ lost sales due to trade wars, primarily with China. Now it could help advance a Biden policy priority: combating climate change.
Wire story reports stocks of corn held by Chinese feed makers and other commercial grain users have jumped to multi-year highs in some areas, indicating that heavy corn users remain concerned about crop shortages even in the wake of the recent harvest. China’s industrial corn users have snapped up the grain to feed a fast-recovering hog sector since 2019, propelling local corn prices 50% higher during 2020 and triggering record crop imports, including China’s largest ever U.S. corn deal just last week. Many of the purchases were for immediate use, but buyers also replenished stocks in anticipation of enduring supply tightness. They kept buying even as farmers harvested one of China’s largest ever corn crops estimated at over 260 million tonnes last month. The stockpiling comes after corn production was hit last year by typhoons and as steady government auctions depleted state reserves just as demand from the hog sector recovered from a deadly African swine fever outbreak. Argentine grains exports were disrupted by roadblocks set up by truckers around ports in Buenos Aires province, with the protests expected to move north to the country’s main shipping hub of Rosario, local industry sources said. The pickets by drivers demanding lower taxes, tolls and fuel prices as well as set fee schedules to be paid by farmers for transportation, were set to reach the main agricultural export hub of Rosario at midnight, the truckers said. About 80% of Argentina’s farm exports are shipped from Rosario terminals.
China’s buying spree of French and Canadian barley is spilling into the 2021/22 crop with large forward purchases, due to its major feed grain needs and a prohibitive tariff on Australian barley, traders and analysts said. China has been sweeping up huge volumes of foreign crops to help feed a pig herd being rebuilt after a disease epidemic. In barley, an 80.5% tariff slapped on Australian supplies last year, amid diplomatic tensions with Canberra, has focused demand on other suppliers. A large amount of Canada’s 2021 barley crop has already been booked by Chinese buyers, traders said, with one citing at least one million tonnes. That would be in line with at least one million tonnes of new-crop European barley thought to have been sold so far, traders said.
Argentine grains exports were disrupted by roadblocks set up by truckers around ports in Buenos Aires province, with the protests expected to move north to the country’s main shipping hub of Rosario, local industry sources said. The pickets by drivers demanding lower taxes, tolls and fuel prices as well as set fee schedules to be paid by farmers for transportation, were set to reach the main agricultural export hub of Rosario at midnight, the truckers said. About 80% of Argentina’s farm exports are shipped from Rosario terminals.
Argentina exports of soy products rebounded in January; Brazil soymeal exports remain strong in 2021 – Refinitiv Commodities Research
Euronext front-month wheat futures turned higher on Tuesday after an earlier one-week low as a large sale of French wheat to Egypt boosted export sentiment. March milling wheat settled up 2.50 euros, or 1.1%, at 226.00 euros ($271.52) a tonne. It earlier fell to 222.25 euros, its lowest since Jan. 25, before again holding support around 222 euros. Further-away delivery positions for 2021 crop ended slightly lower. Euronext front-month prices had been retreating from a 7-1/2 year high of 240.25 euros in mid-January in line with a pullback in Chicago wheat.
Indonesia palm oil production drops on persistent adverse weather conditions – Refinitiv Commodities Research.
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.