Global Ag News for Nov 25


Overnight trade has SRW Wheat down roughly 1 cent, HRW down 2; HRS Wheat up 1, Corn is down 2 cents; Soybeans down 1;  Soymeal up $1.50, and Soyoil up 20 points.

Chinese Ag futures settled up 15 yuan in soybeans, down 16 in Corn, down 31 in Soymeal, up 48 in Soyoil, and up 60 in Palm Oil.

Malaysian palm oil prices were at 3,274 (basis February) at midsession.

Beneficial rain will still impact Argentina tonight into next Tuesday which will improve soil moisture and general conditions for summer crop emergence and establishment. In Brazil, the far south will be notably wet through next Tuesday with improvement of soil moisture as well. Net drying will occur north of Santa Catarina, with Mato Grosso do Sul, northwestern Bahia, and western Sao Paulo among the driest parts of the nation and some crop stress will evolve as a result. An increase in at least some erratic shower and thunderstorm activity is likely in week 2 of the outlook in these driest areas of Brazil

The player sheet had funds net buyers of 11,000 contracts of SRW Wheat; sold 10,000 Corn; sold 2,000 Soybeans; net bought 2,000 lots of Soymeal, and; net sold 5,000 lots of Soyoil.

We estimate Managed Money net long 32,000 contracts of SRW Wheat; long 284,000 Corn; net long 230,000 Soybeans; net long 80,000 lots of Soymeal, and; long 109,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures down roughly 2,100 contracts; HRW Wheat down 3,200; Corn down 23,000; Soybeans up 5,400 contracts; Soymeal down 1,600 lots, and; Soyoil down 8,200.

There were changes in registrations (Soyoil down 85 lots)—

Registrations total 109 contracts for SRW Wheat; ZERO Oats; Corn 1; Soybeans 179; Soyoil 1,770 lots; Soymeal 193; Rice 417; HRW Wheat 113, and; HRS 1,195.

Tender Activity—Taiwan bought 82,000t U.S. Wheat—

U.S. farmers expanded seedings of winter wheat this autumn for the first time in eight years as strong demand and dry weather in several producing countries fuels higher prices for the grain, farmers and analysts said; Winter wheat, seeded in the Northern Hemisphere in autumn for harvest in June, is the first cash crop to be planted since an agricultural commodity price rally began in August; the rally is a welcome relief for farmers after four years of global surplus grain stocks that have kept prices low and hobbled the U.S. agricultural economy; tightening grain supplies and demand from China have lit a fire under Chicago Board of Trade corn, soy and wheat futures.

While plantings expanded in Plains states like Kansas, the top U.S. grower of the hard winter wheat needed for bread, the size of the crop ultimately may be limited by dry conditions; but Plains farmers have another option to turn a profit this year; they could tear up the wheat crop and plant sorghum, a drought-tolerant grain planted in the spring that is used as an alternative feedstuff to corn and is seeing strong demand from China.

A coalition of the nation’s largest biofuels and agricultural trade groups filed a motion in the U.S. Court of Appeals in the District of Columbia asking the court to enforce its 2017 decision requiring the U.S. Environmental Protection Agency (EPA) to address its improper waiver of 500 million gallons of biofuel demand in the 2016 renewable volume obligation (RVO).

Chinese imports of U.S. soybeans surged almost three-fold in October on a year-on-year basis, customs data showed on Wednesday, as cargoes booked following a Phase 1 trade deal between the United States and China arrived in the country; they brought in 3.4 million tons of the oilseed from the United States in October, up 196.4% from 1.147 million tons a year ago, data from the General Administration of Customs showed

Chinese buyers look to cancel U.S. soybean orders as processing margins shrink

  • Smaller buyers move to wash out Dec.-Jan. U.S. soybean imports
  • Crush margins for some importers turn negative
  • Slowing Chinese orders drag U.S. basis down by 30% in Nov.

Some Chinese soybean importers and processors are looking to cancel deals signed for U.S. cargoes for December and January shipment, after crushing margins collapsed following a steep rally in Chicago futures

As dryness continues to increase downside yield risk, steady sowing pace tentatively maintain 2020/21 total Brazil corn production at 107 million tons. Total corn area remains at 19 million hectares, still 5% above last season mostly due to increases in second crop corn area, although widespread delays in soybean sowings continue to narrow the potential for a wide planting window in early 2021. The estimate is 0.5 million hectares below USDA’s World Agricultural Outlook Board (WAOB) estimate released in November, which assumes total corn sowings at 19.5 million hectares and national-level yield of 5.64 tons per hectare.

2020/21 BRAZIL SOYBEAN PRODUCTION: 129 [120–135] MILLION TONS, unchanged from last update

With dryness concerns continuing to mount, a still above-average sowing pace tentatively maintains 2020/21 soybean production at 129 million tons. The outlook is 4 million tons below USDA’s World Agricultural Outlook Board (WAOB) estimate released in November, which has sowings at 38.6 million hectares and yield at 3.45 tons per hectare. Brazil’s agriculture state agency (CONAB) in its November outlook raised its area estimate nearly 400 thousand hectares to 38.3 million hectares, fractionally below our estimate, pushing production to just under 135 million tons.

A union representing Argentine oilseed workers said on Tuesday that contract talks with export companies had stalled after days of talks mediated by the government to avoid a strike that could affect the country’s key farm industry.

The Sovecon agriculture consultancy said on Wednesday it had raised its forecast for Russia’s 2020/21 wheat exports by 1.0 million tons to 40.8 million tons due to a higher crop estimate and a high pace of exports; the new forecast is only 100,000 tons below record wheat exports

Russia’s scheduled quotas for grain supplies from the Eurasian Economic Union (EAEU) will not affect Kazakhstan’s grain exports, the Deputy Minister of Agriculture said

Ukraine 2020 grain crop could decrease to 65 million tonnes from a record 75 million tonnes in 2019, the deputy economy minister said

Euronext wheat rose on Tuesday to its highest in almost two weeks, tracking gains in Chicago as an unexpected decline in U.S. crop ratings underscored weather risks and as export activity in Europe remained brisk; March milling wheat settled up 1.50 euros, or 0.7%, at 211.75 euros ($251.33) a ton it earlier reached 212.50 euros, its highest since Nov. 11 when it had set a life-of-contract peak at 212.75 euros.

Exports of Malaysian palm oil products for November 1 – 25 fell 18.7 percent to 1,137,161 tons from 1,398,027 tons shipped during October 1 – 25, cargo surveyor Intertek Testing Services said.

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.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now