Global Ag News Headlines May 15

by ADMIS Research Team

Overnight trade has SRW up roughly 3 cents, HRW up 2; HRS Wheat up 2, Corn is up 1 cent; Soybeans up 2, Soymeal up $0.50, and Soyoil up 20 points.

For the week, SRW Wheat prices are down roughly 16 cents; HRW down 25; HRS down 6; Corn is down 1 cent; Soybeans down 1; Soymeal down $2.00, and; Soyoil down 20 points; Crushing margins are up 4 cents; Oil share unchanged.

Chinese Ag futures (Sep) settled down 98 yuan, down 9 yuan in Corn, unchanged in Soymeal, up 44 in Soyoil, and up 74 in Palm Oil.

Malaysian palm oil prices were up 58 ringgit at 2,089 (basis July) with Malaysia cutting their export duty for June to zero.

U.S. Weather Forecast

Last night’s GFS model run was similar to the midday GFS model of bringing significant rain into Virginia and North Carolina Monday into Wednesday from an upper-level low pressure area that moves out of the Corn Belt. This part of the Southeast is likely to be wetter-biased next week compared to other parts of the region.

Some shower and thunderstorm activity is likely in Alabama, Georgia, and northern Florida Monday and Tuesday; however, it will be more erratic and lighter compared to the area farther north and this part of the region still has potential of becoming too dry in the next two weeks.

South America Weather Forecast

Last night’s GFS model run was similar to the midday GFS model with the significant rain event suggested in far southern and interior southern Brazil, Mato Grosso do Sul, and southwestern Mato Grosso, Brazil Wednesday into Friday of next week.

Black Sea/Europe region

Last night’s GFS model run was wet from the second half of next week into some of the last days of May; the precipitation results in improved soil moisture for many crop areas that have been drier biased in recent weeks; all areas from the Balkan Countries through Ukraine to Russia’s Southern Region get significant rain.

The player sheet had funds net even in SRW Wheat; net sold 8,000 Corn; net sold 1,000 Soybeans; net sold 2,000 lots of Soymeal, and; net bought 2,000 Soyoil.

We estimate Managed Money net short 12,000 contracts of SRW Wheat; net short 191,000 Corn; net long 14,000 Soybeans; net short 14,000 lots of Soymeal, and; net short 8,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures up roughly 2,300 contracts; HRW Wheat down 325; Corn up 2,700; Soybeans up 9,500 contracts; Soymeal up 805 lots, and; Soyoil up 4,500.

Deliveries were 38 Soymeal; 59 Soyoil; ZERO Rice; ZERO Corn; 16 HRW Wheat; ZERO Oats; 68 Soybean, and; 5 SRW.

There were no changes in registrations—Registrations total 16 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 221; Soyoil 3,495 lots; Soymeal 547; Rice 230; HRW Wheat 17, and; HRS Wheat 488 contracts.

TODAY—MONTHLY NOPA CRUSH REPORT—COMMITMENT OF TRADERS— 

Tender Activity—Tunisia bought 67,000t optional-origin wheat—Syria seeks 200,000t optional-origin wheat—Turkey bought 155,000t optional-origin corn—S. Korea feed group seeks 55,000t optional-origin corn—S. Korea bought 50,000t S. American corn, 17,000t soymeal—

For the week ended May 7th, U.S. All Wheat sales are running 3% ahead of a year ago, shipments up 3% with the USDA forecasting a 4% increase on the year

—By class, HRW wheat sales are up 6%, shipments 12% ahead with a USDA forecast of a 12% increase

—SRW sales 27% behind, shipments 22% behind with a 26% decline seen

—HRS sales 10% ahead, shipments up 3% with a 6% increase seen

For the week ended May 7th, U.S. Corn sales are running 18% behind a year ago, shipments 31% behind with the USDA forecasting a 14% decline.

For the week ended May 7th, U.S. Soybean sales are running 11% behind a year ago, shipments 4% ahead with the USDA forecasting a 4% decline on the year

—Soymeal sales 8% behind on the year, shipments down 4% with a 1% decrease forecasted

—Soyoil sales 47% ahead of a year ago, shipments 46% ahead with a 31% increase forecasted

Private analytics firm IEG Vantage on Thursday projected U.S. 2020 corn plantings at 94.160 million acres; the figure is below the U.S. Department of Agriculture’s official corn plantings forecast of 97.0 million acres

The firm projected U.S. 2020 soybean plantings at 85.890 million acres, above the USDA’s forecast of 83.5 million

Wire story reports United States soybean supplies surged above 900 million bushels in 2018 when China shunned U.S. beans at the start of the trade war, setting a new high for domestic soybean stocks; prior to that, discussion of volumes over 600 million bushels was extremely rare

But now, U.S. soybean supply projections for August 2021 are on par with pre-trade war levels and corn stocks have become the eye-popping figure; at 3.318 billion bushels, the U.S. government’s prediction for 2020-21 U.S. corn carryout is by far the highest number printed by the agency in any month in more than three decades

Canadian farmers and agriculture businesses have claimed most of the C$5 billion ($3.55 billion) in extra credit offered by Ottawa to boost their cash flow during the coronavirus pandemic, in less than two months; some 4,800 farmers and businesses have used options to defer payments on loans totaling C$4 billion ($2.84 billion) and established credit lines worth another C$500 million; the Canadian government had said on March 23 that it would boost the lending capacity of Farm Credit Canada (FCC), a government agriculture lender, by C$5 billion.

Saskatchewan crop report

—More farmers were able to get out into the field this week, with many seeding or planning to seed within the next week or two; seeding progress in the province is at 18 per cent, up seven per cent from last week; this is below the five-year average (2015-2019) of 25 per cent; the southwest region is leading the province, with 39 per cent of the crop seeded

China is expected to see a bumper summer grain harvest this year, amid government efforts to keep grain production stable, an official said; the production of summer grain and edible oil will remain at a relatively high level

—U.S. exporters inked their first soybean oil export deal with China in nearly two years this week, the U.S. Agriculture Department said, as Beijing seeks to fulfill its purchase commitments in the Phase 1 trade agreement it signed in January; USDA said private exporters reported the sale of 2 0,000 tons of soyoil for delivery to China in the 2019/20 marketing year; the sale was the first soyoil deal with China since August 2018 and its biggest purchase of U.S. supplies since November 2016; in the 2016/17 marketing year, before the trade war began, U.S. exporters shipped 133,318 tons of soyoil to China

—Amid the souring of U.S. public opinion toward China, and increasingly sharp anti-China rhetoric from Washington, hawks on the other side of the Pacific are raising their voices as well; in recent weeks, Chinese state media and scholars have lashed out at the U.S. and others they accuse of using the coronavirus outbreak as a political weapon against China; the growing tensions come as the U.S. election approaches, with China thrust into the spotlight as the source of the epidemic that has crippled the American economy and eroded President Trump’s approval rating

China appears to be interested in making good on its obligations regarding US agricultural purchases under the Phase One trade agreement; however, one significant factor standing in the way of even bigger US soybeans purchases is the steady weakening seen in the Brazilian real; since the start of the year, the currency’s index has sunk over 32%, to where its trading today at roughly 17 cents per one real; the weakened Brazilian currency is tough to beat; Brazilian soybean exports to China look to exceed 10 million metric tons by May.

Soy harvesting in Argentina is 87.4% complete, the Buenos Aires Grains Exchange said, having advanced 9.2 percentage points over the preceding seven days on its way to a total projected 2019/20 crop of 49.5 million tons

—This season’s corn crop is 40% harvested, it said, maintaining its nationwide projected harvest estimate of 50 million tons

Given the prevailing weather conditions, this year’s grain harvest will be no smaller than the average over the last five years, the head of the Russian Hydrometeorological Research Center said

—Russia has sent a second shipment of wheat to Saudi Arabia after its first export cargo arrived in the Gulf kingdom earlier in May, Saudi state grain buyer SAGO said

Ukraine’s major grain producing region of Odessa has lost around 500,000 hectares of winter crops due to severe drought and its harvest could fall by nearly 70%, a top regional official said; if last year we harvested 3.7 million tons, this year, we will be able to get only 1.2 million tons; Ukraine harvested a record 75 million tons of grain in 2019; the Economy Ministry said last month that the 2020 grain crop could fall sharply to 60 million tons but on Wednesday increased the forecast to 65 million-68 million after rains across most regions.

Ukraine is likely to reduce exports of its key grain commodities in the new 2020/21 July-June season due to a smaller harvest caused by severe drought, agriculture consultancy APK-Inform said

—Wheat exports could fall by 17.5% to 16.5 million tons

—Barley shipments could drop by nearly a quarter to 3.6 million tons

—Ukrainian corn sales could fall by 1.8% to 28 million tons

  • UKRAINE 2020/21 SUNFLOWER OIL EXPORTS COULD DECREASE BY 0.8% TO 6.15 MILLION T – APK-INFORM
  • UKRAINE 2020/21 SOYBEAN EXPORTS TO FALL 7.8% TO 2.35 MILLION T
  • UKRAINE 2020/21 RAPE SEED EXPORTS COULD FALL 6.6% TO 2.7 MILLION T

Black Sea producers back on track for large 2020/21 wheat exports

  • Rains improve crop prospects in Russia and Ukraine
  • Kazakhstan starts active sowing with good moisture reserves
  • Wheat export quotas remain in question for the new season
  • Russia to remain the world’s top wheat exporter -USDA

The condition of French soft wheat and barley crops declined again in the week to May 11, after marking a pause the previous week, farm office FranceAgriMer said in a report

—For soft wheat, 55% of crops were rated good or excellent against 57% a week earlier, and 79% a year earlier

—The condition of barley crops also declined, with winter barley rated 51% good/excellent against 53% the previous week and spring barley rated 62% good/excellent against 64% previously

—Farmers had sown 90% of the expected grain maize area compared with 77% a week earlier

Germany’s winter wheat sown area for the 2020 harvest has been reduced by 7% on the year to about 2.84 million hectares, the national statistics office said

—Farmers had turned to other crops such as rapeseed; German winter rapeseed sowings for the 2020 crop have been expanded by 11.9% on the year to around 953,000 hectares

Malaysia has lowered its export duty on crude palm oil to 0% for June from 4.5% in May, the Malaysian Palm Oil Board said on Friday, citing the national customs department

—Exports of Malaysian palm oil products for May 1 – 15 rose 6.1 percent to 501,000 tons from 472,085 tons shipped during April 1 – 15, cargo surveyor Intertek Testing Services said

—Malaysia’s palm oil exports during the May 1-15 period are estimated up 7.1% on month at 504,928 metric tons, cargo surveyor AmSpec Agri Malaysia said

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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.

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