Global Ag News for Nov 6
TODAY—COMMITMENT OF TRADERS
Overnight trade has SRW Wheat up roughly 2 cents, HRW up 3; HRS Wheat up 1, Corn is up 1 cent; Soybeans up 2; Soymeal up $1.50, and Soyoil down 20 points.
For the week, SRW Wheat prices are up roughly 13 cents; HRW up 25; HRS up 10; Corn is up 12 cents; Soybeans up 49; Soymeal up $13.00, and; Soyoil up 155 points. Crushing margins are down 4 cents at $1.25; Oil share is unchanged at 31%.
Chinese Ag futures (January) settled up 32 yuan in soybeans, down 4 in Corn, up 7 in Soymeal, up 116 in Soyoil, and up 106 in Palm Oil.
Malaysian palm oil prices were down 33 ringgit at 3,175 (basis January) on position evening after a strong week of gains.
South America Weather Forecast: The Brazilian growing regions still not much of a changed with hit and miss moderate rainfall amounts over the next 6 to 10 days with coverage up to 85%. Temps will run near average over the next 6 to 10 days. The Argentine growing regions continues with limited rainfall over the next 6 to 10 days with rains to develop in all areas but the northern half of the region by the end of next week bringing moderate amounts of rainfall. Temps will run near average with some above average readings as we head through next week.
U.S. Weather Forecast: The 6 to 10 day forecast after a system moving through over the weekend in eastern parts of the Southern Plains and for northern sections of the Midwest turns quiet midweek before another system arrives by the end of next week. This looks to bring light snow and showers for the Midwest and eastern sections of the Southern Plains. Temps cool down to average in both regions by the middle of next week.
The player sheet had funds net buyers of 3,000 contracts of SRW Wheat; bought 14,000 Corn; bought 16,000 Soybeans; bought 2,000 Soymeal, and; net bought 7,000 Soyoil.
We estimate Managed Money net long 42,000 contracts of SRW Wheat; long 245,000 Corn; net long 244,000 Soybeans; net long 88,000 lots of Soymeal, and; long 100,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 215 contracts; HRW Wheat down 1,500; Corn up 16,200; Soybeans up 325 contracts; Soymeal up 1,200 lots, and; Soyoil up 5,000.
Deliveries were ZERO contracts for Soybeans.
There were changes in registrations (Soybeans down 150; Soyoil down 72; Rice up 135)—Registrations total 109 contracts for SRW Wheat; ZERO Oats; Corn 1; Soybeans 297; Soyoil 1,808 lots; Soymeal 193; Rice 417; HRW Wheat 113, and; HRS 1,195.
Tender Activity—Egypt bought 300,000t Russian wheat—Pakistan bought 320,000t optional-origin wheat—
For the week ended October 29th, U.S. All Wheat sales are running 12% ahead of a year ago, shipments up 2% with the USDA forecasting a 1% increase on the year
For the week ended October 29th, U.S. Corn sales are running 179% ahead of a year ago, shipments 74% ahead with the USDA forecasting a 31% increase
For the week ended October 29th U.S. Soybean sales are running 132% ahead of a year ago, shipments up 78% with the USDA forecasting a 31% increase on the year
Wire story reports U.S. soy sales to China this month have cooled from their previously hot pace, raising the question of whether China is simply taking a breather from the U.S. market, or if most of the intended volume has already been purchased and buyers are awaiting Brazil’s new supply; China’s appetite for U.S. soybeans has surged in recent months, helping overall U.S. farm trade to the Asian country set new records for the time of year; it has also moved Beijing closer to fulfilling the heavy purchase targets outlined in the Phase 1 trade deal.
The Trump administration asked the U.S. Supreme Court this week for an extension to respond to a petition from oil refiners requesting that the court review a decision that cast doubt on a program exempting refiners from biofuel blending obligations; the government’s request would push their response deadline to Dec. 14 from Nov. 12; the request comes as the Trump administration has delayed a slew of decisions related to U.S. biofuel laws, choosing to wait until after the U.S. presidential election to decide on politically sensitive matters.
September exports of U.S. pork increased 10% year-over-year, keeping 2020 exports on a record pace, according to data released by USDA and compiled by the U.S. Meat Export Federation; Beef exports were fairly steady with last year in major Asian markets but trended lower overall; Pork exports reached 222,475 metric tons in September, with value increasing 6% to $563.2 million; through the first three quarters of the year, pork exports were 16% ahead of last year’s record pace in both volume (2.22 million mt) and value ($5.69 billion); the increases were even stronger for pork muscle cuts, jumping 22% to 1.87 million mt valued at $4.93 billion (up 19%).
An attache report from the U.S. Department of Agriculture’s Foreign Agricultural Service post in Beijing estimated China’s corn imports in the 2020/21 marketing year at 22 million tons, well above the USDA’s official forecast of 7 million tons; the attache’s report, dated Nov. 4 and released on Thursday, attributed the higher corn import figure to “depleted stocks and high domestic prices.”; China routinely sets an annual tariff-rate quota (TRQ) of 7.2 million tons for corn imports, as it did in September. But China’s government is expected to issue more import quotas and buy millions of tons of additional corn in the new crop marketing year, industry sources have told Reuters, amid a surge in animal feed demand and tight domestic supplies; the USDA attache’s report cited “several sources” saying that China’s 7.2 million-ton quota has been filled, “and that China has quietly issued an additional 5 MMT (million metric ton) TRQ to be used through December.”
Brazil’s Agriculture Ministry has issued a regulation facilitating imports of genetically modified (GMO) soybean from the United States; the statement sent late on Thursday said the regulation conferred legal security to imports of grains from the United states “by recognizing the equivalence of genetically modified events approved in the United States and in Brazil.”
Recent rains in Argentina gave a boost to the start of soybean planting for the 2020/21 cycle, the Buenos Aires Grains Exchange said, with a forecast of 17.2 million hectares of planting area for the season; the planting area is expected to exceed last season by 100,000 hectares; the exchange, however, expects a smaller harvest of 46.5 million tons compared to 49 million in the 2019/20 season due to previous drier conditions caused by a weak La Niña weather system.
The recent rains also allowed corn planting to resume where it had been too dry previously, the exchange said; farmers have planted 30.9% of the 6.3 million hectares planned for the current corn season; the exchange has also held steady its harvest projection for wheat at 16.8 million tons
Ukraine is likely to harvest between 26 and 33 million tons of corn this year compared with 35.9 million tons in 2019; severe drought in summer has reduced the harvested area and corn yield sharply; the Ukrainian economy ministry and APK-Inform agriculture consultancy are showing the highest crop outlook of around 33 million tons, while traders see the output at a maximum 28 million tons.
French farmers had sown 76% of the expected soft wheat area for next year’s harvest by Nov. 2, compared with 66% a week earlier, farm office FranceAgriMer said; soft wheat sowing remained both ahead of the pace last year, when 63% of the area had been sown by the same week, and in line with the average rate of the past five years; soft wheat crops had now emerged on an estimated 48% of the expected area, up from 22% a week earlier and 36% a year ago
Euronext wheat rose on Thursday to its highest in nearly two weeks as the latest import tenders added to brisk overseas demand, while adverse weather continued to create concern over global grain supply; front-month December milling wheat was up 2.00 euros, or 1.0%, at 208.75 euros ($246.41) a ton; it earlier rose to 210.75 euros, its highest since Oct. 23.
Front-month February rapeseed added as much as 1.6% to a new life-of-contract high of 402.50 euros; this was also the first time since February that a spot price had reached the 400 euro mark; doubts about soybean harvest prospects in South America and palm oil production in Malaysia, plus strong Chinese demand have buoyed oilseed prices.
France is putting part of the country on high alert for bird flu after cases of the disease were reported in Western Europe since last month, the government announced; around half of France’s administrative departments will be classed as high risk, while the rest of the country will be on medium alert.
Prices of Australian wheat offered in Asia slid this week below Black Sea values for the first time in at least four years, with the country forecast to harvest a near-record crop; for January shipment, Australia Premium White (APW) wheat is being quoted at $275 a ton, including cost and freight (C&F), to Southeast Asia, compared with a similar quality of Black Sea wheat at $285 a ton; IKON Commodities is estimating Australia’s 2020/21 wheat crop at 32 million tons.
Australia says it is closely monitoring trade flows to China amid “deeply troubling” reports from industry that Chinese buyers have been told not to purchase seven categories of Australian products and commodities from Friday; Australian media have reported that Chinese importers had been informally warned by Chinese customs officials that Australian wine, copper ore, barley, coal, sugar, timber and lobster will be targeted for increased inspections from Nov. 6.
Palm oil exports in Malaysia, the world’s second-largest producer and exporter, are projected to rise by 5.6% in 2020, the government said; higher demand from China, India and the Netherlands, as well as an exemption on export duties on crude palm oil, crude palm kernel oil and refined palm kernel oil, are expected to support exports; Malaysia has exempted the palm products from export taxes from July to December.
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