Written Commentary
TODAY—WEEKLY ETHANOL STATS
US ethanol inventories are expected to keep growing, says Terry Reilly of Futures International; Reilly estimates that inventories may rise another 100,000 to 200,000 barrels–which could put inventories at over 21M barrels for the first time since mid-June; for grain traders, this continued uptick in inventories may suggest that ethanol demand will stay weak, with lingering coronavirus issues limiting the amount of gasoline consumption among US consumers; production of ethanol is expected to grow however, by 5,000 barrels per day.
U.S. renewable fuel credits traded at their highest since March 2018 on Wednesday after a Reuters report said the Trump administration plans to deny oil refiner requests for retroactive waivers from U.S. biofuel laws; Renewable fuel (D6) credits for 2020 traded at 55 cents each on Wednesday, up almost 18% from the previous session
The Brazilian government is planning to extend a tariff-free ethanol import program for three months, a measure likely to please U.S. President Donald Trump’s administration; Brazil allowed a non-tariff quota for imports of 750 million liters per year of ethanol to expire at the end of August, resulting in U.S. producers’ having to pay a 20% tariff.
Overnight trade has SRW Wheat up roughly 4 cents, HRW up 5; HRS Wheat up 1, Corn is up 1 cent; Soybeans down 3; Soymeal down $1.00, and Soyoil down 5 points.
Chinese Ag futures (January) settled down 5 yuan in soybeans, up 23 in Corn, up 25 in Soymeal, down 38 in Soyoil, and down 38 in Palm Oil.
Malaysian palm oil prices were up 7 ringgit at 2,821 (basis November) at midsession with expectations of rising production limiting gains.
U.S. Weather Forecast: The 6 to 10 day forecast for the Midwest looks to be fairly quiet during this time period. Any rainfall would be light and favor the eastern Midwest. Temps are seen below average in the northwest half of the Midwest and above average temps in the southeast. The 11 to 16 day outlook for the Midwest has below average precip in most of the Plains and Midwest. Temps will run average to below in the Midwest and average in the Plains.
The player sheet had funds net even in SRW Wheat; sold 5,000 Corn; bought 6,000 Soybeans; net bought 3,000 lots of Soymeal, and; sold 2,000 Soyoil.
We estimate Managed Money net long 12,000 contracts of SRW Wheat; long 24,000 Corn; net long 188,000 Soybeans; net long 24,000 lots of Soymeal, and; long 81,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 00 contracts; HRW Wheat up 2,200; Corn up 210; Soybeans up 13,200 contracts; Soymeal up 2,900 lots, and; Soyoil down 2,400.
Deliveries were 30 Soymeal; 1 Soyoil; ZERO Rice; 2 Corn; ZERO HRW Wheat; ZERO Oats; 1 Soybean; 9 SRW Wheat, and; ZERO HRS Wheat.
There were changes in registrations (Soymeal down 37; HRS Wheat down 63)—Registrations total 95 contracts for SRW Wheat; ZERO Oats; Corn 220; Soybeans 23; Soyoil 2,431 lots; Soymeal 312; Rice ZERO; HRW Wheat 147, and; HRS 1,288.
Tender Activity—Saudi Arabia seeks 715,000t optional-origin wheat—Tunisia seeks 42,000t optional-origin milling wheat and 25,000t of durum—Pakistan bought 60,000t optional-origin wheat—
Camex, the section of Brazil’s Economy Ministry overseeing foreign trade, eliminated import taxes on rice through Dec. 31 amid a significant increase in domestic rice prices; the tariff exemption will only apply to the first 400,000 tons to be imported.
Argentina’s soybean harvest for the 2020-21 campaign is forecast to be around 50 million tons, the Rosario grains exchange said, the first indication of the potential size of the grain-producing country’s main cash crop; Argentina will likely increase its area for soybean planting around 0.6% versus a year earlier to some 17.3 million hectares; Argentina’s 2019-20 soybean harvest was 50.7 million tons.
Russia has harvested 109.4 million tons of grain before drying and cleaning from 76% of the area with an average yield of 3.00 tons per hectare, data from the agriculture ministry showed.
Russian exports of wheat increased to 15.0 million tons in the first seven months of 2020 from 13.6 million tons a year ago, official customs data showed.
Dry weather in Ukraine has delayed the sowing of winter grains for the 2021 crop in one of the top Black Sea grain exporters, while neighbor Russia also needs rain, although sowing there is running ahead of the last year’s pace; the situation is reminiscent of last autumn, when farmers in Ukraine and Russia sowed winter grains in dry soil; favorable winter weather then improved moisture reserves.
Ukraine, the world’s largest sunflower oil exporter, increased its sunoil exports by around 10% in the 2019/20 September-August season to 6.68 million tons, the national sunoil producers association said; the association said in a report the country also exported 335,000 tons of soybean oil and 184,000 tons of rapeseed oil.
The Czech Republic’s 2020 grain harvest was seen at 7.35 million tons in August, 4.8% higher than last year’s final volume, statistics office data showed; in 2019, the grain harvest totaled 7.02 million tons.
Malaysian palm oil August end-stocks rise less than expected.
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