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Global Ag News 9.16

 TODAY—WEEKLY ETHANOL STATS

Overnight trade has SRW Wheat unchanged, HRW up 1; HRS Wheat up 1, Corn is down 1 cent; Soybeans up 4;  Soymeal up $1.50, and Soyoil up 15 points.

Chinese Ag futures (January) settled down 2 yuan in soybeans, down 3 in Corn, down 44 in Soymeal, unchanged in Soyoil, and up 22 in Palm Oil.

The World Trade Organization ruled on Tuesday that tariffs imposed by the United States on more than $200 billion of Chinese products in 2018 were inconsistent with global trading rules; a three-person panel ruled that Washington had not shown why the tariffs, imposed after an investigation into forced transfer of technology and intellectual property, were a justifiable exception to Washington’s obligations.

U.S. Trade Representative Robert Lighthizer reacted defiantly on Tuesday to a World Trade Organization decision finding punitive U.S. tariffs on Chinese goods in violation of WTO rules, saying that the trade body is “inadequate to stop China’s harmful technology practices.”; Lighthizer said the decision shows that the WTO provides no remedy for China’s “misconduct,” adding: “The United States must be allowed to defend itself against unfair trade practices, and the Trump Administration will not let China use the WTO to take advantage of American workers, businesses, farmers, and ranchers.”

U.S. Weather Forecast: The 6 to 10 day forecast for the Midwest had no major changes as dry weather is seen through the weekend before a front moves in bringing light rainfall mainly for the middle/northern sections of the region early next week. Temps are seen running below average. The 11 to 16 day outlook for the Midwest also has no major changes with below average rainfall and average to above average temps forecasted. Last evening’s GFS model run had a strong upper-level disturbance shown to drop down into the central U.S. and then also stall for a while in the Sep. 25 – 30 period. This led to the significant increases of rainfall in Texas, Oklahoma, Kansas, the Delta, and portions of the Corn Belt within this timeframe.

The player sheet had funds net sellers of 7,000 contracts of SRW Wheat; sold 12,000 Corn; sold 6,000 Soybeans; sold 2,000 Soymeal, and; net sold 2,000 Soyoil.

We estimate Managed Money net long 18,000 contracts of SRW Wheat; long 46,000 Corn; net long 193,000 Soybeans; net long 38,000 lots of Soymeal, and; long 91,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures down roughly 3,700 contracts; HRW Wheat down 2,100; Corn up 3,400; Soybeans up 11,500 contracts; Soymeal down 2,100 lots, and; Soyoil down 905.

There were changes in registrations (SRW Wheat down 6; Soybeans down 1; Soyoil down 194; Rice up 1; HRW down 6)–Registrations total 124 contracts for SRW Wheat; ZERO Oats; Corn 277; Soybeans 12; Soyoil 1,935 lots; Soymeal 300; Rice 4; HRW Wheat 141, and; HRS 1,288.

Tender Activity—Ethiopia seeks 400,000t optional-origin wheat—Egypt seeks optional-origin wheat—Turkey bought 440,000t optional-origin wheat—Taiwan bought 65,000t Brazilian corn—S. Korea passed on 60,000t optional-origin corn—

U.S. soybean crushings dropped by more than expected in August to the lowest level in nine months, according to National Oilseed Processors Association (NOPA) data released; NOPA said its members processed 165.055 million bushels of soybeans last month, the smallest monthly crush since November; it was down from 172.794 million bushels in July and 168.085 million bushels processed in August 2019; analysts, on average, had been expecting the crush to dip to 169.468 million bushels

Soyoil supplies among NOPA members at the end of August declined to a nine-month low of 1.519 billion lbs, from 1.619 billion lbs at the end of July but up from 1.401 billion lbs at the end of August 2019; soyoil stocks were about in line with trade expectations for 1.515 billion lbs

Soymeal exports in August fell to 754,634 tons, from 876,159 tons in July but above the 699,212 tons exported in August 2019

U.S. Democratic presidential nominee Joe Biden late on Tuesday attacked President Donald Trump’s record on ethanol, saying his administration’s recent moves to help the industry were too little, too late and transparently political; Biden said in an exclusive statement to Reuters that the Trump administration’s announcement this week that it would reject requests from oil refiners for retroactive waivers exempting them from biofuel blending laws was not enough to outweigh several years of granting large numbers of such waivers – which biofuel producers say erode demand for their products; lip service 50 days before an election won’t make up for nearly four years of retroactive damage that’s decimated our trade economy and forced ethanol plants to shutter,” Biden’s statement said.

Manitoba crop report: Harvest completion sits at 56%, slightly below the three-year average of 63% at this time; yields range widely for all crops, depending on BMPs, soil compaction and environment; Canola yields tend to be disappointing for farmers, with heat blast and Verticillium wilt suspected as contributing factors; yield losses are expected in later-maturing soybeans, particularly in the Southwest region and west of the escarpment; full impact to be determined at harvest, seemingly top pods most affected.

Wire story reports China’s corn crop is expected to fall by up to 10 million tons, or nearly 4%, from the latest government estimates after heavy wind and rains toppled crops in major production areas in the northeastern cornbelt; expected production losses have pushed Chinese corn futures to a record high and stoked worries over supply shortages in the world’s second-largest consumer of the grain after it ran down once-mammoth state stockpiles and boosted imports.

Wire story reports soybeans usually account for about half the annual value of U.S. farm exports to China, but pork uncharacteristically joined the oilseed atop the list in the first half of 2020 as the world’s top consumer scrambled to fill its protein deficit following a pork output plunge; China has been rebuilding its hog herd, the world’s largest, since deadly African swine fever (ASF) was first reported in the country two years ago; in the meantime, the United States has helped pad China’s pork needs for over a year now, which also works out well considering the Phase 1 trade agreement; but U.S. pork exports to China have fallen off the previous pace, while at the same time the Asian nation started buying up record amounts of U.S. soybeans and corn, which were in lower demand at the height of the ASF outbreak last year.

China has been active buying US exports, a trend that has continued today with 132,000 metric tons of soybeans being sold there for delivery in 2020/21 marketing year; one factor that may be adding to the demand for US agriculture in China is the rebuilding of hog herds in China decimated by African swine fever; food waste is massive in China, where the culture prides itself in extravagant meals.

China’s pig herd increased 31.3% in August compared with a year ago, while the sow herd was up 37%, said the Ministry of Agriculture and Rural Affairs; the huge increase comes after a major push to rebuild the herd after it was devastated by an epidemic of African swine fever that began in August 2018; China’s pig herd had shrunk by 41% in October 2019, pushing pork prices to a record high, but soon after the ministry stopped releasing monthly data showing year-on-year changes; last month it said the herd had recorded its first growth in more than two years, up 13%, after efforts to restock farms with breeding sows began to take effect.

China should halt the expansion of soybean farms to leave space for strategic crops, including rice, wheat and corn, to ensure adequate domestic food supply in the light of rising tensions with the United States, industry leaders have said; the comments at this year’s China Soybean Industry International Summit Forum marked a turn away from Beijing’s previous push to boost domestic production and cut reliance on American soybean imports amid the trade war; China launched a soybean ­revitalization plan in March last year, encouraging farmers to ­replace crops such as corn with soybeans through state subsidies; but it did little to change the country’s reliance on imported soybeans; the shift to soybean farming has reduced corn supply, a key grain for animal feed, and pushed prices for the cereal grain to a five-year high.

China has suspended imports from an OK Foods poultry plant in Fort Smith, Arkansas, because of coronavirus cases among workers, the USA Poultry & Egg Export Council said

Stable area estimates, persistently strong demand and favorable long-term weather outlooks maintain 2020/21 total Brazil corn production at 107 million tons; total corn area is kept at 19 million hectares, up 5% from last season mostly due to increases in second crop corn area; the estimate is 0.5 million hectares below USDA’s World Agricultural Outlook Board (WAOB) estimate released in September, which assumes total corn sowings at 19.5 million hectares and national-level yield of 5.64 tons per hectare; Brazil’s agriculture state agency (CONAB) released an initial estimate (25 August) where total corn area was set at 19.4 million acres and production at 112.9 million tons.

Despite recent persistent dryness, favorable long-term weather outlooks and strong demand drivers keep 2020/21 soybean production at 129 million tons, up 6% from last season and on track for a new record; the outlook is 4 million tons below USDA’s World Agricultural Outlook Board (WAOB) estimate released in September, which has sowings at 38.6 million hectares and yield at 3.45 tons per hectare.

Dryness concerns increase for 2020/21 Paraguay early soybean sowings; 2020/21 Paraguay soybean production: 10.1 [9.1–11.1] million tons, unchanged from last update

Due to weather conditions, the start of the harvesting campaign in Russia in 2020 was delayed by 2 weeks; wheat yields in the main producing regions in the South of the country were lower than in previous years; the lack of traditional new harvest pressure at the start of the season and the uneven quality of the first wheat volumes contributed to a sharp jump in purchasing prices at the southern terminals in July; in July 2020, CPT-Novorossiysk prices increased by 10.5% MoM compared to 3% growth in July last year.

Weather conditions for winter grain sowing in Ukraine are the worst in the last 10 years due to severe drought across most of the country, the APK-Inform consultancy weather forecasters as saying; Ukraine, among the leading global grain growers and exporters, is likely to reduce its grain harvest to around 68 million tons this year from a record 75 million tons in 2019 due to poor weather.

Ukraine’s sunflower oil producers’ association said on Wednesday it had revised down its outlook for the 2020 sunflower seed crop to 14-15 million tons from the previous estimate of 15 million because of poor weather; Ukraine’s economy ministry said this month that drought across the country would cut the sunseed harvest to 14 million tons in 2020 from 15.3 million tons in 2019.

European wheat futures fell on Tuesday to near two-week lows, pressured by a pullback in U.S. and Russian prices and slack demand in France; benchmark December milling wheat unofficially closed down 1.75 euros or 0.9% at 187.00 euros ($221.50) a ton, after earlier touching its lowest since Sept. 2 at 186.50 euros; a retreat from last week’s 3-1/2 month high of 191 euros accelerated as Chicago futures fell and the Euronext benchmark breached resistance at 188.50 euros.

A further five cases of African swine fever (ASF) have been initially found in wild boars in the eastern German state of Brandenburg, the state government said.

Forecasts of heavy rains across key central and western growing regions of India have stoked fears of potential crop losses in the second half of September, farm experts and industry officials said; last week, the state-run weather office said the monsoon, which turned patchy in the first week of September, will pick up in most parts of India, with rains expected in some of the key farm belts.

Exports of Malaysian palm oil products for Sep. 1-15 rose 12.2 percent to 745,565 tonnes from 664,392 tonnes shipped during Aug. 1-15, cargo surveyor Societe Generale de Surveillance said.

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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