Written Commentary
TODAY—WEEKLY EXPORT SALES—US TRADE BALANCE
Overnight trade has SRW Wheat up roughly 1 cent, HRW up 1; HRS Wheat down 1, Corn is down 1 cent; Soybeans up 4; Soymeal up $2.00, and Soyoil up 35 points.
Chinese Ag futures (January) settled down 6 yuan in soybeans, down 7 in Corn, up 1 in Soymeal, up 94 in Soyoil, and up 88 in Palm Oil.
Malaysian palm oil prices were up 62 ringgit at 2,873 (basis November) at midsession tracking strong Chinese vegoil markets.
U.S. Weather Forecast: The 6 to 10 day forecast for the Midwest has mixed ideas from the models. Both have rains across the region Tuesday/Wednesday with the GFS keeping rains in the east through Thursday. The GFS has good rains across eastern IA into northern IL/IN and much of the lower part of MI, some heavy rains are seen for central IL. The European model sees moderate rainfall favoring the western Midwest with light rains elsewhere. Temps will be falling to below average by the weekend and the first half of next week. The 11 to 16 day outlook for the Midwest has average temps and below average precip for the region.
The player sheet had funds net sellers of 6,000 contracts of SRW Wheat; bought 1,000 Corn; bought 7,000 Soybeans; net sold 1,000 lots of Soymeal, and; bought 5,000 Soyoil.
We estimate Managed Money net long 25,000 contracts of SRW Wheat; short 47,000 Corn; net long 159,000 Soybeans; net long 12,000 lots of Soymeal, and; long 75,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 6,900 contracts; HRW Wheat up 1,900; Corn up 6,100; Soybeans up 7,300 contracts; Soymeal up 1,500 lots, and; Soyoil up 7,900.
Deliveries were 86 Soymeal; ZERO Soyoil; ZERO Rice; ZERO Corn; 58 HRW Wheat; ZERO Oats; 12 Soybeans; 11 SRW Wheat, and; ZERO HRS Wheat.
There were changes in registrations (HRW Wheat up 50; HRS Wheat down 36)—Registrations total 95 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 23; Soyoil 2,481 lots; Soymeal 511; Rice ZERO; HRW Wheat 147, and; HRS 1,351.
Tender Activity—Egypt seeks optional-origin wheat—Jordan seeks 120,000t optional-origin wheat—Philippines seek 165,000t optional-origin feed wheat—reports of China buying up to 480,000t U.S. soybeans—
Barchart Releases September U.S. Yield Forecasts for Corn and Soybeans
- Yield Forecast Indexes predict end of season yield at 178.4 bu/ac for corn and 50.5 bu/ac for soybeans in the U.S.
U.S. ethanol production for the week ended August 28th averaged 922,000 barrels per day (down 0.97% versus a week ago, down 8.98% versus a year ago); stocks totaled 20.882 mil barrels (up 2.32% versus a week ago, down 12.26% versus last year); corn use for the week was 92.4 mil bu (93.3 mil last week) and versus the 73.2 mil bu needed to meet USDA projections.
US ethanol inventories are on the rise, the EIA says; for corn traders, the report is bearish, as it indicates that a post-coronavirus recovery to the ethanol industry is on hold; for inventories, this week’s figure is the highest they’ve been since mid-June.
An historical cash infusion into the US farm economy will spare farmers and ranchers from falling income from commodity sales spurred in part by the coronavirus pandemic; cash receipts for farm goods are expected to drop more than 3% this year, led by an 8% decline in receipts for broilers, cattle and calves, hogs and milk; receipts for corn, wheat, cotton, and soybeans are also expected to drop, while receipts for fruits and nuts will rise; but a record $37B in payments from the Trump administration will boost farm income, and push payments to 36% of that income, the highest share in nearly two decades.
Net farm income is projected to top $102.7 billion in 2020, USDA’s Economic Research Service reported; if that carries out, it would be the highest income for farmers since 2014; a main driver of the higher income is a spike in direct government payments to producers.
Despite the pandemic, or because of government response to it, the U.S. farm sector is projected to have stronger income for 2020 than a year ago; the latest projections for U.S. net farm income for 2020 show a nearly 23% increase from 2019 levels due to higher government payments to farmers and lower interest expenses, USDA’s Economic Research Service reported; net farm income, considered a broad measure of profits, is forecast to increase $19 billion in 2020 to reach $102.7 billion; if numbers hold, 2020’s net farm income will mark the first time since 2014 that the sector broke the $100-billion mark, climbing out from 2016’s low of $66.7 billion.
Global food prices rose for a third consecutive month in August, as demand continued to strengthen after the blow of the coronavirus, aided by a weaker dollar, the United Nation’s Food and Agriculture Organization said; the FAO’s monthly food price index–which tracks a basket of the most common foodstuffs such as grains, vegetable oils and meat–rose 2% from July to 96.1 last month; that was its highest level since the early days of the pandemic in February 2020.
China’s piglet prices hit another new high at CNY108.72 a kilogram, which is up 127% on year, says Asia commodity analyst at StoneX; piglet prices remain elevated due to demand, as farms try to restock following a huge cull in pigs due to the African swine fever outbreak in China; live hog prices in China have slowly trended lower since July, but prices are still elevated and only down about 3.9% from the high in mid-July.
Russia is expected to harvest the grain crop of 122.5 million tons this year, the Agriculture Minister said; the forecast is unchanged from the one the ministry provided in July. Russia has harvested 101.3 million tons of grain before drying and cleaning from 67.4% of the area with an average yield of 3.13 tons per hectare, data from the agriculture ministry showed
Ukrainian grain traders union UGA said on Wednesday it saw the country’s 2020 wheat crop at 26.6 million tons while the output of corn could be 35.3 million tons. Ukraine is likely to export 17.5 million tons of wheat, 29 million tons of corn and 4.5 million tons of barley in the 2020/21 season, the union said.
Ukraine’s 2020 grain harvest could fall by 7 million tons due to severe drought across the country, the Prime Minister said; he gave no exact volume of the harvest while the economy ministry earlier this week said the crop could total 68 million tons. Ukraine’s economy ministry this week cut its forecast for the country’s grain output to 68 million tons from the previous estimate of 70 million tons due to drought across most regions.
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