TODAY—DELIVERABLE STOCKS—FATS AND OILS—GRAIN CRUSHINGS
Overnight trade has SRW Wheat unchanged, HRW up 1 cent; HRS Wheat unchanged, Corn is down 4 cents; Soybeans up 2; Soymeal unchanged, and Soyoil up 30 points.
Chinese Ag futures (January) settled up 25 yuan in soybeans, up 9 in Corn, down 26 in Soymeal, down 10 in Soyoil, and up 24 in Palm Oil.
Malaysian palm oil prices were up 54 ringgit at 2,792 (basis November) at midsession on support from rival oils and, despite weak August export estimates.
U.S. Weather Forecast: The 6 to 10 day forecast for the Midwest has mixed ideas from the models with both seeing a system for later Monday into Wednesday. The GFS has light to moderate rains for southern MN, northeast IA, and southern WI, northern IL, and most of MI. The European model has light to moderate rains for all regions of the Midwest. 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 now has average to above average temps and below average precip for the region.
The player sheet had funds net buyers of 5,000 contracts of SRW Wheat; net even in Corn; bought 2,000 Soybeans; net bought 4,000 lots of Soymeal, and; sold 4,000 Soyoil.
We estimate Managed Money net long 20,000 contracts of SRW Wheat; short 49,000 Corn; net long 151,000 Soybeans; net long 15,000 lots of Soymeal, and; long 69,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 3,500 contracts; HRW Wheat down 2,800; Corn up 11,200; Soybeans up 9,400 contracts; Soymeal down 1,500 lots, and; Soyoil down 3,200.
Deliveries were 83 Soymeal; ZERO Soyoil; ZERO Rice; ZERO Corn; 31 HRW Wheat; ZERO Oats; 2 Soybeans; 11 SRW Wheat, and; 5 HRS Wheat.
There were no changes in registrations—Registrations total contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 23; Soyoil 2,581 lots; Soymeal 511; Rice ZERO; HRW Wheat 47, and; HRS 1,387.
Tender Activity—Japan seeks 106,937t optional-origin wheat—S. Korea passed on 70,000t optional-origin feed wheat—
U.S. Spring Wheat harvested was 69% (trade estimate was 64%) versus 49% last week, 50% a year ago, 77% average.
U.S. Corn dented was 63% versus 44% a week ago; 37% last year, and; 56% average.
U.S. Corn mature was 12% versus 5% a week ago, 5% last year, and 10% average.
Corn was rated 62% good to excellent (trade estimate was 61%) versus 64% last week, and 58% a year ago; 24% fair (24% last week, 29% last year), 14% poor to very poor (12% last week, 13% last year).
In Iowa, the top U.S. corn grower and No. 2 soy producer, the USDA rated 45% of the state’s corn as good to excellent, down from 50% a week earlier and down sharply from 73% at the start of the month.
U.S. Oats harvested was 91% versus 85% a week ago, 81% last year, and 90% average.
U.S. Soybeans dropping leaves was 8% versus 4% a week ago, 3% last year, and 8% average.
U.S. Soybeans were rated 66% good to excellent (trade estimate was 66%) versus 69% a week ago, and 55% a year ago; 24% fair (23% last week, 32% a year ago), and; 10% poor to very poor (8% last week, 13% a year ago).
It was a hot and dry week for the Crop Watch fields in the Western Corn Belt, and the unfavorable finish to August has nicked yield expectations for both corn and soybeans yet again in some of those states; September is expected to start with mostly seasonable temperatures, though the Western Belt is likely to continue the dry trend while eastern areas have better rain chances. Rain could still help later-planted crops, especially soybeans, but farmers would not want things to turn excessively wet, either, just ahead of harvest.
Wire story reports Chicago corn futures uncharacteristically rose throughout August as domestic harvest prospects have been shrinking and China continues to make large U.S. purchases; though when supplies fall, demand almost always follows suit; the U.S. Department of Agriculture has forecast very strong domestic corn use and exports over the next year, which makes sense as the latest outlook includes a record harvest; but after a long stretch of unfavorable weather across the heart of the Corn Belt, most industry participants think a record crop is off the table and that USDA’s next estimate due on Sept. 11 will reflect that.
U.S. biodiesel production fell to 151 million gallons in June from 152 million gallons a month earlier, the U.S. Energy Information Administration said
Ethanol stockpiles are expected to grow this week, which would indicate that gasoline consumption is keeping at a slower pace amidst a lingering coronavirus pandemic in the US; the EIA said last week that ethanol stockpiles were at 20.41 million barrels – up 139,000 barrels from the previous week; stockpiles are projected to grow another 75,000 to 175,000 barrels this week, says Futures International
The U.S. soybean crush is expected to have increased in July after three straight monthly decreases, rising to 5.491 million short tons, or 183.0 million bushels
If realized, it would be up from a crush of 177.2 million bushels in June and would be the biggest July crush on record, eclipsing the previous record of 179.4 million bushels set in July 2019; estimates ranged from 179.2 million bushels to 184.0 million bushels.
The USDA is scheduled to release its monthly fats and oils report at 2 p.m. CDT.
U.S. soyoil stocks at the end of July were seen slipping to 2.131 billion lbs from 2.271 billion lbs at the end of June; soyoil stocks estimates ranged from 2.100 billion to 2.175 billion lbs
Canadian farmers are set to harvest the biggest wheat crop in seven years and slightly less canola, Statistics Canada said on Monday in its first production estimates; Statscan pegged the all-wheat harvest at 35.7 million tons, up from last year’s 32.3 million and slightly exceeding the average trade expectation; bigger wheat production was driven by a 39% jump in durum output.
China’s beef consumption has shown some resilience amid the sluggish economy resulting from Covid-19, Rabobank says; unlike pork and poultry, which had big price drops in 2Q, beef wholesale prices have stayed firmly above 4Q 2019 levels; beef producers have been shifting to selling through retail instead of food service channels as the price gap between beef and pork has narrowed significantly since 4Q 2019; with the further recovery of food service, Rabobank expects beef prices to increase in 2H.
China will auction 4,400 tons of frozen beef and mutton from state reserves on Sept. 3, the China Merchandise Reserve Management Center said; China has also sold more than 500,000 tons of pork from its reserves this year, to plug a huge meat supply gap after African swine fever outbreaks decimated its massive pig herd
China will auction another 20,000 tonnes of frozen pork from its state reserves on Sept. 4, the China Merchandise Reserve Management Center said
Brazil allowed a non-tariff quota for ethanol imports to expire on Monday, which will result in U.S. producers having to pay a 20% tariff unless the Brazilian government takes new action.
“The expiry date was today and nothing was decided, but that does not stop the government taking a decision in the next few days; the tax-free import quota was used entirely by U.S. corn ethanol producers and allowed 750 million liters per year into Brazil, mainly to the northeast of the country.
Ukrainian farms have harvested 38.4 million tons of grain from 63% of the sown area as of Aug. 31, data from Ukraine’s Economy Ministry showed; on Monday, the ministry revised down its forecast for Ukraine’s grain harvest to around 68 million tons from 70 million tons due to severe drought across the country which affects corn output; Ukraine harvested a record 75 million tons of grain in 2019.
Ukraine has exported 7.05 million tons of grain so far in the 2020/21 July-June season compared to 8.76 million tons at the same point of the previous season, the economy ministry said on Monday; the volume is down due to a decline in corn sales to 570,000 from 1.85 million tons by the same date last season; wheat sales stood at 4.46 million tons, down from 4.82 million.
Ukraine’s grain exports are likely to fall by around 16% to 47.4 million tons due to a smaller harvest, economy ministry data showed; that includes 17.5 million tons of wheat, 26 million tons of corn and 3.3 million tons of barley.
Ukrainian sunflower seed harvest is likely to fall to 14 million tons in 2020 from 15.3 million tons in 2019 due to severe drought in most regions
Europe’s wheat crop shows mixed results as harvests near completion; reasonable wheat crops in Germany and Poland; sharp drops expected in France and Britain
In France, the largest European producer, soft wheat harvesting has ended with estimates that the crop will fall about 25% year on year to about 29.5 million tons after autumn rain and a dry spring cut sowings and yields.
Germany’s 2020 crop of all wheat types will fall 5.1% from last year to 21.88 million tons, the agriculture ministry estimates. A fall had been expected after farmers reduced the area sowed.
Poland’s wheat harvest could increase by between 4% and 5% on the year to about 11.7 million to 11.8 million tons, said analysts Sparks Polska.
Soft wheat exports from the European Union and Britain in the 2020/21 season that started on July 1 totaled 2.47 million tons by Aug. 30, official EU data showed; that was 47% below the volume exported by the same week in the previous 2019/20 season
Soybean imports into the European Union and Britain in the 2020/21 season that started on July 1 totaled 2.57 million tons by Aug. 30, official EU data showed; that was 6% above the volume imported by the same week in the previous 2019/20 season
European wheat futures in Paris fell on Monday after hitting a six-week high, with chart resistance and a firm euro curbing support from a rally in U.S. grains; December milling wheat was down 1.00 euro, or 0.5%, at 185.50 euros ($221.78) a ton; it earlier hit 188 euros, its highest since July 17 and above a five-week high of 187 euros struck on Thursday.
Romania’s 2020 maize crop was affected by prolonged drought and could fall to as much as 40% on the year to 10.2 million tons, the agriculture ministry said.
Belarus has harvested 7.7 million tons of grain from 94.4% of the sown area as of Aug. 31, the agriculture ministry said; the yield averaged 3.72 tons per hectare compared with 3.12 tons a year earlier
Croatia is expected to bring in 809,000 tons of wheat in 2020, 2.4% more than a year earlier due to higher yields, the country’s statistical office said on Monday, citing early estimates
Exports of Malaysian palm oil products for August fell 13.1 percent to 1,491,422 tons from 1,716,980 tons shipped during July, cargo surveyor Intertek Testing Services 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.