Global Ag News For Mar 12
TODAY—LAST TRADING DAY MARCH FUTURES—COMMITMENT OF TRADERS —
Overnight trade has SRW Wheat down roughly 2 cents, HRW up 1; HRS Wheat unchanged, Corn is down 4 cents; Soybeans down 6; Soymeal down $2.50, and Soyoil up 5 points.
For the week, SRW Wheat prices are down roughly 13 cents; HRW down 21; HRS down 10; Corn is down 11 cents; Soybeans down 18 cents; Soymeal down $15.00, and; Soyoil up 235 points. Crushing margins are up 12 cents at $0.72 (July); Oil share up 2% at 39%.
Chinese Ag futures (May) settled up 8 yuan in soybeans, down 17 in Corn, up 10 in Soymeal, up 136 in Soyoil, and up 262 in Palm Oil.
Malaysian palm oil prices were up 66 ringgit at 4,126 (basis May) a 13 year high still supported by tight supplies, rival vegoils.
In Argentina, some improvement in soil moisture is still expected in the next two weeks, especially after this weekend. Rain will be notably greater in the nation Monday through Tuesday; though, the GFS model is still drier in eastern Argentina compared to yesterday’s midday European Model run.
In Brazil, conditions in center west production areas will still be wetter than preferred leading to some additional fieldwork delays. Some timely rain will occur down into Parana next week with enough to raise soil moisture, especially locally; however, net drying will continue farther south in Rio Grande do Sul.
A significant and important precipitation event is still expected tonight through Sunday from the Hard Red Winter Wheat Region into the southwestern Corn Belt and northern Delta. Strong to severe thunderstorms will occur from Texas and Oklahoma into the Delta and southern Missouri. Last evening’s GFS model run was then notably aggressive with a follow-up weather disturbance shown to promote significant precipitation from Kansas through Illinois.
There is an about 60% chance of a transition from La Niña to neutral conditions during the Northern Hemisphere spring 2021, between April and June, a U.S. government weather forecaster said.
The player sheet had funds net sellers of 6,000 contracts of SRW Wheat; bought 15,000 Corn; bought 5,000 Soybeans; sold 2,000 lots of Soymeal, and; net bought 6,000 Soyoil.
We estimate Managed Money net long 17,000 contracts of SRW Wheat; long 351,000 Corn; net long 165,000 Soybeans; net long 52,000 lots of Soymeal, and; long 134,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 3,600 contracts; HRW Wheat down 2,300; Corn down 210; Soybeans down 705 contracts; Soymeal down 1,400 lots, and; Soyoil up 840.
Deliveries were 5 Soymeal; ZERO Soyoil; 18 Rice; ZERO Corn; ZERO HRW Wheat; 4 Oats; 3 Soybeans; 15 SRW Wheat, and; ZERO HRS Wheat.
There were changes in registrations (Rice up 3)—Registrations total 49 contracts for SRW Wheat; 4 Oats; Corn ZERO; Soybeans 60; Soyoil 1,248 lots; Soymeal 175; Rice 1,013; HRW Wheat 1,291, and; HRS 710.
Tender Activity—Egypt bought 360,000t Romanian wheat—S. Korea bought 60,000t optional-origin corn—S. Korea bought 12,000t Chinese soymeal—
For the week ended March 4th: U.S All Wheat sales are up 2%, shipments down 3% with the USDA forecasting a 2% increase. By class, HRW wheat sales down 7%, shipments down 3%, with USDA down 7%. SRW down 24%, shipments down 32% (USDA down 18%). HRS up 3%, shipments down 3% (USDA up 6%). Corn up 112%, shipments up 82% (USDA) up 46%. Soybeans up 76%, shipments up 77% (USDA up 34%). Soymeal up 1%, shipments up 12% (USDA up 1%). Soyoil down 20%, shipments unchanged (USDA down 8%).
China is scooping up supplies of U.S. white wheat to feed livestock, pushing export forecasts for the grain usually used to make sponge cakes and noodles to a 27-year-high. The purchases are the latest disruption in commodities markets caused by Chinese buying of grains and oilseeds during the coronavirus pandemic, pushing prices of major commodity crops to multi-year highs. China has booked more U.S. white wheat this year than any country besides the Philippines, the top buyer of the grain. While U.S. producers have long tried to woo the growing Chinese market for confectionary foods made from white wheat flour, the recent purchases reflect a need for animal feed. While white wheat is not typically fed to animals, high corn prices – benchmark U.S. futures hit 7-1/2-year highs last month – made it a viable alternative in China. Nine months into the 2020/21 wheat marketing year begun June 1, 2020, China’s purchases of all U.S. wheat classes are at a seven-year high of 2.9 million tonnes, according to USDA’s weekly export sales.
Strong prices maintain high 2021/22 U.S. corn production expectations – Refinitiv Commodities Research
U.S. soybean acres still expected to lag behind corn in 2021/22 – Refinitiv Commodities Research
Brazilian crop agency Conab raised its forecasts for soybean and corn production for the 2020-2021 growing season as productivity and the area planted with both crops increased. Brazilian farmers will produce 135.1 million metric tons of soybeans this season, a record, the agency said. In February, the agency forecast a crop of 133.8 million tons. Brazil produced 124.8 million tons of soybeans in 2019-2020.
BRAZIL 2020/2021 TOTAL GRAIN CROP SEEN AT 272.322 MILLION TNS VERSUS 268.343 MILLION TNS IN FEBRUARY FORECAST AND 256.948 MILLION TNS IN 2019/2020 ESTIMATE – CONAB
A shortage of cattle for slaughtering will continue to weigh on Brazilian beef processors for at least a year, an analyst with Safras & Mercado, said. Brazil’s tight supplies, caused by the slaughtering of cows and strong demand for beef in markets like China, has led companies to temporarily halt operations and furlough employees. Brazil’s cattle availability may improve next year, with the trough of the cycle appearing to be over. Brazil will slaughter 31.585 million head of cattle in 2021, up 0.4%. By comparison, cattle slaughtering slumped 9% last year from 2019 to 31.471 million head.
Yield risks arise whenever Brazil’s heavily exported second corn crop is planted late, but this year the delays are the worst in a decade, and the pressure for favorable weather through the next several months is substantially higher than usual.
Argentina is expected to harvest 44 million tonnes of soy and 45 million tonnes of corn this season, the Buenos Aires Grains Exchange said, citing dryness as the reason for cutting its previous 46 million tonne forecasts for both crops.
Most regions of Ukraine will have optimal soil moisture reserves as of early spring, and optimal conditions for the start of spring sowing will come in the second half of March, the state weather forecaster said. The economy ministry has said it expects that the area under all grains could increase to 15.7 million hectares this year, up from 15.2 million hectares in 2020.
European wheat fell to a three-week low on Thursday after Egypt ignored French wheat offers in its latest tender, a new sign that the origin is uncompetitive on international markets. Front month May milling wheat unofficially closed 1.2% lower at 224.75 euros ($269.03) a tonne after hitting a low of 224.25 euros a tonne, a price unseen since Feb. 18. At the same time of the day, most traded wheat on the Chicago Board of Trade was down 1.65% at $6.41-3/4 a bushel, with improving U.S. weather in the Midwest adding pressure.
Egypt has enough strategic wheat reserves for five months following its latest purchase through the General Authority for Supply Commodities (GASC), the supply ministry 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.