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Global Ag News For Mar 15


Expanded speculative position limits for agricultural futures scheduled to go into effect on Monday could eventually add to market volatility as commodity funds are allowed to build larger bets on market direction, analysts said.

Overnight trade has SRW Wheat down roughly 2 cents, HRW down 4; HRS Wheat down 1, Corn is down 5 cents; Soybeans down 8; Soymeal down $3.00, and Soyoil up 10 points.

For the week, SRW Wheat prices were down roughly 15 cents; HRW down 23; HRS down 10; Corn was down 6 cents; Soybeans down 11 cents; Soymeal down $16.00, and; Soyoil up 305 points. Crushing margins were up 10 cents at $0.70 (July); Oil share up 3% at 40%.

Chinese Ag futures (May) settled down 109 yuan in soybeans, down 2 in Corn, down 13 in Soymeal, unchanged in Soyoil, and down 4 in Palm Oil.

Malaysian palm oil prices were up 21 ringgit at 4,146 (basis May) at midsession lifted by a jump in crude, rival vegoil prices.

Argentina will reduce crop stress that has reached its most intense level since late December and early January over this past week in some areas. The relief should be sufficient to stop the decline in crop conditions. Some of that relief will begin with rain early this week and follow up rain will occur during the weekend followed by milder temperatures to help conserve soil moisture. The implications of this is that once dryness relief occurs early this week there is not likely to be another period of such significant stress on crops during the balance of this month and probably for the balance of the growing season.

Brazil remains mostly good for late season crops that are in the ground, but frustratingly slow field progress will continue in unharvested soybean and unplanted corn progress. Concern remains over the long term outlook for corn production as confidence is high that monsoonal rainfall will end normally this year which could harm yields in the late planted crop.

The bottom line for the United States remains one of improved soil moisture in many key winter crop areas in Nebraska, Kansas and Colorado that were very short of moisture prior to the weekend. Good planting progress occurred in the southern states for early season corn, rice and sorghum (Texas mostly). Dryness worries remain in the northern Plains, southwestern Plains and far south Texas where more rain must fall soon. Midwest soil moisture will be favorably moist going into April supporting a good potential start to the planting season.

The player sheet had funds net sellers of 4,000 contracts of SRW Wheat; sold 2,000 Corn; were net even in Soybeans; sold 3,000 lots of Soymeal, and; net bought 5,000 Soyoil.

We estimate Managed Money net long 15,000 contracts of SRW Wheat; long 351,000 Corn; net long 150,000 Soybeans; net long 52,000 lots of Soymeal, and; long 109,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures up roughly 660 contracts; HRW Wheat up 315; Corn down 1,200; Soybeans up 950 contracts; Soymeal up 355 lots, and; Soyoil down 170.

Deliveries were 155 Soymeal; ZERO Soyoil; 17 Rice; ZERO Corn; 20 HRW Wheat; ZERO Oats; 3 Soybeans; 7 SRW Wheat, and; ZERO HRS Wheat.

There were no changes in registrations—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—Taiwan seeks 65,000t optional-origin corn—Iran seeks 30,000t optional-origin soyoil, 30,000t sunoil, 30,000t palm oil—

Nearby Chicago corn futures have been stuck in a range for nearly two months after their historic rally that began in August, and speculators continue to cling to their hugely bullish bets, anticipating key supply data from the U.S. government at the end of the month. The U.S. Department of Agriculture on March 9 published its monthly supply and demand report and left domestic balance sheets for corn and soybeans unchanged from the previous month. That added to the overall stagnant mood of the market, but USDA’s March 31 U.S. grain stocks and planting intentions data is expected to make bigger waves.

U.S. soybean processing plants likely notched their busiest February ever last month, with strong demand for soymeal and soy-based biofuels fueling a fast crushing pace, according to analysts polled ahead of a National Oilseed Processors Association (NOPA) report due on Monday.

NOPA members were estimated to have crushed 168.61 million bushels of soybeans during February. A month ago, NOPA reported a crush of 184.654 million bushels. In February 2020, the NOPA crush was 166.288 million bushels, the biggest February crush on record. February crush estimates ranged from 158.828 million to 175.3 million bushels

The monthly NOPA report is scheduled for release at 11 a.m. CST (1700 GMT) on Monday.

Soyoil supplies among NOPA members at the end of February were seen rising to 1.839 billion pounds compared with 1.799 billion pounds at the end of January and 1.922 billion pounds at the end of February 2020. Estimates ranged from 1.65 billion to 1.932 billion pounds

China sold 2.26 million tonnes of wheat, or 56% of the total offer, at an auction of state reserves last week, the National Grain Trade Center said in a statement on Monday. The volume sold, at an average price of 2,376 yuan ($365.30) per tonne, rose from the prior week on strong demand from manufacturers of animal feed who are using the grain as a replacement for pricey corn.

Prices for Ukrainian-origin barley from this year’s harvest have exceeded those of high quality milling wheat due to strong demand from China, analysts at APK-Inform said. Forward contract prices for 2021 harvest barley stood at $220-$230 a tonne CPT (carriage paid to) Black Sea June-July delivery, while high quality milling wheat was priced at between $218-$227 a tonne with the same delivery date. Such an atypical spread is largely due to the high purchasing activity of China in the barley segment, both old and new crops. The volumes of barley imports by China are simply off scale.

Argentina is set to lose $2.26 billion in export revenue due to the effects of drought on the country’s 2020/21 soybean crop, the Rosario grains exchange said. The exchange on Wednesday cut its soy harvest forecast to 45 million tonnes from a previous 49 million, citing months of high temperatures and scant rainfall on the country’s farm belt. The crushing of soybeans is expected to lose 1.5 million tonnes compared with what had been earlier projected. In its revised forecast, it said the country should export 37.5 million tonnes of processed soy products, including soyoil.

Russia’s March exports of wheat, barley and maize (corn) are estimated at 3.5 million tonnes, down from 4.3 million tonnes in February, the SovEcon agriculture consultancy said.

Around 98% of Ukrainian winter wheat crops and 100% of winter barley were in good condition, according to the latest data of the Ukrainian state weather centre. The regrowth of crops, as sampled by meteorologists on February 20, showed weak and rare seedlings on 2% of winter wheat fields and 7% of winter rape areas.

Ukrainian wheat export prices lost $1-$2 a tonne over the past week after a slight decrease in Russian wheat prices and an expected jump in the 2021 crop, analysts from APK-Inform consultancy said. Asking prices for Ukrainian-origin 12.5% protein wheat stood at $279 to $286 per tonne FOB Black Sea. Lower quality 11.5% wheat was quoted between $277 and $285 per tonne.

APK-Inform said export prices for Ukrainian corn added $2 to $4 a tonne to $262-$270 while barley prices remained stable at $259-$265 FOB Black Sea.

Ukraine’s grain exports have fallen by 23% to 33.4 million tonnes so far this season, which runs from July 2020 to June 2021, economy ministry data showed. Traders sold 13.9 million tonnes of wheat, 14.9 million tonnes of corn and 4 million tonnes of barley. Exporting 13.9 million tonnes of wheat, traders have used more than 79.4% of the total export quota of 17.5 million tonnes imposed for the whole 2020/21 July-June season.

Spring grain sowings are making good progress in Western Europe, particularly in top producers France and Germany, with a drop in planted area expected from last year’s unusually high levels.

In France, 90% of the expected spring barley area had been sown by March 8, well ahead of year-earlier progress of 33%, data from farm office FranceAgriMer showed.

In Germany, spring grain sowings are making good progress in generally favorable weather.

Spring grains sowings in Britain are expected to fall sharply with a survey issued by the Agriculture and Horticulture Development Board pointing to a 30% drop in spring barley area as farmers turning to growing more winter wheat.

In Poland, spring plantings may run slightly later than in previous years as temperatures in the country are still low, dropping below freezing point at night.European wheat prices fell to a three-week low on Friday, dragged down by weakness in Chicago prices as rains were forecast for dry parts of the U.S. Plains. Dealers said the mood on exports in western Europe had also become more bearish after Egypt’s state grain buyer, GASC, rejected offers of French wheat.

There had been hopes that Russia’s 50 euro a tonne export tax would transfer export sales to the west EU, but this looks like being a harder struggle than expected; Russia is not out of the export game yet. The cheapest French offer in the GASC tender on Thursday of $290.97 a tonne FOB was still undercut by Russian FOB offers of $287.00 to $289.90 a tonne which included the 50 euro ($59.6) a tonne export tax. Front month May milling wheat ended 0.6% lower at 223.25 euros a tonne after hitting a three-week low of 223 euros a tonne.

India’s palm oil imports fell 27% in February from a year earlier to their lowest in nine months, a leading trade body said, reflecting a slowdown in domestic demand. India imported 394,495 tonnes of palm oil, down from 540,470 tonnes a year earlier. Soyoil imports fell to 285,973 tonnes from 322,448 tonnes. Overseas purchases of sunflower oil dropped to 116,110 tonnes from 226,743 tonnes.

Exports of Malaysian palm oil products for March 1 – 15 fell 4.4 percent to 507,283 tonnes from 530,545 tonnes shipped during February 1 – 15, 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.

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