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Global Ag News For Mar 4


Overnight trade has SRW Wheat down roughly 2 cents, HRW up 1; HRS Wheat up 1, Corn is down 1 cent; Soybeans unchanged; Soymeal down $1.00, and Soyoil up 35 points.

Chinese Ag futures (May) settled up 49 yuan in soybeans, down 17 in Corn, down 26 in Soymeal, up 124 in Soyoil, and up 54 in Palm Oil.

Malaysian palm oil prices were up 47 ringgit at 3,725 (basis May) following rival oils.

Concerns of dryness remain for Argentina. Some erratic showers and thunderstorms will occur in eastern and far northwestern parts of the nation Thursday; however, after this, little to no rain expected through at least to next Wednesday. This will lead to more increase of crop stress. There is still potential for at least some greater rain in the second week of the outlook and last evening’s GFS model run continued to show greater rain in the second week compared to week 1, particularly in northern Argentina.

Conditions in Brazil will be mostly favorable in the next two weeks; though, rain will be enough in some areas to lead to some additional fieldwork delays. Southern Brazil will be particularly wet Thursday, but this part of the nation will then trend drier into next week which will improve conditions for fieldwork.

The player sheet had funds net sellers of 8,000 SRW Wheat; net sold 22,000 contracts of Corn; sold 5,000 Soybeans; sold 2,000 lots of Soymeal, and; net bought 1,000 Soyoil.

We estimate Managed Money net long 19,000 contracts of SRW Wheat; long 331,000 Corn; net long 165,000 Soybeans; net long 65,000 lots of Soymeal, and; long 117,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures down roughly 1,100 contracts; HRW Wheat down 2,600; Corn down 4,700; Soybeans up2,500 contracts; Soymeal down 385 lots, and; Soyoil up 1,500.

Deliveries were ZERO Soymeal; ZERO Soyoil; 62 Rice; ZERO Corn; 289 HRW Wheat; ZERO Oats; ZERO Soybeans; ZERO SRW Wheat, and; ZERO HRS Wheat.

There were changes in registrations—(Oats down 111, Soybeans down 99, Rice up 32, HRW Wheat down 127)—Registrations total 49 contracts for SRW Wheat; 10 Oats; Corn ZERO; Soybeans 70; Soyoil 1,248 lots; Soymeal 175; Rice 1,010; HRW Wheat 1,291, and; HRS 746.

Tender Activity—Jordan passed on 120,000t optional-origin wheat—Algeria bought unspecified amount of optional-origin wheat, seeks 30,000t optional-origin corn—Taiwan bought 100,410t U.S. wheat—S. Korea bought 68,000t optional-origin corn—

World food prices rose for a ninth consecutive month in February, hitting their highest level since July 2014, led by jumps in sugar and vegetable oils. The Food and Agriculture Organization’s food price index averaged 116.0 points last month versus a slightly revised 113.2 in January. The January figure was previously given as 113.3.

FAO also said that worldwide cereal harvests remained on course to hit an annual record in 2020, adding that early indications pointed to a further increase in production this year.

President Joe Biden took office promising to move quickly to restore and repair America’s relations with the rest of the world, but one major nation has yet to see any U.S. effort to improve ties: China.

From Iran to Russia, Europe to Latin America, Biden has sought to cool tensions that rose during President Donald Trump’s four years in office. Yet, there have been no overtures to China. Although the Biden administration has halted the ferocious rhetorical attacks and near daily announcements of new sanctions on China that had become commonplace under Trump, it has yet to back down on any of Trump’s actions against Beijing.

2021/22 U.S. WINTER WHEAT PRODUCTION: 33.3 [30.2–36.3] MILLION TONS, UNCHANGED FROM LAST UPDATE. Outlooks for 2021/22 U.S. winter wheat planted area and production are unchanged at 30.9 million acres and 33.3 [30.2–36.3] million tons, respectively. In Winter Wheat and Canola Seedings (12 January), USDA set its initial estimate of 2021/22 plantings at 32 million acres, the first yearly rise since 2013.

For the week ended Feb 26, ethanol production was 849,000 barrels per day (estimates were 680,000 to 890,000), up 27% (658,000) a week ago, down 21% versus a year ago. Stocks were 22.4 mil barrels (estimates were 22.3 to 22.7), down 1.6% (22.8 mil), down 10.2% versus last year. Corn used was 85.8 mil bu versus 66.5 mil last week and versus the 96.1 mil needed to meet USDA projections.

After thawing from a deep freeze in previous weeks, US ethanol production has bounced back — rising this week. That’s up from last week, which was the lowest level since the pandemic first decimated ethanol production last year. The uptick is more than expected by market participants informally surveyed, but still puts US ethanol production at a less-than-optimal position. At 849,000 barrels per day week ending February 26, this will not favor USDA’s 4.950 billion bushel corn usage unless we see [over] 925,000 [barrels] per day rebound by mid-March.

Wire story talks about a trucker hitting the highways to collect used cooking oil from restaurants. He works for Vancouver-based renderer West Coast Reduction Ltd, which processes the grease into a material to make renewable diesel, a clean-burning road fuel. That job has recently gotten much harder. He is caught between soaring demand for the fuel – driven by U.S. and Canadian government incentives – and scarce cooking oil supplies, because fewer people are eating out during the coronavirus pandemic.

China’s appetite for US grain exports isn’t expected to evaporate any time soon, says Ray Young, executive vice president of Archer Daniels Midland. Speaking at a virtual conference Wednesday, Young says that the company sees China’s appetite for US soybeans and corn as being based on need to use the commodities, not just simply stockpile them. “I think the reason China is buying agricultural products throughout the world is fundamental demand,” says Young — calling China’s appetite a “medium-term” trend. The reason, Young says, is because China has escaped the throes of the Covid-19 pandemic while other areas like the US still grapple with it — making China’s demand stand out in front of others.

2020/21 BRAZIL CORN PRODUCTION: 105 [95.0–111] MILLION TONS, unchanged from last update. As second crop sowing delays remain at half the pace seen last season, 2020/21 total Brazil corn production is tentatively kept at 105.2 [95-111] million tons. Total corn area is still seen at 18.9 million hectares, although the prospect of lower second crop corn area continues to rise as sowings remain severely delayed. The area estimate is still 0.8 million hectares below USDA’s World Agricultural Outlook Board (WAOB) figure from February, which assumes total corn sowings at 19.7 million hectares and national-level yield of 5.53 tons per hectare.

2020/21 ARGENTINA CORN PRODUCTION: 46.0 [42.1–48.6] MILLION TONS, DOWN <1% FROM LAST UPDATE. Lingering dryness in the eastern Pampas fractionally lowers 2020/21 Argentina corn production to 46.0 [42.1–48.6] million tons, despite the welcomed moisture over the western counterpart last week and overall higher than expected vegetation densities throughout the Pampas. Our current estimate puts planted area at 6.4 million hectares, slightly above 6.3 million hectares reported by Bolsa de Comercio in Buenos Aires, but below the Bolsa de Comercio in Rosario’s 7.1 million hectares. In February’s WASDE (09 February), USDA placed Argentina corn production at 47.5 million tons, unchanged from last update. Bolsa de Comercio in Buenos Aires and Bolsa de Comercio in Rosario currently forecast production at 46 and 48.5 million tons, respectively.

2020/21 Paraguay soybean production: 9.9 [8.6–10.2] million tons, unchanged from last update

Most Ukrainian winter grain crops are in excellent condition thanks to favourable weather that could lift the 2021 harvest to a record high above 75 million tonnes, a senior government official said.

Euronext wheat fell on Wednesday, pressured by pre-expiry adjustments in front-month futures, a lack of fresh export demand and a sharp drop in Chicago prices. May milling wheat settled down 2.25 euros, or 1.0%, at 229.75 euros ($277.19) a ton, but again held chart support around 229 euros. Front-month March futures ended down 7.75 euros, or 3.2%, at 237.25 euros a tonne, as they retreated further from Monday’s peak of 252.75 euros that was the highest front-month price since May 2013.

Soaring prices of rapeseed in the European Union due to a sharp fall in supplies is likely to boost EU imports of the oilseed in the first six months of 2021,  said Oil World. Paris rapeseed futures on Tuesday hit their highest since September 2012 on tight European inventories and firm international oilseed markets. Stocks in the 27 EU member states of rapeseed/canola, used for edible oil and biodiesel production, fell to an estimated 8.7 million tonnes in early January 2021 from 9.1 million in January 2020 and 10.7 million in January 2019. Good profit margins have led to an increase in EU rapeseed crushings in October to December 2020 and EU crushings look like accelerating in the first quarter of 2021, also helped by large European export sales of rapeseed oil, mainly to China. Oil World expects EU imports of rapeseed/canola to rise to a record 6.55 million tonnes in the July 2020/June 2021 season, up from 6.08 million tonnes last season.

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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