Written Commentary
TODAY—WEEKLY ETHANOL STATS —
Overnight trade has SRW Wheat up roughly 2 cents, HRW up 1; HRS Wheat down 1, Corn is up 4 cents; Soybeans up 13; Soymeal up $2.50, and Soyoil up 45 points.
Chinese Ag futures (January) settled up 16 yuan in soybeans, down 1 in Corn, up 32 in Soymeal, up 42 in Soyoil, and up 28 in Palm Oil.
The player sheet had funds net sellers of 3,000 contracts of SRW Wheat; bought 7,000 Corn; bought 12,000 Soybeans; net bought 5,000 lots of Soymeal, and; net bought 1,000 lots of Soyoil.
We estimate Managed Money net long 20,000 contracts of SRW Wheat; long 254,000 Corn; net long 239,000 Soybeans; net long 79,000 lots of Soymeal, and; long 107,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 2,500 contracts; HRW Wheat up 15; Corn up 25,700; Soybeans up 4,400 contracts; Soymeal up 1,800 lots, and; Soyoil up 3,70.
The Taiwan Flour Millers’ Association has issued an international tender to purchase 82,220 tonnes of grade 1 milling wheat to be sourced from the United States, European traders said on Wednesday. The tender deadline is Nov. 25.
The lowest price offered in the tender from Pakistan to purchase 400,000 tonnes of wheat which closed on Wednesday was believed to be $286.75 a tonne c&f, European traders said in initial assessments. The state agency Trading Corporation of Pakistan (TCP) is still considering the offers and no purchase has been reported, traders said.
South Korea’s state-run Korea Agro-Fisheries & Food Trade Corp. has issued international tenders to purchase about 75,000 tonnes of soybeans free of genetically-modified organisms (GMOs), European traders said on Wednesday.
As harvest passes the 95% mark, updated area analyses fractionally lower 2020/21 U.S. corn production to 14.67 [14.4–15.03] billion bushels. National-level harvested area is tentatively reduced to 82.6 million acres, fractionally above the latest USDA estimates, following an updated analysis using the latest Farmer Service Agency figures. In its 10 November Crop Production report, USDA lowered its yield expectation to 175.8 bushels per acre, 1% below our current estimate. The latest Reuters Poll of Analysts (08 November) placed U.S. corn production at 14.8 [14.64–15.02] billion bushels, with yield at 177.7 [175.4–181] bushels per acre. The next USDA update for the 2020 crop will be released in the January Crop Production Annual Summary report.
Temperatures over the past week showed a split with below average (by as much as 6 °F) in most major producing areas of the Northern Plains and Upper Midwest, with proportional warmth in areas south and to the east. Rainfall followed a slightly more complex pattern, with above-average totals recorded in most of the Central and Upper Midwest, below-average totals in the Delta region and near-normal values elsewhere. Conditions proved a bit more challenging for farmers, with overall limited gains in harvested area. The latest Crop Progress report (16 November) set the national-level harvested pace at 95%, 8% ahead of the five-year average and 22% above the pace seen this time last season.
Fortunately for farmers, upcoming weather will likely result in mostly favorable harvest weather. The next ten days will feature mostly below average rainfall in most of the Corn and Soybean Belts, and widespread warmth which should help the final set of harvest to continue without any significant delays.
With harvest nearing completion, updated analyses of Farm Service Agency data fractionally lowers 2020/21 U.S. soybean production to 4.26 [4.03–4.47] billion bushels. The USDA lowered soybean yield estimates to 50.7 bushels per acre (bpa) in its 10 November Crop Production report, 1 bpa (2%) below our current estimate, with production reduced to 4.17 billion bushels. A recently released (08 November) Poll of Analysts saw soybean production at 4.25 [4.12–4.32] billion bushels, with yield at 51.6 [50.8–52.5] bushels per acre.
Updated area estimates and expected favorable harvest weather maintain current national-level soybean yield at 51.7 [49.8–53.8] bushels per acre.
There is no significant evidence of coronavirus being spread through food trade and such reports “need to be minimised”, Maximo Torero Cullen, chief economist of the United Nations food and agriculture agency, said on Wednesday. The FAO has previously said it does not see food production in supplier countries as a source of the novel coronavirus, he told the Global Grain conference. China says it has found the virus on the packaging of products from 20 countries but foreign officials say the lack of evidence produced by authorities means it is damaging trade.
Ukraine had harvested 58.3 million tonnes of grain from 14.4 million hectares, or 94% of the sown area, as of Nov. 16, Ukraine’s economy ministry said on Tuesday. It said farmers had completed the wheat and barley harvest and collected 22.7 million tonnes of corn from 82% of the sown area. The ministry says the grain crop could fall to about 68 million tonnes in 2020, from a record 75 million tonnes in 2019, owing to severe drought across most parts of the country. It also said farmers had sown 5.9 million hectares of winter wheat for the 2021 grain harvest, equating to 97% of the expected area.
European wheat futures in Paris rose on Tuesday, supported by strength in U.S. corn and soybean markets and strong recent demand for European wheat. Competitive prices for what is expected to be a bumper Australian harvest and improving conditions for U.S. winter wheat crops were capping wheat prices, dealers said.
Farm office FranceAgriMer increased its forecast of French soft wheat exports outside the European Union in 2020/21, pointing to brisk demand for a smaller French surplus this season.
In Germany, hopes for new export sales and a busy programme of ships loading wheat in German ports this month kept prices in Hamburg above Paris levels. Standard bread wheat with 12% protein for November delivery in Hamburg was offered for sale unchanged at about 3.5 euros over Paris December.
Three ships are each loading about 30,000 tonnes of wheat for Algeria in German ports this week, traders said. Another is set to load about 65,000 tonnes for Pakistan. With Britain’s trade relationship in 2021 with the EU still uncertain, British flour mills continue to buy wheat in Germany. Two ships each with just over 3,000 tonnes of German wheat sailed for Britain in past days. ($1 = 0.8432 euros)
Malaysian palm oil futures rose on Wednesday, underpinned by expectations of tight supplies in November, although concerns of slowing demand from Indonesia limited gains. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange gained 17 ringgit, or 0.52%, to 3,296 ringgit ($805.28) a tonne by the midday break.
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