Global Ag News for Oct 27
TODAY—WEEKLY DELIVERABLE STOCKS
Overnight trade has SRW Wheat up roughly 6 cents, HRW up 4; HRS Wheat up 4, Corn is up 3 cents; Soybeans unchanged; Soymeal up $1.50, and Soyoil down 5 points.
Chinese Ag futures (January) settled up 46 yuan in soybeans, up 3 in Corn, down 10 in Soymeal, up 82 in Soyoil, and up 88 in Palm Oil.
Malaysian palm oil prices were down 8 ringgit at 3,061 (basis January) on position-evening.
U.S. Weather Forecast: Significant precipitation is still expected in West Texas and from the Texas Panhandle through Oklahoma and south-central Kansas tonight into Thursday. This will significantly increase soil moisture and be beneficial for newly planted winter crops.
South America Weather Forecast: Brazil has rain falling in most of the nation at one time or another, but rainfall will be least frequent and least significant in the interior south. Argentina will receive showers today and Wednesday before dry weather occurs for about a week.
Europe/Black Sea Region Forecast: Europe weather will be quiet for a while with only brief periods of light precipitation expected in key winter crop areas. Last evening GFS model run likely took away too much moisture from eastern Ukraine and western parts of Russia’s Southern Region. The bottom line should be one of improvement for poorly established winter crops in Ukraine and at least the west half of Russia’s Southern Region.
The player sheet had funds net sellers of 9,000 SRW Wheat; sold 4,000 Corn; bought 4,000 Soybeans; bought 2,000 Soymeal, and; net bought 3,000 Soyoil.
We estimate Managed Money net long 42,000 contracts of SRW Wheat; long 249,000 Corn; net long 253,000 Soybeans; net long 96,000 lots of Soymeal, and; long 90,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 965 contracts; HRW Wheat down 260; Corn up 16,400; Soybeans down 10,300 contracts; Soymeal up 1,300 lots, and; Soyoil up 5,400.
There were no changes in registrations—Registrations total 109 contracts for SRW Wheat; ZERO Oats; Corn 1; Soybeans 1; Soyoil 1,907 lots; Soymeal 250; Rice ZER0; HRW Wheat 135, and; HRS 1,195.
Tender Activity—S. Korean feed group passed on 69,000t optional-origin corn, bought 268,000t optional-origin corn—Iran seeks 200,000t optional-origin corn—Taiwan bought 65,000t U.S. corn—
U.S. Winter Wheat planted was 85% (trade estimate was 86%) versus 77% last week, 83% a year ago, 80% average.
U.S. Winter Wheat emerged was 62% versus 51% last week, 60% a year ago, 60% average.
U.S. Winter Wheat was rated 41% good to excellent (trade estimate was 52%) versus NA% a week ago and 56% a year ago; 40% fair (NA% last week, 31% a year ago); 19% poor to very poor (NA% last week, 13% a year ago).
U.S. Corn harvested was 72% (trade estimate was 73%) versus 60% a week ago, 38% last year, and 56% average.
U.S. Soybeans harvested was 83% (trade estimate was 86%) versus 75% a week ago, 57% last year, and 73% average.
After two weeks of rapid harvest activity, wet and cold weather last week slowed progress across many areas of the U.S. Corn Belt, according to the Crop Watch producers. The Nebraska corn was harvested over the weekend, leaving the Ohio corn as the last field standing; cooler weather is expected to dominate for at least the next week, and many areas will likely have to contend with more precipitation, especially in the Eastern Belt. But that moisture, if realized, would be very welcome in the parched Southern Plains.
Yesterday’s U.S. weekly export inspections had:
—Wheat exports running 4% ahead of a year ago (6% last week) with the USDA currently forecasting a 1% increase on the year
—Corn 75% ahead of a year ago (up 77% last week) with the USDA up 32% for the season
—Soybeans are up 78% on the year (up 77% last week) with the USDA having a 26% increase forecasted on the year
The U.S. Environmental Protection Agency is considering changes to labels for gasoline containing higher blends of ethanol, or E15, in an effort to appease the biofuel industry’s concerns that current labels discourage use of the fuel; expanding the market for E15 has long been a policy goal for farmers and producers of ethanol but concerns that some older vehicles don’t run well on the product have been a headwind; current federal E15 labels warn of possible engine damage; the Trump administration, meanwhile, has been trying to shore up support in the Farm Belt ahead of the election through favorable announcements for biofuel advocates.
US industrial ethanol demand will largely remain dependent on future coronavirus spikes, while demand in the fuel market is falling due to the winter season.
Pacific Ethanol Inc will change its name to reflect its focus on specialty alcohols used in alcoholic beverages and sanitizers rather than on fuel ethanol, the company said on Monday; Pacific has increased production of specialty alcohol for consumer products over the past nine months, it said, as the coronavirus pandemic has boosted demand for hand sanitizer and other products that promote hand hygiene.
China’s grain traders and processing plants are suffering from a shortage of newly harvested rice as severe weather and the coronavirus pandemic have taken a hefty toll on south-central provinces, pushing up wholesale prices – a trend that is expected to last at least through the end of the year; however, the central government is guaranteeing that the rice harvest in northern provinces will be one of the best in history – large enough to prevent a sharp rise in rice prices at the consumer level ahead of the Lunar New Year holiday that starts on February 12.
Brazilian soybean farmers have planted 23% of the estimated 2020/2021 crop through Thursday of last week, as rains permitted sowing to progress after a drought that delayed work earlier in the season, agribusiness consultancy AgRural said; about 5.6 million hectares (13.8 million acres) were planted in the space of seven days; in the prior week, a mere 8% of the estimated area had been planted; despite initial delays, yields and overall output are expected to be good, with Brazilian farmers looking to collect around 132 million tons of soybeans this season, a record if that estimate is confirmed
Weather conditions have improved for Russia’s 2021 grain crop after it rained in several regions last week, Sovecon, a leading agriculture consultancy said; farmers have already sown winter grains for next year’s crop on 94% of the planned area, or on 18.0 million hectares, up from 17.6 million hectares around the same date a year ago.
Russian wheat export prices rose for the fourth consecutive week last week after dry weather in several regions and high demand from importers, analysts said; Russian wheat with 12.5% protein loading from Black Sea ports and for supply in November was at $257 a ton free on board (FOB) at the end of last week, up $6 from the previous week, agriculture consultancy IKAR said; Sovecon, another Moscow consultancy, said wheat rose by $7 to $255 per ton.
Ukraine is now not planning to review the current wheat export quota for the 2020/21 July-June season, the senior economy ministry said; grain traders and the government have agreed the volume of wheat available for export this season must not exceed 17.5 million tons in a bid to ensure local needs and prevent export restrictions; the economy ministry said Ukraine had used 57.4% of the 2020/21 wheat export quota, shipping abroad 10 million tons of the commodity in the July-June season; taking into account the smaller projected volume of exports… the current export rates are quite high.
Ukraine’s 2020/21 corn harvest is likely to fall to 33 million tons this year while the exports could total 26 million tons, economy ministry data showed; Ukrainian traders and analyst have said poor weather could reduce this year’s corn crop to 26-30 million tons from around 36 million tons in 2019.
Ukrainian sunflower seed refineries are working at reduced capacity due to a lack of seed for crushing, the national sunoil producers association said; however, there is no raw material; the refineries are half-loaded; Ukraine accounts for about 55% of global sunflower oil exports; the association said last week sunflower oil exports may fall to 5.6 million tons in the September 2020-August 2021 season from around 6.6 million in 2019/20 due to a smaller sunseed harvest and sunoil output.
Weather that was too dry then too wet has hampered field work in large parts of Europe in recent weeks, causing delays to the harvesting of summer crops and sowing of winter crops, the European Union’s crop monitoring service MARS said; the adverse conditions and a re-appraisal of data since the start of the season caused the crop monitor to cut its yield outlook again for all summer crops in the 27-member bloc.
For this year’s grain maize, MARS now expects an average EU yield at 7.42 tonnes per hectare (t/ha), down from its forecast last month of 7.83 t/ha, putting it 2.1% below the five-year average, it said in a report.
MARS also cut its forecast for the 2020 EU sunflower yield to 2.15 t/ha from 2.21 t/ha last month, now 4.2% under the five-year average.
The Philippines expects to harvest 8 million tons of corn this year, compared with last year’s output of 7.7 million tons, the Department of Agriculture (DA) said; a frequent importer of feed wheat and soybean meal, the Southeast Asian country expects to end the year with corn stocks equivalent to eight months of domestic requirements.
Ethanol production and consumption in India, the world’s third largest fuel market, is expected to increase quickly in coming years as the government seems keen to push the industry to higher blend rates, an industry official said; plants in the country are expected to boost ethanol production from 1.9 billion liters (0.5 billion gallons) in 2020 to 3 billion liters in 2021 on the way to meet a government target of adding 10% of ethanol to gasoline by 2022; that would require an ethanol volume of 5.5 billion liters.
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