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Global Ag News for Oct 5th

TODAY – Corn Futures Rise as Biden Engages with Beijing on Trade

Wheat prices overnight are down 8 in SRW, down 11 3/4 in HRW, down 6 1/4 in HRS; Corn is down 2 1/4; Soybeans unchanged; Soymeal down $0.12; Soyoil up 0.62.

For the week so far wheat prices are down 1 1/4 in SRW, down 10 in HRW, down 3 1/4 in HRS; Corn is down 3 1/4; Soybeans down 12 1/2; Soymeal down $0.46; Soyoil up 0.49. For the month to date wheat prices are up 23 in SRW, up 10 3/4 in HRW, up 11 1/2 in HRS; Corn is up 1 3/4; Soybeans down 20 1/4; Soymeal down $6.30; Soyoil up 0.76.

Malaysian palm oil prices overnight were up 153 ringgit (+3.34%) at 4736 extending gains to a fresh record on a wave of bullish factors, including the outlook for lower inventories in Malaysia, sturdy demand and concerns that production by top growers will fall short of expectations. China’s markets continue to be closed for holiday.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Scattered showers Monday. Mostly dry Tuesday. Scattered showers Wednesday-Friday, mostly north. Temperatures near to below normal through Friday. Mato Grosso, MGDS and southern Goias Forecast: Isolated to scattered showers through Friday. Temperatures near to above normal through Friday.

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Mostly dry Monday. Isolated showers east Tuesday. Mostly dry Wednesday-Thursday. Isolated showers Friday. Temperatures below normal through Friday. La Pampa, Southern Buenos Aires Forecast: Mostly dry Monday. Isolated showers east Tuesday. Mostly dry Wednesday-Friday. Temperatures below normal through Friday.

Midwest corn, soybean and winter wheat forecasts: West: Mostly dry Monday. Isolated showers south Tuesday-Wednesday. Isolated showers Thursday-Friday. Temperatures above to well above normal through Friday. East: Isolated showers Monday-Tuesday. Scattered showers Wednesday-Friday. Temperatures above to well above normal through Friday. 6 to 10 day outlook: Isolated to scattered showers Saturday-Wednesday. Temperatures above to well above normal Saturday-Wednesday.

The player sheet for Oct. 4 had funds: net buyers of 2,000 contracts of  SRW wheat, zero corn, buyers of 7,000 soybeans, sellers of 2,500 soymeal, and zero soyoil.

There were no changes in registrations. Registration total: 1,180 SRW Wheat contracts; 2 Oats; 17 Corn; 1 Soybeans; 365 Soyoil; 1 Soymeal; 1,273 HRW Wheat.

Preliminary changes in futures Open Interest as of October 4 were: SRW Wheat up 4,721 contracts, HRW Wheat up 1,989, Corn up 6,052, Soybeans up 10,482, Soymeal up 8,661, Soyoil up 5,883.

TENDERS

  • CORN SALE: The U.S. Department of Agriculture confirmed private sales of 426,800 tonnes of U.S. corn to Mexico for shipment in the 2021/22 marketing year.
  • WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase 48,000 tonnes of grade 1 milling wheat to be sourced from the United States
  • WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins,
  • SOYOIL, SUNOIL TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it was seeking soyoil and sunflower oil in an international purchasing tender for arrival Nov. 25 to Dec. 20. The deadline for offers is Oct. 5.

PENDING TENDERS

  • WHEAT TENDER: A United Nations agency has issued an international tender to purchase about 200,000 tonnes of milling wheat on behalf of the Ethiopian government
  • WHEAT TENDER: Ethiopia’s Public Procurement and Property Disposal Service is seeking 300,000 tons of milling wheat on behalf of the National Disaster Risk Management Commission, it said on Facebook.

Corn Futures Rise as Biden Engages with Beijing on Trade

The Biden Administration will directly engage with Beijing in the coming days to enforce commitments in the countries’ trade deal and start a new process to exclude certain products from U.S. tariffs, according to senior administration officials. Traders will parse through a speech by U.S. Trade Representative Katherine Tai on Monday about the Biden administration’s approach to the bilateral trade relationship with China.

USDA CROP PROGRESS: Corn 29% Harvested, Soybeans 34% Harvested

Highlights from the report:

  • Corn harvest 29% vs 18% last week, and 24% a year ago
  • Corn 59% G/E vs 59% last week, and 62% a year ago
  • Corn mature 88% vs 74% last week, and 85% a year ago
  • Soybeans 58% G/E vs 58% last week, and 64% a year ago
  • Soybean drop leaves 86% vs 75% last week, and 83% a year ago
  • Soybeans harvested 34% vs 16% last week, and 35% a year ago
  • Winter wheat planted 47% vs 34% last week, and 50% a year ago
  • Winter wheat emerged 19% vs 9% last week, and 22% a year ago
  • Cotton 62% G/E vs 65% last week, and 40% a year ago
  • Cotton harvested 13% vs 11% last week, and 16% a year ago
  • Sorghum 56% G/E vs 56% last week, and 51% a year ago

U.S. Inspected 809k Tons of Corn for Export, 844k of Soybean

In week ending Sept. 30, according to the USDA’s weekly inspections report.

  • Soybeans: 844k tons vs 485k the previous wk, 2,083k a yr ago
  • Wheat: 612k tons vs 384k the previous wk, 680k a yr ago
  • Corn: 809k tons vs 636k the previous wk, 911k a yr ago

U.S. Corn, Soybean, Wheat Inspections by Country: Sept. 30

  • Soybeans for China-bound shipments made up 355k tons of the 844k total inspected
  • Mexico was the top destination for corn inspections, Philippines led in wheat

Malaysia Oct. 1-5 Palm Oil Exports -31.74% M/m: Intertek

Malaysia’s palm oil exports fell 31.74% m/m during Oct. 1-5, according to Intertek Testing Services.

Fertilizer Prices Could Drive Cost of Corn Production Up 16%

Expensive fertilizer could push U.S. corn farmers’ cost of production 16% higher, Alexis Maxwell, an analyst at Bloomberg’s Green Markets, says in a note Monday.

  • Fertilizer could account for 45% of corn’s operating cost in 2022, up from normal 35%
  • Farmers could switch from corn to less fertilizer-intensive crops like wheat, soybeans
  • “Corn farmers also may pull back on phosphate and potash applications to spend on cheap ammonia in autumn,” Maxwell says
  • “After trimming seed and chemical expenses by 8% and 12%, respectively, per acre since 2016, farmers have little room for further cuts from those inputs.”

Brazil Soybean Planting at 4% as of Sept. 30: AgRural

Compares with 1% a week earlier and 2% last year, consulting firm AgRural says in an emailed report.

  • With not much rain and high temperatures, most farmers were waiting for better conditions to speed up seeding
  • Summer corn planting was 33% complete in Brazil’s center-South Region, compared with 31% a year before

Vietnam Plans to Cut U.S. Pork Tariffs as Trade Tensions Ease

  • Frozen pork duties falling to 10%; corn, wheat also to be cut
  • U.S., Vietnam have recently resolved currency, timber issues

Vietnam plans to lower tariffs on U.S. frozen pork, corn and wheat, a further sign of easing trade tensions with its biggest export market.

The cuts, which will be announced this quarter, are intended to increase imports from the U.S. and narrow its trade deficit with Vietnam, Nguyen Do Anh Tuan, a spokesman for Vietnam’s agriculture ministry, said in an interview Monday.

The planned cuts will see tariffs lowered to 10% from 15% for frozen pork, 2% from 5% on corn, and eliminated for wheat from the current 3%, Tuan said.

The move to boost purchases of American agricultural goods is the latest effort to improve relations as Washington and Hanoi seek closer economic and geopolitical ties to balance China’s increasing clout in the region.

Pork accounts for more than 70% of Vietnam’s total meat consumption. While the country has one of the biggest hog herds in Southeast Asia, demand for imported pork has risen over the past two years as its pig farms were ravaged by African swine fever.

Vietnam last year temporarily cut its U.S. frozen pork import tariffs to 10% resulting in American exports to the country doubling in the second half of 2020 from the first half, according to a May letter to U.S. Trade Representative Katherine Tai and signed by 72 members of Congress.

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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