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Global Ag News for Oct 8


Overnight trade has SRW Wheat up roughly 6 cents, HRW up 6; HRS Wheat up 4, Corn is up 3 cents; Soybeans up 7;  Soymeal up $3.50, and Soyoil up 5 points.

Chinese Ag futures have been closed for a week long holiday (return tonight).

Malaysian palm oil prices were down 7 ringgit at 2,863 (basis December) at midsession breaking a 3 day climb as supply concerns limited losses.

U.S. Weather Forecast: The 6 to 10 day forecast for the Midwest has differences with the models. Both have another front moving through the middle of next week. The GFS has little in the way of rain with it while, the European sees moderate rainfall for MO, IL, MI, SE WI, and NW IN with light amounts elsewhere. Temps will move to above average by the weekend and stay a bit above average through most of next week.  The Southern Plains over the 6 to 10 day period has below average rainfall for the region. Temps will be running above average.

South America Weather Forecast: The Brazilian growing regions has light rainfall for the central part of the region today and tomorrow. By the weekend, light to moderate rainfall begins to fall in the northern sections of the growing region spreading into early next week. The 6 to 10 day forecast sees widespread rain fall in the northern regions with moderate amounts of around 85% coverage. The Argentine growing regions has mostly dry weather over the next 10 days with some light rainfall in Buenos Aries later in the weekend.

Europe/Black Sea Region Forecast: Most of Europe gets rain at one time or another and the amounts of rain are sufficient to support long term winter crop development, although late season planting will be delayed at times. Some of the rain in Western Europe has come a little late in the season, but crops could still establish favorably if there were some drier and warmer days in the immediate future.

The GFS model increased scattered showers in eastern Ukraine and a few Russia Southern Region locations after October 19; Romania, Bulgaria, and Moldova get timely rainfall along with western Ukraine; a few showers might occur in some of the driest areas October 20-23.

The player sheet had funds net buyers of 12,000 contracts of SRW Wheat; net bought 15,000 Corn; net bought 6,000 Soybeans; bought 5,000 Soymeal, and; net sold 1,000 Soyoil.

We estimate Managed Money net long 64,000 contracts of SRW Wheat; long 205,000 Corn; net long 283,000 Soybeans; net long 102,000 lots of Soymeal, and; long 97,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures up roughly 10,200 contracts; HRW Wheat up 2,200; Corn down 7,900; Soybeans up 2,400 contracts; Soymeal down 5,300 lots, and; Soyoil down 2,400.

Deliveries were ZERO Soymeal and ZERO Soyoil.

There were no changes in registrations—Registrations total 109 contracts for SRW Wheat; ZERO Oats; Corn 361; Soybeans 1; Soyoil 1,907 lots; Soymeal 250; Rice ZER0; HRW Wheat 135, and; HRS 1,195.

Tender Activity—Japan bought 118,428t U.S./Canadian/Australian wheat—Pakistan bought 330,000t optional-origin wheat—Jordan passed on 120,000t optional-origin wheat—S. Korea feed groups bought 262,000t S. American corn, bought 60,000t optional-origin soymeal—

U.S. ethanol production for the week ended October 2nd averaged 923,000 barrels per day (up 4.77% versus a week ago, down 4.15% versus a year ago); stocks totaled 19.672 mil barrels (down 0.10% versus a week ago, down 7.31% versus last year); corn use for the week was 91.7 mil bu (87.4 mil last week) and versus the 98.5 mil bu needed to meet USDA projections.

It’s the highest ethanol production has been in roughly a month; the uptick in production exceeded analyst expectations; production is still well down from a year ago.

Red River Biorefinery in Grand Forks, North Dakota, came online in April, arguably the worst time for an ethanol facility to begin operating as the coronavirus pandemic sank fuel demand; instead of shutting like many ethanol facilities, the company switched focus from producing fuel ethanol to making high-grade alcohol for hand sanitizer, where demand surged during the pandemic as Americans scrambled to protect themselves against the coronavirus; Red River and several other companies now view the hand sanitizer market as more than a temporary salve for weak fuel demand, making permanent investments in production of high-grade alcohol that meets standards for producing sanitizer.

U.S. corn exports doubled from last September, while S. America exports declined from a month ago – Refinitiv Commodities Research

US shipped record high soybean in September while Argentina exports fell dramatically – Refinitiv Commodities Research

China soybean imports slumped in September, but imports from the U.S. will soar over the next months – Refinitiv Commodities Research

Global food prices continued to climb higher in September, supported by rebounding demand and concerns that dry weather could harm crop harvests, the United Nations’ Food and Agriculture Organization said; the UN FAO’s Food Prices Index, which tracks the price of a basket of the most common foodstuffs such as grains, vegetable oils, and meat, rose 2.1% in September to its highest level since February; the overall rise in food prices was driven mainly by cereals and vegetable oils.

FAO revised down its forecast for the 2020 cereal season by 2.5 million tons, reflecting lower expectations for the output of global coarse grains; however, despite this reduction, the agency still expected a record harvest this year of 2.762 billion tons, up 2.1% on 2019 levels

The forecast for world cereal utilization in 2020/21 was put at 2.744 billion tons, down 2.8 million tons since September, but still 54.5 million tons above the 2019/20 estimate

The forecast for world cereal stocks by the close of seasons in 2021 was 890 million tons, down 5.9 million tons from the previous estimate but still representing a record high

Selected highlights from a report issued by a U.S. Department of Agriculture attache in Beijing:

China’s 2020/21 feed and residual use for all coarse grains and feed-quality wheat are estimated to increase 3.2 percent compared to the previous marketing year due to a projected recovery of swine production and strong expansion in the poultry and ruminant sectors; though typhoons caused heavy damage and extensive lodging in the major corn producing northeastern provinces, the impact on overall production will be limited as storms hit only weeks before harvest and will not result in a total loss; in addition, Fall Army Worm (FAW) impact is less than anticipated resulting in a total decrease in corn production of only 4 percent; while China may rely more on corn imports in the coming marketing year, some of these gains will be mitigated by an increased use of sorghum, barley, and old rice and wheat stocks in feed rations to take the place of record high-priced corn

Favorable late-season weather raises China corn production – Refinitiv Commodities Research

Brazilian soy production has the potential to reach a record 132.25 million tons in the 2020-2021 crop season, with delays in plantings due to a drought not affecting the total output, according to analysts polled.

Argentina wheat production down again on soil moisture depletion in Córdoba – Refinitiv Commodities Research

Argentina has approved HB4 drought-resistant GMO wheat by biotechnology firm Bioceres SA, the company and the government said, making it the first country in the world to approve a strain of GMO wheat; no countries have yet given the green light to imports of GMO products and Bioceres said it will only begin marketing HB4 once it is approved for importation by Brazil, the biggest destination for Argentine wheat.

Russia’s agriculture ministry said on Wednesday that it planned to set a grain export quota for period between Jan. 1 and June 30; Russia has said it could set the grain export quota for January-June 2021 if there is a need to secure domestic supplies; the size of the quota could be 20 million tons of grain for January-June 2021.

Russian exports of wheat increased to 19.7 million tons in the first eight months of 2020 from 18.5 million tons a year ago, official customs data showed

Russia is expected to export around 50 million tons of grain in the 2020/21 marketing season, the Deputy Prime Minister said; the agriculture ministry previously expected Russia to export 45 million tons of grain, including 35 million tons of wheat, in the 2020/21 marketing season that started on July 1.

2021/22 Russia wheat production stable as dryness concerns continue – Refinitiv Commodities Research

Russia wheat exports continued to grow in September; U.S. exports also show gains – Refinitiv Commodities Research

Kyiv-based consultancy ProAgro on Wednesday cut its Ukraine 2020 grain harvest forecast to 69.44 million tons from the previous forecast of 71.34 million tons due to a smaller corn output.

Beneficial rainfall maintains 2021/22 Ukraine wheat production near last season – Refinitiv Commodities Research

Ukraine corn production steady as harvests continue at near average pace – Refinitiv Commodities Research

2020/21 EU-28 corn production tentatively unchanged as harvests continue – Refinitiv Commodities Research

Farmers still likely to plant more rapeseed in the EU in 2021/22 – Refinitiv Commodities Research

Kazakhstan wheat unchanged as harvests near completion – Refinitiv Commodities Research

India’s edible oil imports in 2019/2020 is seen falling to 13.5 million tons versus 14.9 million tons a year ago due to the COVID-19 outbreak, the Solvent Extractors Association (SEA) of India 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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