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Global Ag News for Sep 3rd

 TODAY – COMMITMENTS OF TRADERS

Wheat prices overnight are down 1 3/4 in SRW, down 2 1/4 in HRW, unchanged in HRS; Corn is down 4; Soybeans up 1 3/4; Soymeal down $0.09; Soyoil up 0.33.

For the week so far wheat prices are down 17 in SRW, down 17 1/4 in HRW, down 18 1/4 in HRS; Corn is down 32 1/4; Soybeans down 38; Soymeal down $1.34; Soyoil down 1.18.

For the month to date wheat prices are down 7 in SRW, down 5 1/4 in HRW, down 4 in HRS; Corn is down 12 3/4; Soybeans down 7 1/2; Soymeal down $6.50; Soyoil up 0.37.

Chinese Ag futures (JAN 22) Soybeans up 69 yuan ; Soymeal up 11; Soyoil up 136; Palm oil up 156; Corn up 12 — Malasyian Palm is up 81. Malaysian palm oil prices overnight were up 81 ringgit (+1.91%) at 4322 climbing the most in three weeks tracking a rise in soybean oil prices, and as traders weigh expectations that demand from top buyer India will increase.

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

The player sheet for Sept. 2 had funds: net buyers of 1,500 contracts of  SRW wheat, buyers of 2,500 corn, buyers of 2,500 soybeans, sellers of 2,500 soymeal, and  buyers of 2,000 soyoil.

Preliminary changes in futures Open Interest as of September 2 were: SRW Wheat down 5,607 contracts, HRW Wheat up 900, Corn down 1,432, Soybeans down 1,388, Soymeal up 2,430, Soyoil down 7,484.

There were changes in registrations (-98 Soyoil). Registration total: 1,180 SRW Wheat contracts; 53 Oats; 0 Corn; 0 Soybeans; 300 Soyoil; 1 Soymeal; 1,275 HRW Wheat.

TENDERS

  • SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 126,000 tonnes of U.S. soybeans to China for shipment in the 2021/22 marketing year.
  • WHEAT SALE: Turkey’s state grain board TMO provisionally bought 300,000 tonnes of wheat in an international tender on Thursday
  • SOYOIL, SUNOIL SALE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Thursday it had bought 10,000 tonnes of soyoil and 19,000 tonnes of sunflower oil in an international tender for arrival between Oct. 20 and Nov. 5.
  • WHEAT TENDER: Jordan’s state grain buyer has issued a tender to buy 120,000 tonnes of milling wheat that can be sourced from optional origins

PENDING TENDERS

  • FEED WHEAT TENDER: An importer in the Philippines is tendering to purchase an estimated 60,000 tonnes of animal feed wheat
  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
  • WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase 48,875 tonnes of grade 1 milling wheat to be sourced from the United States
  • WHEAT FLOUR TENDER: The state purchasing agency in Mauritius issued an international tender to buy 47,000 tonnes of wheat flour to be sourced from optional origins

More grain terminals found damaged by Ida, exports may stall for weeks

Grain shippers on the U.S. Gulf Coast reported more damage from Hurricane Ida to their terminals on Wednesday as Cargill Inc confirmed damage to a second facility, while power outages across southern Louisiana kept all others shuttered.

Global grains trader Cargill Inc L said its Westwego, Louisiana, terminal was damaged by Ida, days after confirming more extensive damage at its only other Louisiana grain export facility, located in Reserve.

Emergency authorities were still surveying the destruction, as numerous barges and boats were sunk in the lower Mississippi River, while other debris has obstructed the navigation channel, the U.S. Coast Guard said.

A portion of the river north of river mile 167.5 near Donaldsonville, Louisiana, that was closed by the Coast Guard this week was reopened to vessel traffic on Wednesday afternoon, according to a Coast Guard document seen by Reuters. The notice warned that some hazards such as debris may still exist in the major shipping waterway.

Farther south, a roughly 75-mile (120-km) stretch remained closed to all vessel traffic due to downed power lines and sunken vessels in the river, according to the Coast Guard and shipping sources.

The Coast Guard will also allow light-draft ships to transit during daylight hours from the Southwest Pass to the south edge of the restricted zone at river mile 105, the notice said.

Mike Strain, commissioner of the Louisiana Department of Agriculture and Forestry, saw scores of barges and at least five ships grounded during a flyover of the river.

Cargill is still assessing the extent of the damage and does not yet know how soon its grain loading and shipping operations at the busiest U.S. grains port may resume, Cargill spokeswoman April Nelson said.

Rival exporter CHS Inc CHSCP.O is diverting its export shipments scheduled through the next month through its Pacific Northwest terminal as the hurricane knocked out a transmission line that powers its lone Gulf Coast facility, the company said.

Other shippers, including Bunge Ltd BG.N and Archer-Daniels-Midland Co ADM.N, are still assessing damage to their locations, although all are still without power, the companies said. Power may not be restored for weeks.

U.S. Export Sales of Soybeans, Corn and Wheat by Country

China bought 1.29m tons of the 2.2m tons of soybeans sold in the week. Mexico was the top buyer of corn and also led in wheat

U.S. Export Sales of Pork and Beef by Country

  • Mexico bought 21.2k tons of the 33.5k tons of pork sold in the week
  • South Korea led in beef purchases

USDA September Estimates of 2021 Farm Income

September net farm income est. raised to $113b from $111.4b in February

Drought in U.S. Corn and Soybean Regions Eases This Week: USDA

  • Corn crops in areas of moderate to intense drought dropped 6 percentage points to 32%
  • Soybean area fell 4 points to 28%

Saskatchewan crop report

Despite the recent rainfall delays that many producers experienced, harvest continues to progress quickly this week. It has advanced substantially in the northern regions. Thirty-six per cent of the crop is now in the bin, up from 29 per cent last week and well over the five-year (2016-2020) average of 22 per cent. An additional 30 per cent of the crop is now swathed or ready to straight-cut.

The southwest region continues to have the most progress in the province with 47 per cent of the crop now combined. The southeast region has 42 per cent combined, the west-central 36 per cent, the east-central 25 per cent, the northeast 34 per cent and the northwest 21 per cent.

Ninety-nine per cent of the winter wheat, 83 per cent of the fall rye, 85 per cent of the lentils, 84 per cent of the field peas, 57 per cent of the mustard, 40 per cent of the durum, 11 per cent of the chickpeas, 36 per cent of the spring wheat and 11 per cent of the canola has now been combined. An additional 19 per cent of the canola and 16 per cent of the mustard is swathed or ready to straight-cut.

Many parts of the province experienced scattered rain showers this week, varying from trace amounts up to 77 mm in the Limerick area. The Macklin area received 51 mm, the Conquest area 40 mm, the Roblin area 35 mm, the Goodeve area 30 mm and the Rama area 28 mm.

Asia wheat crunch to persist as farmers hold off for better prices

Asian wheat buyers are struggling to secure supplies as farmers in top exporting nations hold back sales following production cuts that have pushed global prices to multi-year highs, millers and traders said.

Intense heat withered crops in recent months across the world’s most important export hubs of the Black Sea, Canada and Europe, catching trading firms by surprise and leaving buyers facing shortages and potential output cuts at flour mills.

Large wheat growers such as China have also stepped up imports of the grain this year, ensuring that competition for wheat across Asia will persist.

Buyers in Asia currently pay around $35 per tonne extra in shipping costs for wheat from major sellers such as Canada, more than twice the amount paid by those in North Africa for supplies from the Black Sea and Europe.

OUTPUT DROP

Export prices from Ukraine and France are up nearly 20% in the past month, leaving buyers reluctant to chase prices higher. Further supporting prices are expectations that Russia’s export season will be prolonged following a hike in export taxes that has slowed sales, traders and analysts said.

Russian farmers are also taking longer than usual to sell as they hope for higher prices, with a greater proportion of this year’s crop concentrated among the wealthiest growers who can wait for further gains, said Andrey Sizov at agriculture consultancy Sovecon in Moscow.

Russian exports tracked by Refinitiv totalled 3.1 million tonnes in August, down 20% from the average for that month from 2018 through 2020. For the 2021-22 crop year, Sovecon estimates total exports of 33.9 million tonnes, which would be the lowest marketing season total since 2016-17. (Full Story)

TIGHT STOCKS

Locally held Asian stockpiles won’t offer much of a buffer, as they are already lower than normal among Indonesian millers at around two to three months versus the usual four, said a Singapore-based trader.

Australia is a rare bright spot for wheat production potential this year, but slow farmer sales are again hindering grain flows.

With wheat supplies in Asia set to remain tight for the near term, a source at a milling company with facilities across the region said milling activity will decline

Farm State Democrats Push for Biofuel Boost in U.S. Budget Bill

Democratic lawmakers are asking House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer to extend a biofuel production tax credit and include other measures to expand U.S. biofuel use in upcoming budget legislation.

The lawmakers, led by Sen. Amy Klobuchar of Minn., want the congressional leaders to include provisions that would:

  • Enhance fuel pump infrastructure
  • Allow retailers to sell E15 year-round
  • Set a low-carbon fuel tax credit to encourage ethanol blends of 15% or more
  • Incentivize manufacturing of flex-fuel vehicles able to burn fuel with higher ethanol content
  • Enact a long-term extension of a second generation biofuel producer tax credit that expired last year

Rising Food Prices Still Driving Inflation

Even though some agricultural markets are ebbing, concerns over food inflation remain front and center. The United Nations’ monthly food-price index returned near a decade high in August after posting declines in June and July. Wheat prices have surged as bad weather hit crops from Canada to Russia. The costs of sugar and palm oil are also climbing from shrinking production.

The spiraling prices are likely to stay a focus for officials in both importing and exporting nations as they seek to tame grocery tabs for citizens. Argentina has extended limits on beef sales abroad through the end of October and rising wheat prices in Russia, even as Moscow taxes shipments, have raised concern about possible government reaction.

Argentina Rains Boost Wheat Crop in Top Exporter: Grain Exchange

Rains over the past 24 hours have helped reverse water shortages on wheat farms in central and southern regions, the Buenos Aires Grain Exchange says in its weekly crop report.

  • The precipitation not only drives plant growth and recovery, but allows farmers to resume fertilization work
  • 59% of wheat fields now have favorable-to-optimum moisture levels vs 48% last week

Brazil’s Mato Grosso Soy Seeding Seen Getting Delayed on Drought

Early 2021-22 soybean plantings in top growing state may come later than usual as weather conditions have been too dry, said Wellington Andrade, executive director for farm group Aprosoja in Mato Grosso.

  • NOTE: Usually, farmers start soybean seeding on September 15, when sanitary regulations allow that
  • Regular rains are expected to return after October 10, according to Somar Meteorologia, while in the second half of September some rains may allow isolated seeding, meteorologist Celso Oliveira says
  • This year’s delay may be less pronounced than a year ago, when regular rains came only in November: Somar

USDA Raises Estimate of 2021 Farm Income to $113 Billion

The USDA expects farmer profits to rise by 20% this year vs 2020, according to the Farm Income and Financial Forecasts report released Thursday on the agency’s website.

  • USDA’s previous est. for 2021 was for $111b
  • Gross income raised by $31.4b from February., while expenses lifted by $29.7b
  • Income from crops seen at $230.1b, an increase of $14.3b from Febraury and 20% more than in 2020

U.S. Barge Shipments of Grain Fell 28% Last Week: USDA

Shipments along the Mississippi, Illinois, Ohio and Arkansas rivers declined in the week ending Aug. 28 from the previous week, according to the USDA’s weekly grain transportation report.

  • Barge shipments of corn fell 49% from the previous week
  • Soybean shipments down 18% w/w

Ethiopia’s Wheat Imports Seen at 1m Tons This Year: Minister

Ethiopia is in the process of importing 600,000 tons of wheat and expects to ship in another 400,000 tons before the end of 2021, State Minister of Finance Eyob Tekalign told reporters in Addis Ababa.

  • “Currently, we have a serious humanitarian challenge, so we wanted to take short-term measures,” Eyob said
  • NOTE: The USDA estimates Ethiopia’s wheat imports will total 1.5m tons in the 2021-22 season, up from 1.4m tons a year earlier
  • NOTE: The country has aimed to become self-sufficient in wheat in the coming years
  • A rebellion in the northern Tigray region has displaced millions of people and left more than 5 million in need of food aid

Ukraine grain exports rise 13.7% so far in 2021/22 to 9.1 mln T

Ukraine has exported 9.14 million tonnes of grain so far in the 2021/22 July-June season versus 8.04 million at the same point a year earlier, agriculture ministry data showed on Friday.

That included almost 5 million tonnes of wheat, 2.84 million tonnes of barley and 1.27 million tonnes of corn, the data showed.

Ukraine plans to thresh a record 80.6 million tonnes of grain in 2021, up from 65 million tonnes in 2020. The export may jump to 60.7 million tonnes in 2021/22 from 44.7 million in 2020/21.

The ministry this week said farms had almost completed the 2021 wheat harvest, threshing 32.52 million tonnes from 99.4% of the sowing area, with a yield of 4.62 tonnes per hectare.

French Corn Conditions Steady; Wheat Harvest Is Ending: AgriMer

French corn conditions were unchanged in the week to Aug. 30, FranceAgriMer data showed on Friday.

  • 91% of the crop was rated in the top conditions, the same as in the previous week, and up from 61% at the same time last year
  • The country’s soft-wheat harvest was 99% complete

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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