Global Ag News Headlines
TODAY——WEEKLY EXPORT SALES
Overnight trade has SRW down roughly 6 cents, HRW down 6; HRS Wheat down 2, Corn is up 1 cent; Soybeans down 2, Soymeal down $1.50, and Soyoil up 15 points.
Chinese Ag futures (Sep) settled up 19 yuan in soybeans, up 3 in Corn, down 18 in Soymeal, up 92 in Soyoil, and up 60 in Palm Oil.
Malaysian palm oil prices were up 5 ringgit at 2,649 (basis October) at midsession looking for its biggest monthly jump in seven months.
U.S. Weather Forecast
Showers and thunderstorms will bring moderate rainfall to central/southern sections of the Midwest over the next 5 days.
The 6 to 10 day forecast for the Midwest still has limited rains for most of the region with any rainfall favoring southern/eastern sections of the Midwest; temps run below average over the next 10 days.
The 11 to 16 day forecast for the Midwest is mixed with the GFS model showing a bit below average rainfall for the region with temps running below; the European has above average temps and limited rainfall.
The Southern Plains still has light rainfall and moderate coverage for the region over the next 6 to 10 days.
The Delta has light rainfall with good coverage over the next 6 to 10 days.
The player sheet had funds net buyers of 7,000 contracts of SRW Wheat; net sold 14,000 Corn; sold 4,000 Soybeans; net sold 1,000 lots of soymeal, and; bought 2,000 Soyoil.
We estimate Managed Money net short 4,000 contracts of SRW Wheat; short 161,000 Corn; net long 76,000 Soybeans; net short 25,000 lots of Soymeal, and; long 34,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 2,300 contracts; HRW Wheat down 2,000; Corn up 20,600; Soybeans down 3,900 contracts; Soymeal up 2,200 lots, and; Soyoil up 6,200.
There were no changes in registrations—Registrations total 95 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans ZERO; Soyoil 2,753 lots; Soymeal 511; Rice 174; HRW Wheat 47, and; HRS 1,387.
Tender Activity—Tunisia seeks 75,000t optional-origin wheat—Jordan cancels tender for 120,000t optional-origin wheat—
U.S. ethanol production for the week ended July 24th averaged 958,000 barrels per day (up 5.5% versus a week ago, down 7.1% versus a year ago); stocks totaled 20.3 mil barrels (up 2.4% versus a week ago, down 17.5% versus last year); corn use for the week was 96.1 mil bu (90.9 mil last week) and versus the 101.2 mil bu needed to meet USDA projections.
U.S. agricultural merchant Archer Daniels Midland Co beat expectations for quarterly earnings on Wednesday, as it benefited from higher margins in its grain trading and oilseeds business; the company and its rivals like Bunge Ltd continued to grapple with ripple effects from the coronavirus outbreak, which has rattled global markets and hurt demand for products like ethanol;
With nearly seven months gone, an ambitious $36.5 billion target for Chinese imports of U.S. farm goods this year may not be quite out of reach, but it’s looking like a big, big stretch; by end-May, imports were running behind 2017 levels – rather than 50% ahead as needed – and while orders for China’s main farm import, soybeans, have started to pick up, scorching levels of buying would be needed to hit the mark; add in a rapid deterioration in U.S.-China relations, an upcoming U.S. election, a global pandemic and questions over just how much soybeans China actually needs, and farmers and analysts say it may be a stretch too far.
Wire story reports exporters in the United States will have a busy start to the upcoming marketing year after the record or near-record soybean and corn sales this month, though they will have to keep an eye on shipments out of Brazil, which will continue to compete with U.S. supplies well into next year; the South American country is the No. 1 exporter of soybeans and in the top three in corn; Brazil’s soy supplies should soon be winding down to give way to U.S. exports, though next month’s shipments may be at least average or above.
Brazil soy export industry group Anec this week reduced its forecast for July soybean and corn exports, but the numbers remain strong; Anec sees this month’s corn shipments at 5.4 million tons, shy of last July’s record of 5.9 million, but easily second-best.
The next three months are usually Brazil’s biggest corn shipping months. Last year’s August-October volume reached a new high of nearly 20 million tons, though this year’s total exports are seen lighter than in the previous year.
Anec pegs July soybean exports at 8.4 million tons, well short of 2018’s record of 10.2 million; that would place exports since February, when the new harvest began arriving at ports in earnest, at 67.4 million tons, some 23% more than 2018’s high for the period.
Brazilian meat processor BRF SA said that Chinese customs authority GACC had suspended chicken exports from its Dourados plant, in the Center-Western state of Mato Grosso do Sul, over COVID-19 concerns; Dourados is the second BRF plant suspended by China after the pandemic began to ravage Brazilian meat plants; the other is a pork facility in Lajeado, in Brazil’s southernmost state of Rio Grande do Sul.
Argentina will harvest less wheat and corn this season than previously estimated, the local representative of the U.S. Department of Agriculture said; wheat production in the 2020/21 crop year is forecast at 20 million tons versus the 21 million tons estimate given in the USDA World Agricultural Supply and Demand Estimates (WASDE) report.
The season’s corn crop estimate was cut to 47.6 million tons from 50 million tons.
Economic stresses within the farm sector are strengthening a risk-averse environment for planting decisions; Argentina is headed toward a deep recession this year as the economy gets hammered by a lockdown against the coronavirus pandemic that started on March 20.
Argentina is nearing an initial agreement with China that could pave for the way for potential investments by the Asian giant in local pork production for export, Argentina’s undersecretary of trade and investment promotion said; that could eventually lead to Chinese-backed hog farms in the South American nation more famed for its cattle-rearing grasslands, at a time when Beijing is looking to diversify pork supply after domestic farms were hit hard by African swine flu.
Russian agriculture consultancy SovEcon said that it had reduced its forecast for Russia’s 2020 wheat crop by 400,000 tons to 79.3 million tons as dry weather is worsening conditions for spring wheat.
European wheat prices rose on Wednesday in the wake of strong U.S. markets and cuts in the French wheat crop outlook though gains were capped by a strengthening euro which hampers its competitiveness on export markets; front month September milling wheat was 0.7% higher at 182.00 euros a ton.
South Africa will likely harvest 15.545 million tons of maize in 2020, slightly higher than the previous month’s estimate, after favorable weather conditions and higher yields in the Free State and Gauteng provinces, the government’s Crop Estimates Committee (CEC) said; giving its sixth production forecast for the 2020 crop, the CEC estimated that harvest would be 38% higher compared with 11.275 million tons harvested in the previous year when yields were impacted by dry weather conditions; the latest forecast is just higher than the CEC’s June estimate of 15.514 million tons.
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.