Global Ag News Headlines Apr 22

by ADMIS Research Team

Overnight trade has SRW down roughly 5 cents, HRW down 6; HRS Wheat down 1, Corn is up 1 cent; Soybeans up 3, Soymeal up $1.00, and Soyoil up 10 points.

Chinese Ag futures (Sep) settled up 10 yuan in Soybeans, up 5 in Corn, up 24 in Soymeal, up 16 in Soyoil, and down 66 in Palm Oil.

Malaysian palm oil prices were up 12 ringgit at 2,076 (basis July) in limited trade.

U.S. Weather Forecast: Another round of significant rain and thunderstorm activity with severe weather is still expected Wednesday into Thursday in the Delta and southeastern states. Rain in the Corn Belt will be frequent enough and significant enough in the next seven days to promote more fieldwork delays as well, especially in central and southern parts of the region. Significant rain tonight into Wednesday is still expected in southern Kansas, the Oklahoma Panhandle, and northern part of the Texas Panhandle which will lead to a notable improvement in soil moisture.

South America Weather Forecast: Last night’s GFS model run still showed little to no change with the expected round of meaningful rainfall in Argentina Friday through next Tuesday. Fieldwork delays will occur as a result of this rain. A dry-bias will continue in much of southern Brazil through next Tuesday, with the exception of rain in Rio Grande do Sul Monday and Tuesday; timely rain will be needed in more of the south due to concern for reproductive conditions in May. Some erratic shower and thunderstorm activity will be possible in more of southern Brazil in the first week of May

Black Sea/Europe region: Last night’s GFS model run kept the same general theme of weather in the first ten days of the outlook across Europe and the western CIS. Overall, none of the rain advertised in Eastern Europe or the western CIS in the next two weeks will seriously bolster soil moisture or change the level of concern for crops in the region that did not establish well last autumn and are still trending dry.

The player sheet had funds net sellers of 2,000 contracts of SRW Wheat; net sold 16,000 Corn; net bought 3,000 contracts of Soybeans; net bought 2,000 Soymeal, and; sold 6,000 Soyoil.

We estimate Managed Money net long 25,000 contracts of SRW Wheat; net short 179,000 Corn; net even in Soybeans; net long 7,000 lots of Soymeal, and; net short 16,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures down roughly 4,200 contracts; HRW Wheat down 2,000; Corn down 4,300; Soybeans up 2,700 contracts; Soymeal down 4,700 lots, and; Soyoil down 3,500.

There were no changes in registrations—Registrations total 11 contracts for SRW Wheat; ZERO Oats; Corn 3; Soybeans 1; Soyoil 2,668 lots; Soymeal 564; Rice 267; HRW Wheat 10, and; HRS Wheat 821 contracts

TODAY—WEEKLY ETHANOL STATS—-COLD STORAGE—

Tender Activity—Jordan passed on a 120,000t optional-origin wheat tender—Taiwan bought 117,000t Brazil, S. African corn—S. Korea feed groups bought 69,000t optional-origin corn; bought 58,000t optional-origin corn (mostly seen to be South American)—

Agriculture and food ministers from the Group of 20 countries agreed at a virtual meeting on Tuesday that emergency measures to stop the spread of the new coronavirus must not upend global food supply chains; their extraordinary meeting came as coronavirus lockdowns across the world slow global food supply chains, leaving some farmers unable to get their produce to consumers and major producing countries restricting exports.

Agricultural commodities trader Bunge said it will sell 35 of its interior U.S. grain elevators to Zen-Noh Grain Corporation, dramatically reducing its grain origination network in the United States.

Teucrium Corn Fund (NYSEARCA:CORN) was the target of unusually large options trading on Tuesday; stock traders acquired 4,548 call options on the stock; this represents an increase of approximately 1,100% compared to the typical volume of 379 call options.

As people stay home, Earth turns wilder and cleaner; an unplanned grand experiment is changing Earth; as people across the globe stay home to stop the spread of the new coronavirus, the air has cleaned up, albeit temporarily; smog stopped choking New Delhi, one of the most polluted cities in the world, and India’s getting views of sights not visible in decades; nitrogen dioxide pollution in the northeastern United States is down 30%; Rome air pollution levels from mid-March to mid-April were down 49% from a year ago; stars seems more visible at night.

Prime Minister Justin Trudeau is downplaying the possibility of food shortages, but warns the temporary closure of a major slaughterhouse in Alberta could drive up beef prices amid the COVID-19 pandemic; speaking to reporters, Trudeau said the federal government is keeping close watch over strains to the Canadian food system as the novel coronavirus infects workers at slaughterhouses.

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

ASF (African swine fever) has devastated China’s swine industry since August 2018

—Despite low official reported cases of ASF and robust recovery efforts in the second half of 2019, overall swine production and slaughter will remain depressed in 2020

—Further complicating matters is the coronavirus outbreak in China, but it is likely that there will be sufficient market incentive and political stimulus to push forward with recovery efforts

— As a result, the 2020 ending hog inventory is expected to increase slightly from 2019 as the decline bottoms out

—With low pork production in 2020 resulting in high pork prices, many Chinese consumers will seek out beef as an alternative protein

—While elevated beef prices will spur some larger facilities to increase cattle production, most smaller facilities will be cautious in the face of uncertain pork prices and rising input costs

—Overall, cattle ending inventories are expected to remain basically flat through 2020

—The majority of increased beef demand will be satisfied by imports.

Although record harvests are still expected, dry weather has prevented Brazil’s current corn and soybean crops from reaching the eye-popping levels that many market analysts believed would be possible; almost all of Brazil’s soybean fields are harvested, but the second-crop corn is still in the vulnerable stages of growth

—Rainfall has been disappointing in some regions, and if the recent dry pattern does not clear, corn output could fall from expectations

—Brazil’s corn exports are already seen dropping from the massive year-ago levels as global competition increases, though reductions in the second corn crop could immediately come out of exports

—Brazilian farmers have been willing sellers of corn this year, but they have been even more aggressive with soybeans, which should help those exports reach new highs.

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

—Post projects a decline of 500,000 hectares in soybean planted area and production of 51 million tons for marketing year 2020/2021 on higher export taxes for soybeans and products

—2019/2020 soybean estimated production is reduced to 51.5 million on late season dry conditions in southern Santa Fe Province.

—2019/2020 soybean projected exports are reduced to 6.5 million tons.

—COVID-19 related transportation bottlenecks are expected to ease through April 2020, but slow farmer selling may reduce crush rate in initial months of marketing year

Dryness in Argentina has helped farmers speed collection of this season’s soy, before heavy rains expected next week cause likely harvesting delays; three weeks of good weather has helped farmers collect soy and corn by making fields firm enough to support heavy harvesting combines; but the dryness has contributed to logistics bottlenecks further down the export chain.

Argentina farmers are expected to plant 6.7 million hectares with 2020/21 wheat, starting in a few weeks, compared with 6.6 million hectares planted with the grain in the 2019/20 crop year, the Buenos Aires Grains Exchange said

G20 agriculture ministers urged that restrictions on food exports during the coronavirus crisis should only be undertaken in emergencies with strict conditions, Germany’s farm ministry said; a virtual meeting of agriculture and food ministers of the Group of 20 was held on Tuesday; G20 farm ministers urged that food export curbs should only be used when they are “proportionate, transparent, temporary and conform to the rules of the World Trade Organization

A senior United Arab Emirates food official urged countries to work together to maintain global food supply chains as coronavirus lockdowns disrupt the food and agriculture industry across the world; the coronavirus crisis is a wake-up call for the whole world – joint action and solidarity are what is needed at this time

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.