by ADMIS Research Team
Overnight trade has SRW down roughly 2 cents, HRW down 3; HRS Wheat down 2, Corn is down 4 cents; Soybeans down 7, Soymeal down $1.00, and Soyoil down 70 points.
Chinese Ag futures (Sep) settled down 75 yuan in Soybeans, down 10 in Corn, down 15 in Soymeal, down 158 in Soyoil, and down 170 in Palm Oil.
Malaysian palm oil prices were down 94 ringgit at 2,138 (basis July) at midsession over crude oil price declines, ongoing virus concerns over demand, and palm oil stocks pushing up.
U.S. Weather Forecast
Another round of significant rain and severe thunderstorms will impact the Delta and southeastern states Wednesday into Thursday; this will lead to more flooding and fieldwork delays.
Occasional rain in the Corn Belt the next ten days is still expected to keep fieldwork a little slow; last night’s GFS model run was notably aggressive with rainfall in Illinois Friday into Saturday
Last night’s GFS model run showed significant rainfall in Montana and the Dakotas May 3 – 5.
South America Weather Forecast
Last night’s GFS model run showed little to no change with the expected round of rain in Argentina Apr. 24 – 28; the rain will cause some disruption to fieldwork but will also benefit immature late season crops
Some rain likely to shift into at least part of southern Brazil gradually Apr. 27 – May 2; model run suggested an area of meaningful rain moves as far north as Rio de Janeiro, southern Minas Gerais, and northeastern Sao Paulo Apr. 30 – May 2
—reproduction for late Safrinha corn is still several weeks away and a couple of well-timed rain events will be needed to protect soil moisture and ensure the best yield potentials; southern and some east-central parts of Brazil are expected to be dry or mostly dry through the end of April suggesting topsoil moisture will be rated very short at the beginning of May; subsoil moisture may be in a steady decline at that time as well putting much pressure on rainfall in early to mid-May
Black Sea/Europe region
Weather outlook in most production regions is unchanged
The player sheet had funds net buyers of 10,000 contracts of SRW Wheat; net sold 22,000 Corn; net sold 5,000 contracts of Soybeans; net sold 2,000 Soymeal, and; sold 3,000 Soyoil.
We estimate Managed Money net long 27,000 contracts of SRW Wheat; net short 163,000 Corn; net short 3,000 contracts of Soybeans; net long 5,000 lots of Soymeal, and; net short 10,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 3,300 contracts; HRW Wheat up 2,900; Corn up 13,000; Soybeans up 7,100 contracts; Soymeal up 545 lots, and; Soyoil down 5,300.
There were changes in registrations (Rice down 30)—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 DELIVERABLE STOCKS—-
Tender Activity—Japan seeks 115,000t optional-origin wheat—S. Korea seeks 207,000t optional-origin corn—
The U.S. Department of Agriculture said U.S. farmers were able to plant 7% of their intended corn acres as of Sunday, matching the average of analyst estimates in a Reuters poll
—Corn planting progress was up from 3% a week earlier but lagged the five-year average of 9%; the range was from 5% to 12%
—U.S. farmers planted 2% of their intended soybean acreage by Sunday, in line with the soybean estimate in the Reuters poll and just ahead of the five-year average of 1%
—The USDA rated 57% of the winter wheat crop in good to excellent condition, a drop from 62% the previous week; survey on average had expected a smaller decline of one percentage point, while their estimates had ranged from 59% to 64% good to excellent
—Spring wheat, the USDA said the crop was 7% planted, lagging the five-year average of 18%, and behind the average of analyst expectations at 11%
Yesterday’s U.S. weekly export inspections had
—Wheat exports running 6% ahead of a year ago (8% last week) with the USDA currently forecasting a 5% increase on the year
—Corn 36% behind a year ago (36% last week) with the USDA down 16% for the season
—Soybeans 6% ahead of a year ago (up 6% last week) with the USDA having a 2% increase forecasted on the year
When it’s all said and done, the ethanol industry could see about $10 billion in losses as a result of the COVID-19 economic stall this year, according to a new analysis released Monday by a leading ethanol advocacy group; Friday evening, USDA announced some $19 billion in relief funds directed to a number of agriculture sectors — ethanol was not on that list; that’s despite 73 ethanol plants now idled and production cuts made at 70 more plants in the past several weeks
An increasing number of U.S. ethanol plants trying to survive a drop in fuel demand brought on by the coronavirus outbreak have turned to making a product for which demand is soaring: hand sanitizer; at least two dozen producers of the corn-based fuel have switched some of their output to produce a high grade of alcohol required for hand sanitizer since late March, the head of the Renewable Fuels Association said
After enduring extended trade disputes and worker shortages, U.S. hog farmers were poised to finally hit it big this year with expectations of climbing prices amid soaring domestic and foreign demand; instead, restaurant closures due to the coronavirus have contributed to an estimated $5 billion in losses for the industry, and almost overnight millions of hogs stacking up on farms now have little value.
One of Canada’s largest slaughterhouses is halting operations after hundreds of people connected to the facility were infected with the novel coronavirus and one died from COVID-19, marking the first major shutdown in the country’s food supply chain; Cargill Ltd. on Monday said it is temporarily closing its meat-processing plant in High River, Alta; the facility churns out roughly 40 per cent of Western Canada’s processed beef and is a key part of the province’s agriculture industry
Tyson Foods Inc. said its beef and pork subsidiary, Tyson Fresh Meats, will resume limited operations at its pork plant in Columbus Junction, Iowa, on Tuesday after being idle for two weeks due to the COVID-19 concerns; the company plans to increase production at Columbus Junction gradually, with the safety of its team members top of mind
China’s pork supply will be under pressure in the second quarter and prices may peak around September due to the impact of the African swine fever that decimated its herd, an agriculture ministry official said; supplies will be under pressure because of a low production base, uncertainty in imports and recovering consumption
Brazilian farmers had finished harvesting on 92% of the area planted with soybeans as of April 16, according to agricultural consultancy AgRural; that was slightly ahead of the 91% five-year average for the date
—Rains last week helped the winter corn crop planted in the states of Mato Grosso do Sul, Parana and Sao Paulo; the dry weather in parts of the country last month led the consultancy to cut its forecast for the winter corn crop in Brazil’s center-south states to 67.9M metric tons for the current growing season, from the previous forecast of 69.2M tons
Brazilian grains producer Terra Santa Agro SA is considering selling part of its land to reduce debt; Terra Santa has noticed higher demand for land acquisitions by farmers, and may seize the opportunity to increase its liquidity
—the devaluation of the local real currency against the dollar made Brazilian corn and soy producers more competitive than their U.S. rivals; the U.S. currency reached an all time high on Monday, of 5.31 reais per dollar
—Terra Santa aims to keep areas reserved for soy and corn and increase the cotton areas, where profitability is higher; the company expects to sell up to 75% of its corn and soy 2020-21 crops over the next weeks
Brazilian chicken production fell in the first quarter, according to a meat lobby group, while an industry source said some poultry producers were already making moves to further cut future output; preliminary data indicates “a slight reduction” in Brazilian chicken output in the first three months of the year, as the new coronavirus outbreak has dragged on the domestic market
Russian wheat export prices rose last week due to concerns about supply after mid-May when officials expect the country’s April-June export quota to be depleted; Russia will suspend grain exports until July 1 once its quota of 7 million tons is exhausted, now likely to happen in mid-May, the agriculture ministry said
—Russian wheat with 12.5% protein content loaded from Black Sea ports and for the nearest delivery was up $6 to $231 a ton free on board (FOB) at the end of last week, SovEcon said
—IKAR, another Moscow agriculture consultancy, pegged wheat at $232 a ton, up $5; prices for the new crop, which is due to arrive this summer, and delivery in late July fell by $3 to 199 a ton
—Russia’s online calculator that as of Monday only 4.0 million tons of grain remained available for export from the quota
—There is no need to limit exports from Russia of grain from the new harvest, as harvest forecasts are quite good, the Russia Grain Union president said’ we see no need for export restrictions in the coming season [beginning July 1, 2020]
—Dry weather is persisting in Russia’s southern regions, the country’s main area for wheat production and exports, analysts said , with one of them, IKAR, downgrading its forecast for the 2020 crop; rains are expected to arrive to those regions soon and could yet improve the situation for the crop from the world’s largest wheat exporter; the crop is still expected to be higher than in 2019; IKAR cut its forecast for Russia’s 2020 wheat crop to 77.2 million tons from 79.5 million tons
The European Commission on Monday forecast usable production of common wheat, or soft wheat, for the European Union’s 27 countries in 2020/21 at 126.1 million tons, down from 130.9 mln t in 2019/20.
—In its first production forecasts for next season, the Commission projected EU-27 usable production of barley in 2020/21 at 54.3 mln t, down from 55.1 mln t in 2019/20
—EU-27 usable production of maize in 2020/21 was pegged at 69.3 mln t, down from 70.0 mln t in 2019/20
—In oilseeds, the Commission forecast EU-27 production of rapeseed at 16.7 mln t, up from 14.9 mln t in 2019/20
Soft wheat exports from the European Union in the 2019/20 season that started last July had reached 27.16 million tons by April 19, official EU data showed; that was 63% above the volume cleared by April 14 last year
—EU 2019/20 barley exports had reached 6.03 million tons, up 62% from the year-earlier period,
—EU 2019/20 maize imports stood at 16.55 million tons, down 17%
European Union soybean imports in the 2019/20 season that started last July had reached 11.50 million tons by April 19, official EU data showed; that was 4% below the volume cleared by April 14 last year
—EU rapeseed imports in 2019/20 had reached 5.13 million tons, up 45% versus the year-earlier period
—Soymeal imports so far in 2019/20 were at 14.27 million tons, up 3%
—Palm oil imports stood at 4.48 million tons, down 15%
(The Commission is continuing to include Britain in its crop export and import data during the transition period following Britain’s exit from the bloc)
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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.