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Global Ag News Headlines for May 6

By ADMIS Research Team

Overnight trade has SRW down roughly 4 cents, HRW down 5; HRS Wheat down 1, Corn is up 1 cent; Soybeans up 2, Soymeal up $2.00, and Soyoil down 25 points.

Chinese Ag futures (Sep) settled down 25 yuan in Soybeans, up 12 in Corn, up 21 in Soymeal, down 54 in Soyoil, and down 74 in Palm Oil.

Malaysian palm oil prices were up 3 ringgit at 1,978 (basis July) at midsession tracking a jump in crude.

U.S. Weather Forecast

Freezes will occur in portions of the Corn Belt Friday through May 13 before conditions notably warm up; Minnesota, Wisconsin, Michigan, Ohio, northeastern Indiana, northern Illinois, and northeastern Iowa will likely be coldest in general; though, harder freezes will occur in Wisconsin and northern Michigan in the morning Saturday and possibly next Tuesday

Pockets of light freezes in northern hard red winter wheat areas, such as Nebraska and northeastern Colorado, will burn back vegetative growth but is unlikely to cause permanent damage

South America Weather Forecast

Some shower and thunderstorm activity will occur in second season corn and cotton production areas of Brazil tonight and Wednesday; the rain will likely be greatest in western Mato Grosso do Sul and southwestern Mato Grosso; more rain will be needed; the lack of significant moisture from this event in Sao Paulo, northern Parana, and eastern Mato Grosso do Sul will likely lead to a continuation of crop stress; though, there will be at least some rain that occurs

The player sheet had funds net buyers of 2,000 contracts of SRW Wheat; net bought 1,000 Corn; were net even in Soybeans; net even in Soymeal, and; net even in Soyoil.

We estimate Managed Money net long 14,000 contracts of SRW Wheat; net short 152,000 Corn; net long 8,000 in Soybeans; net short 7,000 lots of Soymeal, and; net short 8,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures up roughly 2,400 contracts; HRW Wheat up 890; Corn up 1,200; Soybeans down 210 contracts; Soymeal up 1,100 lots, and; Soyoil up 810.

Deliveries were 4 Soymeal; 180 Soyoil; 27 Rice; ZERO Corn; ZERO HRW Wheat; ZERO Oats; ZERO Soybeans; ZERO SRW, and; 2 HRS.

There were changes in registrations (Corn down 136; Rice down 4; HRS Wheat down 192)—Registrations total 11 contracts for SRW Wheat; ZERO Oats; Corn 87; Soybeans 1; Soyoil 3,550 lots; Soymeal 547; Rice 304; HRW Wheat 10, and; HRS Wheat 490 contracts.

TODAY—WEEKLY ETHANOL STATS— 

Tender Activity—S. Korea bought 138,000t optional-origin corn—S. Korea bought 60,000t South American soymeal—

Worries about coronavirus’s effect on agricultural supply chains and consumer buying habits has farmer sentiment at a three-year low, according to the latest data put out by Purdue University and CME Group; the Ag Barometer, a study of farmer sentiment done by the two groups, shows over half of farmers surveyed are worried about Covid-19’s effect on their profitability, and 54% of farmers expect to apply for federal Covid-19 assistance programs; this comes as the USDA reports the spring corn crop is over half-planted as of late yesterday, a much-faster pace than last year’s waterlogged planting season

The ethanol industry meltdown will push more acres into soybeans this year as plant slowdowns and closures leave farmers with fewer options to market their corn, Mosaic CEO says; a recent wave of US ethanol plant closures is in part the result of stay-at-home orders that have kept American drivers off roads, slashing demand for the corn-based fuel that’s blended into gasoline; reduced ethanol demand could affect some 5M acres of corn, with US farmers planting more soybeans this spring instead.

A group of Oklahoma crop experts on Tuesday projected Oklahoma’s 2020 winter wheat harvest at 96.524 million bushels, with an average yield of 33.16 bushels per acre, following an annual tour of the state

—Oklahoma produced 110 million bushels of winter wheat in 2019, according to the U.S. Department of Agriculture; the USDA is scheduled to release its first official 2020 crop estimates on May 12

The U.S. trade deficit widened in March as the economic shock related to the global coronavirus pandemic held down both imports and exports; the deficit rose 11.6% to a seasonally adjusted $44.4 billion in March from $39.8 billion in February, snapping two months of declines, the Commerce Department said Tuesday

—imports declined 6.2% to $232.2 billion in March, the lowest figure since October 2016

—exports were down 9.6% to $187.7 billion, the lowest since November 2016.

Meatpackers and livestock producers in the United States have spent at least a year adjusting to the surge in business to China, which has faced a severe pork shortage in the wake of its battle against African swine fever; but now, as the United States is on the brink of its own meat crisis due to the coronavirus pandemic, American pork supplies are being shipped off to China at a breakneck pace, creating the perfect recipe for additional U.S.-China tensions

Tyson Foods will resume limited production at its largest U.S. pork plant this week, the company said late on Tuesday; Tyson Fresh Meats, the beef and pork subsidiary of Tyson Foods, had indefinitely suspended operations at the Waterloo, Iowa plant on April 22 to contain the rapid spread of the coronavirus.

Plant-based burger maker Beyond Meat plans to offer large value packs and discounts to some U.S. retailers this summer, hoping to grab a greater share of the market as prices for beef rise amid production disruptions caused by the coronavirus pandemic; the value packs, which will be frozen, and the greater-than-normal discounts are aimed at narrowing the price gap between Beyond’s plant-based burgers and beef, an issue some financial analysts see as slowing widespread adoption of Beyond’s burgers.

Canada will invest C$252 million ($179.5 million) to help some of the country’s farm and food processing sectors weather the coronavirus outbreak, Prime Minister Justin Trudeau said, adding more money could come later if needed; the Canadian Federation of Agriculture, one of Canada’s biggest farm groups, asked Ottawa last week for an initial C$2.6 billion in emergency funding to help the farming and food sector cover losses and additional costs caused by the pandemic.

Canada offered Tuesday financial help to the country’s farmers and food processors, although the pledge represents about 10% of what the agricultural lobby said was required to avert widespread bankruptcies in the sector

Brazilian corn farmers hoping for relief from drought were disappointed by weaker than expected rains this week, while frost expected in the state of Parana could bring further losses, weather forecasters said on Tuesday.

—Much of the center-south of Brazil received below average rains in the past 30 days, a critical period for growing the country’s second annual crop of corn that accounts for about three-quarters of the country’s output

Soy exports in Brazil could reach 11.9 million tons in May, based on embarkations that are scheduled or have already taken place, industry association Anec said in a Tuesday statement; that would be below the record 14 million tons exported in April, but still high by historical standards.

Argentine farmers are expected to harvest a record 21 million tons of wheat in the 2020/21 season, the Buenos Aires Grains Exchange said

Argentine biodiesel exports have ground to a complete halt due to the coronavirus pandemic hammering demand in Europe; last year, biodiesel exports amounted to around 1 million tons worth $775 million; the top destination was the European Union, which has quotas for blending petrol with biodiesel; the drop in fuel consumption there during the pandemic has paralyzed the Argentine biodiesel industry, which has generated up to around $1.7 billion in yearly revenue.

As of May 4, Ukrainian farmers completed sowing of early spring crops, field work was carried out on an area of 11.2 million hectares, which is 72% of the sowing forecast (15.5 million ha) and started sowing later crops

—Ukraine will agree an export cap with traders for the 2020/21 season in July, the Economy Minister said, aiming for a balance between food security and foreign currency earnings.

The European Union has increased its import duty for maize (corn) to 10.40 euros ($11.25) per ton from 5.27 euros, the bloc announced in its official journal; the new tariff, which took effect on May 5, will also apply to rye and sorghum imports; the bloc had re-introduced an import duty on April 27 after a slump in U.S. prices to a 10-year low, ending a period of zero tariffs for maize coming into the EU.

French soft wheat shipments outside the EU last month reached a four-year high for April as exporters continued to ship high volumes during the coronavirus pandemic; soft wheat exports to destinations outside the European Union totaled 1.56 million tons, the highest April volume since the 2015/16 season; the April volume was about 70,000 tons lower than non-EU soft wheat exports the previous month, which marked the highest monthly total so far in the 2019/20 July-June season

Romania’s wheat crop has been affected by prolonged drought, and an estimate of the overall damage could be available as early as next week

Saudi Arabia has allocated 2 billion riyals ($533.3 million) to fund importing agriculture products and secure food supplies amid coronavirus fears, the country’s agriculture development fund said on Tuesday; the initiative, which will be carried out through a mixture of direct and indirect loans, will target in its first phase products including rice, sugar, soybeans and yellow corn; other products will be added according to market needs and for food security

India’s edible oil imports fell 34% to 790,377 tons in April due to logistical difficulties, including delays in the discharge of imported oils, triggered by the coronavirus lockdown

—Imports between November, when the current marketing year began, and April fell 14% to 6.18 million tons

Global demand for palm oil, the world’s most widely-used vegetable oil, may have bottomed out after being hammered by the coronavirus pandemic and is now set for a slow recovery, state agency and industry body the Malaysian Palm Oil Council (MPOC) said; the outbreak of the coronavirus has shut restaurants and limited travel, hitting demand for palm oil used mainly in food but also in renewable fuel; I think the lows for demand have been reached; we are more positive that demand will slowly show an upward trend

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.

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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