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Global Ag News Headlines July 17


Overnight trade has SRW unchanged, HRW down 2; HRS Wheat unchanged, Corn is up 3 cents; Soybeans up 4, Soymeal unchanged, and Soyoil up 40 points.

For the week, SRW Wheat prices are up roughly 1 cent; HRW down 6; HRS down 9; Corn is down 4 cents; Soybeans up 5; Soymeal down $6.00, and; Soyoil up 145 points. Crushing margins are down 2 at 85 cents; Oil share up 1% at 33%.

Chinese Ag futures (Sep) settled down 21 yuan, up 2 in Corn, up 15 in Soymeal, up 104 in Soyoil, and up 70 in Palm Oil.

Malaysian palm oil prices were up 56 ringgit at 2,576 (basis October) at midsession looking at strong weekly gains and supported today by concerns over heavy rains in Malaysia, Indonesia, and China affecting supply.

U.S. Weather Forecast

Enough rain is expected in a majority of the Corn Belt the next two weeks for favorable crop development; though, there will continue to be pockets that are drier than preferred with some crop stress. Last evening’s GFS model run added meaningful moisture into the eastern and northern Corn Belt July 26 – 28.

Last evening’s GFS model run was notably drier in many U.S. crop areas east of the Rocky Mountains (though, it was also drier in New Mexico) July 29 – 31. The decreases were partially due to an overdone cool and dry air mass shown to shift down into the southeastern states and then stall.

The player sheet had funds net sellers of 12,000 contracts of SRW Wheat; net bought 15,000 Corn; bought 7,000 Soybeans; net bought 1,000 lots of soymeal, and; bought 5,000 Soyoil.

We estimate Managed Money net short 3,000 contracts of SRW Wheat; short 175,000 Corn; net long 97,000 Soybeans; net short 28,000 lots of Soymeal, and; long 22,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures down roughly 9,200 contracts; HRW Wheat up 2,100; Corn down 12,100; Soybeans up 990 contracts; Soymeal up 5,600 lots, and; Soyoil up 8,800.

There were no changes in registrations—Registrations total 95 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans ZERO; Soyoil 2,981 lots; Soymeal 511; Rice 260; HRW Wheat 47, and; HRS 1,387. 

Tender Activity—Japan bought 125,957t U.S./Canadian/Australian wheat—S. Korea bought 60,000t optional-origin corn; bought 138,000t corn thought to be either South American or South African origin–

China’s been buying wheat recently with reports of 7 cargoes of Australian wheat and several cargoes of U.S. wheat, says senior Asia commodity analyst at StoneX; the combination of these wheat purchases shortly after harvest, along with the recent large purchases, makes me think China is ensuring it fills the tariff rate quotas it set this year; notes that last year it bought just 33% of the quota; adds he doesn’t see anything that indicates China needs to dramatically increase wheat imports due to some market condition within China so it suggests China could be making a deliberate effort to fill the quotas this year to show the extent of its reforms.

There has been a flurry of farm commodity sales reported in recent days; since Friday, the USDA has reported 3.259 million tons in U.S. corn purchases by China along with 1.04 million tons of soybeans and 320,000 tons of hard wheat; China said it will stick to the Phase 1 trade deal it reached with the United States earlier this year but warned that it will respond to “bullying” tactics from Washington, as relations continue to deteriorate; but China would need to dramatically ramp up buying of U.S. farm products in the coming months to fulfill its Phase 1 commitment to import $36.5 billion in the first year of the deal, signed in January; U.S. government data shows that China imported just over $6 billion worth of U.S. farm goods from January to May.

For the week ended July 9th, U.S. All Wheat sales are running 6% ahead of a year ago, shipments unchanged with the USDA forecasting a 2% decline on the year

For the week ended July 9th, U.S. Corn sales are running 12% behind a year ago, shipments 19% behind with the USDA forecasting a 14% decline.

For the week ended July 9th,U.S. Soybean sales are running 5% behind a year ago, shipments down 3% with the USDA forecasting a 6% decline on the year

A knock to food consumption in a global recession triggered by a coronavirus epidemic could produce a “market shock” of tumbling agricultural prices, the U.N.’s food agency and the OECD said; with food production mostly maintained during the crisis, agricultural markets were facing the risk of swelling stockpiles that would weigh on prices; the macroeconomic shocks induced by the COVID-19 pandemic are expected to put downward pressure on agricultural commodity prices, adding there was potential for “a historically significant market shock” this year; the impact on vegetable oil and animal-based products would be greater than for staple crops like rice and wheat.

The United States generated more renewable fuel blending credits in June than in May, the Environmental Protection Agency said; about 1.07 billion ethanol (D6) blending credits were generated in June, up from 841 million in May; about 387 million biodiesel (D4) blending credits were generated last month, up 370 million the month prior.

Saskatchewan crop report

Warm weather and rainfall this week continued to support crop development; currently, 86 per cent of the fall cereals, 75 per cent of the spring cereals, 70 per cent of the oilseed crops and 82 per cent of the pulse crops are at a normal stage of development for this time of year; the majority of crops this week are in fair to excellent condition

The summer grain output in China’s major food-producing province Henan reached a historic high of 37.5 billion kg this year, according to the Henan Survey Organization National Bureau of Statistics Information Network; the figure is 83.5 million kg or 0.2 percent higher than last year.

Brazilian soybean farmers are expected to expand planted area to ​​over 38 million hectares (93.9 million acres) in the season that will kick off in mid-September as demand for the oilseeds remains strong, agribusiness consultancy StoneX said; in the 2019/2020 harvest, Brazil sowed about 37 million hectares (91 million acres) with soybeans, according to government data, resulting in a record harvest of 120.9 million tons of Brazil’s most wanted export commodity; the record output came in spite of a drought in Rio Grande do Sul state.

A fifth of EU soy imports from Brazil may come from land illegally deforested, according to a study released that offers a detailed inventory of farms in the supply chain; that research, published in the journal Science, also opens the door for both international companies and Brazilian law enforcement to pinpoint specific farms violating rules against Amazon deforestation.

Russia saw unfavorable weather in the first half of July for its spring grains and may face a downgrade of its 2020 grain harvest estimates, the head of science at Russia’s Hydrometcentre said; Russia’s agriculture ministry on July 10 kept its forecast for the 2020 grain harvest unchanged – at 122.5 million tons, including 75 million tons of wheat; IKAR and SovEcon, the two leading agriculture consultancies in Moscow, downgraded their estimates for wheat earlier this week due to low yields in southern regions – to 76.5 million tons and 79.7 million tons, respectively.

Consultancy Strategie Grains further reduced its forecast for this year’s soft wheat harvest in the European Union to take account of lower-than-expected yields in southeastern Europe and a cut in estimated crop area in France; in its monthly cereal report, the French firm lowered its 2020 soft wheat output forecast for the EU plus Britain to 130.3 million tons from 130.9 million in June, or 11.5% below last year’s harvest

The latest harvest cut led Strategie Grains to trim its EU soft wheat export forecast for the 2020/21 season that started this month to 25.3 million tons from 26.1 million previously.

In contrast, Strategie Grains increased its estimate for the EU maize harvest by nearly 1 million tons this month to 66.6 million tons, now 3.7% above last year’s crop, because soil moisture improved significantly in June

French farmers had harvested 47% of this year’s soft wheat crop by July 13, up from 11% a week earlier, farm office FranceAgriMer said; the harvest pace was faster than last year when 26% of the crop had been gathered by the same week.

Euronext wheat fell on Thursday as Chicago futures retreated from a surge the day before, with traders seeking confirmation of rumored sales of U.S. wheat to China and a clearer picture of an uneven harvest in Europe; September milling wheat settled 1.50 euros, or 0.8%, lower at 185.75 euros ($212.07) a ton.

Belarus is likely to increase its grain harvest to no less than 8.2 million tons this year from 7.33 million tons in 2019 thanks to better weather conditions, the country’s agriculture ministry said

Egypt’s strategic wheat reserves are sufficient for 5.5 months, the Supply Ministry said, according to a report by state news agency MENA

Asian palm oil producers, long at loggerheads with the European Union over curbs on imports of the edible oil, have offered to “work together” with the European Commission in drafting rules for the EU’s latest ‘Farm to Fork’ food supply policy; the EU, a major palm importer, has already decided to phase out palm-based transport fuels from its renewable energy sector by 2030, citing the environmental impact of the oil’s production, and is expected to set new limits on food contaminant 3-MCPD esters, found in refined fats and oils.

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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