Written Commentary
Overnight trade has SRW up roughly 2 cents, HRW up 2; HRS Wheat up 1, Corn is down 4 cents; Soybeans down 5, Soymeal down $1.50, and Soyoil down 10 points.
Chinese Ag futures (Sep) settled down 13 yuan, down 3 in Corn, down 22 in Soymeal, down 10 in Soyoil, and down 2 in Palm Oil.
Malaysian palm oil prices were up 30 ringgit at 2,389 (basis September) at midsession on ideas of tightening Indonesian supplies.
U.S. Weather Forecast
Last evening’s GFS model run showed significant rainfall again in the Corn Belt in the second week of the outlook; however, it was notably wetter in the southern half of the region and notably drier in the northern half compared to the midday run.
The model has likely been overdoing rainfall in the Corn Belt to an extent Jul. 17 – 22; however, occasional thunderstorm complexes are expected due to the northeastern portion of the ridge of high pressure being in the region.
Rainfall may be below average in a large portion of the region; though, there will be pockets that get enough rainfall for favorable crop development and pockets that get missed with increasing crop stress, similar to the first week of the outlook.
The midday European Model run (ECMWF) was also wetter in the second week compared to the previous run for the Corn Belt. This gives better support for areas of meaningful moisture in this timeframe.
Looking at the 11 to 16 day forecast, both models indicate strong ridging bringing limited rainfall and above average temps to the Plains and Midwest
The player sheet had funds net buyers of 1,000 contracts of SRW Wheat; net sold 10,000 Corn; sold 3,000 Soybeans; net sold 2,000 lots of soymeal, and; bought 3,000 Soyoil.
We estimate Managed Money net short 39,000 contracts of SRW Wheat; short 183,000 Corn; net long 80,000 Soybeans; net short 46,000 lots of Soymeal, and; long 8,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 275 contracts; HRW Wheat up 1,600; Corn down 3,900; Soybeans up 2,400 contracts; Soymeal down 3,000 lots, and; Soyoil up 9,500.
Deliveries were ZERO Soymeal; ZERO Soyoil; 11 Rice; ZERO Corn; 33 HRW Wheat; ZERO Oats; ZERO Soybeans; 82 SRW Wheat, and; ZERO HRS Wheat.
There were changes in registrations (Rice down 5)—Registrations total 162 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans ZERO; Soyoil 3,141 lots; Soymeal 511; Rice 11; HRW Wheat 97, and; HRS 1,379.
TODAY—WEEKLY ETHANOL STATS—
Tender Activity—Egypt bought 230,000t Russian wheat—Jordan bought 60,000t optional-origin wheat—Thailand seeks 193,300t optional-origin feed wheat—Egypt seeks 30,000t optional-origin soyoil, 10,000t sunoil—
There are fewer than eight weeks left in the 2019-20 U.S. marketing year, and soybean exports appear more likely to meet the U.S. government’s full-year prediction than those for corn; U.S. corn and soybean exports are seen hitting seven- and six-year lows in 2019-20, respectively, though the exact outcome will be important for setting the starting supply levels for 2020-21, which begins on Sept. 1.
Manitoba crop report – Reuters News
Saturated soils and waterlogged fields are common in the Southwest region from Brandon northward; Fusarium risk maps indicate extreme risk for FHB development in cereals across much of the province; Hay and forage yields have been below normal to date, rains are expected to improve hay and pasture regrowth for a second cut in most of the province
Tightness in China’s corn market and a rise in prices on the Dalian Commodity Exchange close to a five-year high support global corn prices, Societe Generale says; the bank adds that the Chinese government plans to sell 4 million metric tons of corn from state reserves to balance the market, which faces strong demand from the Chinese lean hog industry as it recovers from African swine fever; the Dalian Commodity Exchange three-month corn contract is at CNY2,122 a metric ton, up 11% on year.
Brazil trade body revises up July soybean, corn export forecasts – Reuters
- BRAZIL JULY SOY EXPORTS ESTIMATED AT CLOSE TO 8 MILLION TONNES UP FROM PREVIOUS ESTIMATE OF 7.25 MILLION TONNES -ANEC INDUSTRY BODY
- BRAZIL JULY CORN EXPORTS ESTIMATED AT 5.16 MILLION TONNES, UP FROM PREVIOUS ESTIMATE OF 3.9 MILLION TONNES -ANEC
IKAR, one of Russia’s leading agriculture consultancies, said that it had downgraded its estimate for the Russian 2020 grain crop by 2 million tons to 126 million tons due to low yields in part of the country’s southern and central regions; its forecast for Russia’s 2020 wheat crop was cut by 1.5 million tons to 78 million tons.
EU 2019/20 SOFT WHEAT EXPORTS 34.60 MLN T BY JUNE 30 VS YEAR-EARLIER 20.62 MLN T – OFFICIAL DATA
EU 2019/20 BARLEY EXPORTS 7.54 MLN T BY JUNE 30 VS YEAR-EARLIER 4.64 MLN T
EU 2019/20 MAIZE IMPORTS 19.52 MLN T BY JUNE 30 VS YEAR-EARLIER 24.06 MLN T
EU 2019/20 SOYBEAN IMPORTS 15.36 MLN T BY JUNE 30 VS YEAR-EARLIER 15.14 MLN T – OFFICIAL DATA
EU 2019/20 RAPESEED IMPORTS 6.01 MLN T BY JUNE 30 VS YEAR-EARLIER 4.23 MLN T
EU 2019/20 SOYMEAL IMPORTS 18.05 MLN T BY JUNE 30 VS YEAR-EARLIER 17.81 MLN T
EU 2019/20 PALM OIL IMPORTS 5.71 MLN T BY JUNE 30 VS YEAR-EARLIER 6.51 MLN T
Farm office FranceAgriMer raised its estimate of French soft wheat exports outside the European Union in the 2019/20 20 season that ended on June 30 to 13.6 million tons from the 13.45 million forecast last month; in its first projections for the 2020/21 season, FranceAgriMer forecast soft wheat shipments outside the EU would fall back sharply to 7.75 million tons
European wheat futures rose to a near four-week high on Tuesday, supported by an official forecast of sharp fall in this year’s harvest in France, the European Union’s biggest wheat supplier; front-month September milling wheat was up 2.0 euros, or 1.1, at 184.50 euros ($208.4) a ton; the contract earlier hit 184.75 euros a ton, its highest since June 10.
Germany’s CropEnergies AG, one of Europe’s largest ethanol producers, said demand for bioethanol is likely to recover as easing coronavirus lockdowns across the region enable more people to use automobiles; the company has also significantly increased output of ethanol for disinfectants as fuel demand collapsed after lockdowns were imposed.
Palm oil demand in India, the world’s top edible oil importer, is set to plunge this year as coronavirus lockdowns slash food service sector demand and households opt for alternatives at the supermarket; India’s palm oil imports could plunge 20% from a year ago to 7.5 million tons in the 2019/20 marketing year ending on Oct. 31
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.
