July 10 Global Ag News Headlines
TODAY—USDA MONTHLY S/D—COMMITMENT OF TRADERS—
Overnight trade has SRW down roughly 2 cents, HRW down 3; HRS Wheat down 1, Corn is up 1 cent; Soybeans up 2, Soymeal up $0.50, and Soyoil unchanged.
For the week, SRW Wheat prices are up roughly 29 cents; HRW up 19; HRS up 15; Corn is up 5 cents; Soybeans up 7; Soymeal up $2.00, and; Soyoil up 15 points. Crushing margins are unchanged at 88 cents; Oil share down 1% at 31%.
Chinese Ag futures (Sep) settled down 17 yuan, up 10 in Corn, up 15 in Soymeal, down 8 in Soyoil, and down 78 in Palm Oil.
Malaysian palm oil prices were down 18 ringgit at 2,385 (basis September) at midsession on weaker July export expectations.
U.S. Weather Forecast
The southwestern Corn Belt, such as Missouri and eastern Kansas, will still likely trend drier in the second week of the outlook; the position of the ridge of high pressure in the second week is likely to favor complexes of thunderstorms to move mostly through northern and eastern production areas of the Corn Belt.
An unusually cool air mass will drop down through the Northern Plains and into Nebraska and the northwestern Corn Belt Tuesday into Thursday; this will merge with a weather disturbance containing some monsoonal moisture leading to a potential significant rain event from Nebraska through Wisconsin within this timeframe.
The 11 to 16 day forecast has now turned mixed with the models. The GFS sees close to average rainfall and temps for the Midwest through the period. The European model sees ridging producing limited rainfall and above average temps.
The player sheet had funds net buyers of 7,000 contracts of SRW Wheat; net bought 15,000 Corn; bought 4,000 Soybeans; net bought 4,000 lots of soymeal, and; sold 3,000 Soyoil.
We estimate Managed Money net short 17,000 contracts of SRW Wheat; short 158,000 Corn; net long 80,000 Soybeans; net short 43,000 lots of Soymeal, and; long 2,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 7,300 contracts; HRW Wheat down 550; Corn up 535; Soybeans up 930 contracts; Soymeal down 1,400 lots, and; Soyoil down 1,300.
Deliveries were ZERO Soymeal; 14 Soyoil; 10 Rice; ZERO Corn; 5 HRW Wheat; ZERO Oats; ZERO Soybeans; 5 SRW Wheat, and; ZERO HRS Wheat.
There were changes in registrations (SRW Wheat down 62; Rice down 1; HRW Wheat down 16)—Registrations total 100 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans ZERO; Soyoil 3,141 lots; Soymeal 511; Rice 10; HRW Wheat 79, and; HRS 1,379.
Tender Activity—Philippines pass on 110,000t feed wheat—
For the week ended July 2nd, U.S. All Wheat sales are running 1% ahead of a year ago, shipments down 13% with the USDA forecasting a 2% decline on the year
—By class, HRW wheat sales are down 6%, shipments 26% behind
—SRW sales 29% behind, shipments 49% behind
—HRS sales 17% ahead, shipments up 6%
For the week ended July 2nd, U.S. Corn sales are running 13% behind a year ago, shipments 21% behind with the USDA forecasting a 14% decline.
For the week ended July 2nd,U.S. Soybean sales are running 5% behind a year ago, shipments down 2% with the USDA forecasting a 6% decline on the year
–Soymeal sales 1% behind on the year, shipments up 3% with a 1% decrease forecasted
—Soyoil sales 50% ahead of a year ago, shipments 47% ahead with a 39% increase forecasted
Most of corn and soybean’s price weakness year-to-date is likely over, as critical demand weakness is dissipating for now, Fitch Solutions says; it adds that ethanol production and prices have revived as oil prices rallied from 1Q lows, while livestock processing has rebounded on slowly reopening U.S. meat factories, which improves demand; it expects corn prices to outperform the rest of the grains complex over the coming months.
Saskatchewan crop report
Most of the province received rainfall this week, with the Rama area receiving the highest amount at 98 mm; crop development is progressing in the province as a result of warm weather and recent rainfall; fifty-nine per cent of the fall cereals and 24 per cent of the spring cereals are in the heading stage; thirty-seven per cent of the canola and mustard and 48 per cent of the pulse crops are in the flowering stage
China said on Friday that it predicted higher corn and soybean imports for 2019/20, as the country was expected to step up purchases from the United States to fulfill the Phase 1 trade deal.
—Corn imports for the crop year that ends in September are now seen at 6 million tons, up 2 million tons from last month’s forecast, the Ministry of Agriculture and Rural Affairs said
—The ministry also raised its forecast for China’s 2019/20 soybean imports to 94 million tons, up 3 million tons from its estimate in the previous month
China’s dwindling pace of meat imports, thanks to its tough measures against coronavirus contamination, will provide further support for prices already buoyed by a severe shortage of pork, analysts said; purchases of pork and other meats have soared this year after domestic production shrank 30% following an outbreak of African swine fever that devastated China’s hog herd, but the recent anti-contamination measures threaten to reduce imports; Beijing has suspended imports from more than 20 overseas plants processing pork, beef and poultry since mid-June, after workers were infected with the virus
China floods blamed for fresh African swine fever outbreaks
- Sow inventories in south, southwest China fell in June -analyst
- Hog stocks could fall sharply if rains continue -analyst
- Pig prices in the south have surged to near record levels
China’s Dalian Commodity Exchange began simulated trading for its live hog futures contract on Friday as it plans to launch what will be the world’s second such contract after lean hog futures in the United States.
Russia’s 2020 grain harvest is seen at about 122.5 million tons, the agriculture ministry said, including 75 million tons of wheat; the ministry said it sees Russia’s grain exports for the 2019-2020 season at 43 million tons; it added that it wanted to buy 2.5-3.5 million tons of grain for its new state stockpile, but that no purchases will be made before the new 2021/22 season which will start on July 1 2021.
In Kazakhstan’s main grain-growing regions, 48% of crops of grain and leguminous crops are in good condition, while 3% in unsatisfactory condition, the First Agriculture Deputy Minister said; the harvest campaign in these regions will begin in mid-August.
The European Union awarded its entire duty-free quota of 138,994 toes of any-origin maize (corn) available for the second half of 2020 after a first bidding round last week, EU data showed.
French farmers had harvested 10% of this year’s soft wheat crop by July 6, compared with 4% a week earlier, farm office FranceAgriMer said; that was ahead of the 6% harvest progress estimated a year ago; grain markets are waiting for French harvesting to reach the major northern crop belts to see the extent to which production could decline from last year’s bumper crop; France’s farm ministry this week forecast that soft wheat production would fall 21% compared with last year due to adverse weather during the growing season, although some traders see its outlook as too low
Euronext wheat rose for a third day on Thursday to its highest in almost six weeks, driven by uncertainty over harvest prospects in Europe and other parts of the world; front-month September wheat was 1.00 euros, or 0.5%, higher at 188.00 euros ($212.50) a ton; it earlier rose to 189.00 euros, its highest since May 29.
Bulgaria expects to harvest 4.5-4.9 million tons of wheat this year, which represents a decrease of some 25% on an annual comparison basis, the agriculture minister said, lowering the forecast she made in May; at the end of May, Bulgaria is expected to produce some 5.0 million tons of wheat in 2020.
Syria could face severe bread shortages for the first time since the start of the war, another challenge for President Bashar al-Assad as he grapples with an economic meltdown and fresh U.S. sanctions; any major disruptions to Syria’s bread subsidy system could undermine the government and threaten a population highly dependent on wheat as rampant inflation drives up food prices.
Plummeting soybean meal exports from India, the leading producer of non- genetically modified organisms (GMO) soybean, amid non-competitive prices in the global market and subsequent closures of economies in lockdown have left exporters baffled seeking a revival package; hard hit by a sharp dent in exports of soybean meal in the ongoing oil year after being outpriced in the global market amid a poor crop and rival countries eating into the traditional markets such as South East Asian countries, exporters and processors have sought export incentives and restrictions on import of edible oils.
Malaysia palm oil June end-stocks fall as exports surge 25%
- June stocks fall 6.3% to 1.90 mln tons
- Production rose higher-than-expected at 14.2%
- Exports up 24.9%, highest since August
Exports of Malaysian palm oil products for July 1 – 10 fell 17.8 percent to 448,516 tons from 545,360 tons shipped during June 1 – 10, cargo surveyor Intertek Testing Services said
Malaysia’s palm-oil exports during the July 1-10 period are estimated down 16.8% on month at 458,173 metric tons, cargo surveyor AmSpec Agri Malaysia said
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.