Global Ag News for Dec 11
TODAY—COMMITMENT OF TRADERS —
Overnight trade has SRW Wheat up roughly 2 cents, HRW up 3; HRS Wheat unchanged, Corn is down 1 cent; Soybeans up 3; Soymeal unchanged, and Soyoil up 5 points.
For the week, SRW Wheat prices are up roughly 16 cents; HRW up 16; HRS up 8; Corn is unchanged; Soybeans down 7 cents;
Soymeal down $8.00, and; Soyoil down 10 points. Crushing margins are down 11 cents at $0.96; Oil share is unchanged at 33%.
Chinese Ag futures (May) settled up 46 yuan in soybeans, down 12 in Corn, down 8 in Soymeal, up 98 in Soyoil, and up 138 in Palm Oil.
Malaysian palm oil prices were up 4 ringgit at 3,407 (basis May).
South America Weather Forecast:
In Argentina, some shower and thunderstorm activity will occur in the southern part of the nation tonight. Net drying will then likely occur in the south Saturday through at least Wednesday which will lead to some increase in crop stress. Rain in northern Argentina will be greater, especially in northeastern Argentina. This evening’s GFS model run was notably aggressive with a rain event in much of the nation Dec. 20 – 22 (except for far eastern areas). Some erratic showers and thunderstorms will be possible; however, this event was overdone and changes are likely in future model runs.
In Brazil, conditions will still be favorable in much of the nation for crop development; though, there will be some pockets that need more rain. Bahia and southeastern Piaui will receive little to no rain through next Thursday; however, there will likely be some increased rainfall in this area in week 2 of the outlook. Northwestern Mato Grosso do Sul will also be drier than preferred through week 1 but will likely get at least some increase of rain later in week 2 as well.
The player sheet had funds net buyers of 11,000 contracts of SRW Wheat; sold 11,000 Corn; net sold 5,000 Soybeans; net sold 2,000 lots of Soymeal, and; bought 1,000 lots of Soyoil.
We estimate Managed Money net long 16,000 contracts of SRW Wheat; long 272,000 Corn; net long 191,000 Soybeans; net long 61,000 lots of Soymeal, and; long 114,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 3,900 contracts; HRW Wheat up 665; Corn down 240; Soybeans up 4,300 contracts; Soymeal down 2,000 lots, and; Soyoil up 7,000.
Deliveries were ZERO Soymeal; ZERO Soyoil; ZERO Corn; 4 HRW Wheat; ZERO Oats; 2 SRW Wheat, and; 4 HRS Wheat.
Registrations total 91 contracts for SRW Wheat; 36 Oats; Corn 1; Soybeans 175; Soyoil 1,425 lots; Soymeal 193; Rice 313; HRW Wheat 113, and; HRS 1,078.
U.S. soybean supplies will be smaller than previously forecast due to rising demand from domestic processors, the U.S. Agriculture Department said on Thursday. The government also lowered its forecast for global stockpiles of soybeans due to a reduced crop in Argentina following a months-long dry spell in that key export country. But the cuts were smaller than market expectations and soybean futures quickly retreated from the session highs they hit shortly before the report was released.
U.S. soybean ending stocks for the 2020/21 marketing year were seen at 175 million bushels, the lowest in seven years, reflecting a 15 million-bushel increase to demand from processors, USDA said in its monthly World Agricultural Supply and Demand Estimates (WASDE) report.
The world soybean stocks view was cut to 85.64 million tonnes from 86.52 million tonnes. USDA dropped its harvest outlook for Argentina by 1 million tonnes to 50.00 million tonnes. It left its outlook for harvest in Brazil, the world’s biggest soybean producer, unchanged at 133.00 million tonnes despite dry conditions that delayed planting.
Analysts had been expecting the report to show U.S. soybean stocks of 168 million bushels and world soybean stocks of 85.11 million tonnes, based on the average of estimates given in a Reuters poll.
USDA also trimmed its outlook for U.S. wheat stocks by 15 million bushels to 862 million bushels due to rising export and falling import projections. It left its corn stocks forecast unchanged at 1.702 billion bushels, which would be a seven-year low.
Brazil expects record grain production of 265.9 million tons in the 2020-2021 harvesting season, or 3.5 percent more (9 million tons) compared to 2019-2020, the state-owned National Supply Company (Conab) said on Thursday. According to the Conab, the South American country continues to see expansion in cultivated land and production compared to the previous agricultural cycle. Brazil’s main agricultural export product, soy is expected to see 3.3 percent growth, for total output of 134.5 million tons.
In terms of 2020 soy exports, the Conab expects to sell 83.6 million tons abroad. If confirmed, the figure will mark a record high. In 2021, the agency expects about 85 million tons in soy exports, which would represent an increase of 1.67 percent.
Argentine grains inspectors and oilseeds workers said on Thursday they would extend a wage strike as stalling contract negotiations threaten to interrupt exports from one of the world’s main grain producers.
Argentina, a top global supplier of corn, soybeans and wheat, is suffering a spate of strikes in its agricultural sector as workers seek pandemic-linked bonuses and higher payouts to keep up with a high inflation rate. The oilseeds workers’ federation and the URGARA union, representing workers who inspect grains at port, started the 24-hour strike on Wednesday, when they had said it could be extended a day. Corn and soy, the country’s main cash crops, are currently being planted. With wheat harvesting having just begun, December is not peak export season. Amid a weakening peso, farmers also say they would rather hold onto their crops.
Argentina, just emerging from default after restructuring its foreign debts, needs export dollars to build up its depleted reserves of foreign currency. Grains, especially processed soy, are the country’s main driver of exports.
Euronext wheat climbed with Chicago on Thursday, supported by signs that Russia is considering export restrictions, but closed below session highs as a widely watched U.S. government crop report was broadly in line with market expectations.
March milling wheat, the most active contract on the Paris-based Euronext exchange, settled up 2.00 euros, or 1.0%, at 204.75 euros ($248.01) a tonne. It earlier rose to 206.50 euros, its highest since Dec. 1, as it extended a rebound from a two-month low on Monday.
Russian Prime Minister Mikhail Mishustin said the country would prepare measures to stabilize domestic food prices, and sources told Reuters the government is considering a grain export quota and wheat export tax.
Malaysian palm oil futures tracked rival oilseeds and crude oil higher on Friday, although slowing exports kept the benchmark contract on track for its first weekly drop in three. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange gained 18 ringgit, or 0.53%, to 3,421 ringgit ($844.07) a tonne by the midday break, rising for a second straight session.
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