Global Ag News for Nov 23
Overnight, Jan soybean are up 14 cents and near 11.95, SMF is near 396.0, BOF is near 38.77, Dec corn is up 5 cents and near 4.28, Chicago Dec wheat is up 7 cents and near 6.01.
On Friday, Managed funds were net buyers of 7,000 soybeans, 1,000 soymeal, sold 1,000 soyoil, bought 3,000 corn and bought 2,000 Chicago wheat. We estimate the funds are net long 16,000 wheat, 270,000 corn, 215,000 soybeans, 105,000 soymela and 90,000 soyoil.
Malaysian palm oil futures fell for a third straight session on Monday, hitting a near two-week low on shrinking November exports and tracking losses in rival Dalian oils. Exports from Malaysia during Nov. 1 to 20 fell 16% from the same period in October, as shipments to the Indian subcontinent contracted by almost half, according to data from cargo surveyors on Friday.
America’s biggest biofuel companies plan to ask President-elect Joe Biden to impose a nationwide standard to reduce carbon emissions from transport fuels, according to five sources familiar with the matter, and hope to preserve a role for products like ethanol amid the fight against climate change.
The planned push from the biofuel industry reflects its increasing concern about the future as Biden prepares measures to slash emissions that could upend traditional energy markets, and as the federal regulation that has underpinned growth in the biofuel market for more than a decade – the Renewable Fuel Standard – nears expiry in its current form.
Speculators have maintained heavily bullish bets in Chicago-traded corn and soybeans for at least a month now as the supply picture grew significantly tighter than anyone expected. But other market participants have also been very active lately, adding to the overall optimism.
As of Nov. 17, the managed money net long in CBOT corn futures and options was at 278,889 contracts, a decrease of less than 2,000 contracts from the prior week. Corn futures had fallen fractionally during that week, but heavier fund selling had been expected.
Data from the U.S. Commodity Futures Trading Commission also showed a reduction in the funds’ soybean net long to 208,774 futures and options contracts in the week ended Nov. 17.
Corn open interest as of Nov. 17 was up 17% since mid-October, last week reaching the highest level in more than a year and easily the highest level for the time of year since 2010. Soybean open interest rose 11% in the two weeks ended Nov. 17 and is very comfortably the largest for the time of year, but it is off mid-October’s all-time high.
Chicago wheat futures continue at elevated levels for this time of year, but they have come off the mid-October highs, and speculators have been heavier sellers in the latest two weeks. Through Nov. 17, they reduced their net long to 14,414 futures and options contracts from 32,633 in the prior week.
Traders have been weighing concerns over exportable supply in top countries such as Russia with the expectation for record global production and stocks. Futures were up fractionally between Wednesday and Friday, and commodity funds were pegged as light buyers.
Funds’ Kansas City wheat views were barely changed for the second consecutive week, as they expanded their net long by 638 futures and options contracts to 47,967 through Nov. 17. But they trimmed their Minneapolis wheat net long by 747 contracts to 6,061.
China imported 330,000 tonnes of pork in October, customs data showed on Monday, up 80.4% on a year prior, as the world’s biggest meat consumer continued to stock up on proteins after a plunge in its own pork output.
China’s pork output fell 19% in the first half of the year after fatal pig disease African swine fever devastated its huge hog herd over the last two years. Imports for the first 10 months of the year are up 126.2% at 3.62 million tonnes, the General Administration of Customs said. October imports were lower than the previous month’s 380,000 tonnes, with recovering Chinese supplies pushing local prices down from very high levels, and making importers more cautious.
China’s pig herd grew 26.9% in October from a year earlier, according to the agriculture ministry.
Beef imports in October were up 12.2% year on year to 170,000 tonnes, the data also showed, with year-to-date shipments at 1.74 million tonnes.
China sold 708,462 tonnes of wheat, 17.62% of its total offer, at an auction of state reserves last week, the National Grain Trade Centre said on Monday.
Russia’s November exports of wheat, barley and maize (corn) are estimated at 5.0 million tonnes, unchanged from October, the SovEcon agriculture consultancy said.
Ukrainian wheat export prices have lost $4 per tonne over the last week due to a decrease in demand from importers because of high prices, APK-Inform agriculture consultancy said on Monday.
Last month, high demand from importers and worries about a delay in winter wheat sowing had pushed Ukraine’s milling wheat export prices to the highest in two seasons.
Ukrainian 12.5% protein Black Sea wheat prices traded at $249-$254 per tonne FOB Black Sea at the end of last week, the consultancy said in a report. Ukraine, among the world’s major wheat growers and exporters, plans to export 17.5 million tonnes of wheat in the 2020/21 July-June season. The country, which also accounts for about 16% of global grain exports, sold about 57 million tonnes of grain to foreign buyers in the 2019/20 season.
Ukrainian sunflower oil export prices have reached a new high, adding $70-$75 per tonne over the last week due to stable demand from importers, the APK-Inform consultancy said on Monday. Ukraine, the world’s largest sunoil exporter, could see its 2020 sunseed production fall to 13.25 million tonnes from 15.3 million tonnes in 2019, according to the national sunoil producers’ union.
A government agency in Pakistan is believed to have bought about 340,000 tonnes of wheat in an international tender for up to 400,000 tonnes, European traders said on Monday.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
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.