Explore Special Offers & White Papers from ADMIS

Global Ag News Headlines for May 12

by ADMIS Research Team

Overnight trade has SRW down roughly 3 cents, HRW down 2; HRS Wheat down 2, Corn is unchanged; Soybeans up 2, Soymeal up $1.00, and Soyoil down 10 points.

Chinese Ag futures (Sep) settled down 4 yuan in Soybeans, down 9 in Corn, down 22 in Soymeal, down 54 in Soyoil, and down 64 in Palm Oil.

Malaysian palm oil prices were down 6 ringgit at 2,014 (basis July) on India import restrictions.

U.S. Weather Forecast

Last night’s GFS model run continued to suggest a ridge of high pressure to build into the Hard Red Winter Wheat and Corn Belt regions May 17 – 19; it won’t be a strong ridge, but will lead to above average temperatures and a period of drier weather in the Corn Belt and Hard Red Winter Wheat Region and greater rain in the Northern Plains; as the ridge breaks down May 20 – 24, heavier rain and some severe weather will likely return to at least the central and northern parts of the winter wheat and Corn Belt regions and fieldwork will advance between the areas of rain.

South America Weather Forecast

A round of beneficial rain is expected in Mato Grosso do Sul, Parana, Sao Paulo, and southwestern Mato Grosso, Brazil Tuesday through Thursday; the rain will be good for some improvement of soil moisture for Safrinha corn; another round of rain in this area is likely May 19 – 22

The player sheet had funds net sellers of 5,000 contracts of SRW Wheat; net sold 2,000 Corn; net bought 5,000 Soybeans; net sold 1,000 Soymeal, and; net sold 1,000 lots of Soyoil.

We estimate Managed Money net even in SRW Wheat; net short 185,000 Corn; net long 26,000 Soybeans; net short 12,000 lots of Soymeal, and; net short 5,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures up roughly 2,500 contracts; HRW Wheat down 355; Corn up 1,200; Soybeans up 3,400 contracts; Soymeal up 3,300 lots, and; Soyoil down 1,000.

Deliveries were 9 Soymeal; 44 Soyoil; 4 Rice; ZERO Corn; 8 HRW Wheat; ZERO Oats; 12 Soybeans, and; 2 SRW.

There were changes in registrations (SRW Wheat up 2; HRW Wheat up 7)—Registrations total 13 contracts for SRW Wheat; ZERO Oats; Corn 7; Soybeans 221; Soyoil 3,495 lots; Soymeal 547; Rice 233; HRW Wheat 17, and; HRS Wheat 488 contracts.

TODAY—DELIVERABEL STOCKS—USDA MONTHLY CROP PRODUCTION/S&D REPORTS— 

Tender Activity— Tunisia bought 52,000t optional-origin soyoil—Wires were reporting China bought 240,000t U.S. soybeans—

U.S. Winter Wheat was rated 53% good to excellent (trade estimate was 54%) versus 55% a week ago and 64% a year ago; 31% fair (31% last week, 28% a year ago); 16% poor to very poor (14% last week, 8% a year ago).

U.S. Winter Wheat headed was 44% versus 32% last week, 38% a year ago, 50% average.

U.S. Spring Wheat planted was 42% (trade estimate was 49%) versus 29% last week, 38% a year ago, 63% average.

U.S. Spring Wheat emerged was 16% versus 6% last week, 8% a year ago, 29% average.

U.S. Corn planted was 67% (trade estimate was 71%) versus 51% a week ago, 28% last year, and 56% average.

U.S. Corn emerged was 24% versus 8% a week ago, 9% last year, and 22% average.

Oats were rated 69% good to excellent versus NA% last week and NA% a year ago; 28% fair (NA% last week, NA% a year ago), and; 3% poor to very poor (NA% last week, NA% a year ago).

U.S. Oats planted were 78% versus 67% a week ago, 59% last year, and 78% average.

U.S. Oats emerged were 55% versus 44% a week ago, 41% last year, and 59% average.

U.S. Soybeans planted was 38% (trade estimate was 42%) versus 23% a week ago, 8% last year, and 23% average.

Soybeans emerged were 7% versus NA% a week ago, 1% last year, and 4% average.

Yesterday’s U.S. weekly export inspections had

—Wheat exports running 5% ahead of a year ago (5% last week) with the USDA currently forecasting a 5% increase on the year

—Corn 34% behind a year ago (34% last week) with the USDA down 16% for the season

—Soybeans 5% ahead of a year ago (up 5% last week) with the USDA having a 2% increase forecasted on the year

Wire story reports U.S. corn farmers are facing steep losses this year as prices collapse to the lowest in more than a decade after they had purchased seeds and fertilizers and started planting the second-biggest crop since the Great Depression; at the same time, demand for corn in the world’s largest producer has plummeted with the collapse of the biofuel market, normally the destination of over a third of U.S. corn, as residents stay home during the coronavirus pandemic.

While many economic storylines are being completely rewritten amid the last four months of global COVID-19 quarantine efforts and the subsequent economic crash, one key storyline from 2019 remains steadfast as we attempt to move back toward normality: the U.S.-China trade war; it was the slowing of global trade, much of which is attributable to the trade war, that carried considerable blame for slowing global economic and oil demand growth in 2019; the Phase One trade deal struck between the United States and China in mid-January was at the time marketed as the great hope for the global economy in 2020; after all, hope for a coming trade deal had served as nearly the only cause for economic optimism throughout 2019; but in the wake of the COVID-19 outbreak, U.S.-China relations are once again breaking down; this makes a trade deal that already appeared doomed to fail nearly certain to do so.

China’s finance ministry announced a new list of 79 U.S. products that will be eligible for import tariff waivers for one year; the ministry said the waivers will take effect on May 19 and end on May 18, 2021; among the types of imports from the United States eligible for tariff waivers include rare earth ore.

China expects corn imports in the 2020/21 crop year to rise by 25% to 5 million tons, showed an agriculture ministry forecast on Tuesday, thanks to attractive import prices and as it implements the Phase 1 trade deal with the United States; corn consumption is also anticipated to grow slightly as hog production recovers and poultry output is relatively high

—soybean imports in the new crop year are expected to rise by almost 3% to 93.6 million tonnes, despite sluggish demand because of the coronavirus pandemic, thanks to good crushing margins for soymeal producers and on lower imports of rapeseed meal

Hog prices in China continue to fall, partly due to reduced consumer demand and panic selling by farmers, INTL FCStone says; the market’s current down cycle may last a few months, but the structural problems remain, and prices will remain elevated in the long-term; prices started to decline in March as supply came to the market and now those who waited to sell hoping for prices to rise are selling as they haven’t; live hog prices are around CNY30.05/kg, down CNY3.75/kg in the past month.

Outbreaks of the COVID-19 respiratory disease in different regions of Brazil could disrupt operations at the country’s largest chicken processor, a BRF SA executive said

Russia’s wheat crop is seen at 81.2 million tonnes in 2020, down from the previous estimate of 84.4 million tonnes, due to dry weather in the south of the country, the agricultural consultancy SovEcon said

Ukrainian seaport wheat exports rose nearly 23% in the week of May 2-8 to 351,000 tons from 286,000 tons a week earlier, preliminary data from the APK-Inform consultancy showed; the data showed that Ukraine has already exported 19.460 million tons of wheat in the current season, which runs from July to June; a senior government official said last month that Ukraine was ready to ban wheat exports if the volume exceeds the 20.2 million tons agreed with traders.

Soft wheat exports from the European Union in the 2019/20 season that started last July had reached 29.15 million tons by May 10, official EU data showed; that was 61% above the volume cleared by May 5 last year

—EU 2019/20 barley exports had reached 6.37 million tons, up 61% from the year-earlier period

—EU 2019/20 maize imports stood at 17.73 million tons, down 15%

European Union soybean imports in the 2019/20 season that started last July had reached 12.57 million tons by May 10, official EU data showed; that was 3% below the volume cleared by May 5 last year

—EU rapeseed imports in 2019/20 had reached 5.36 million tons, up 43% versus the year-earlier period

—Soymeal imports so far in 2019/20 were at 15.36 million tons, up 5%, while palm oil imports stood at 4.78 million tons, down 15%

Maize plantings in France are expected to jump by nearly 11% this year as farmers switch to spring crops after adverse weather hit sowing of winter varieties, the French farm ministry said; French farmers will sow 1.60 million hectares of grain maize, excluding crop grown for seeds, up 10.9% from 2019, the ministry said in its first estimate of this year’s maize area; the projected maize area would be 12.2% above the average of the past five years, the ministry added.

West Australian grain co-operative CBH is bracing itself for a major blow to its barley sales as the federal government and the industry work to head off possible tariffs of up to 80 per cent on exports to China; the barley industry, which sells about $600m worth of the crop a year to China, was in crisis talks with the government on Monday, putting together a submission for China’s Ministry of Commerce (MOFCOM) in an attempt to head off the imposition of heavy tariffs that could be confirmed as early as next week

China has suspended imports from four of Australia’s largest meat processors, Australia’s trade minister said, as the trade of several key agricultural commodities suffers in the wake of souring ties; the suspension comes after Australia last month called for an independent inquiry into the origins of the coronavirus and just days after China proposed introducing an 80% tariff on Australian barley shipments.

India has suspended 39 licenses to import refined palm oil after a surge in duty-free imports from neighboring countries such as Nepal and Bangladesh which are not key producers of palm oil; all these 39 licenses for import of refined palm oil will be immediately put under suspension

Malaysia April palm oil stocks jump on production hike, lockdowns

  • Palm April stocks rise 18% to 2.05 mln tons
  • Palm April output up 18% to 1.65 mln tons
  • Palm April exports up 4% to 1.24 mln tons

Malaysiam palm oil giant Sime Darby Oils said palm oil prices may remain depressed in 2020 due to the loss of food consumption and reduced biodiesel demand amid the coronavirus outbreak; the palm oil industry may see another round of cost cutting as cash flow is a priority

  • MALAYSIAN BIODIESEL ASSOCIATION SAYS CRUDE PALM OIL PRICE FOR 2020 SEEN AT 1,800-2,300 RINGGIT PER TONNE
  • MALAYSIAN BIODIESEL ASSOCIATION SAYS MALAYSIA PRODUCTION IN 2020 WILL DROP BY 2 MLN TONNES DUE TO MOVEMENT CURBS, OTHER FACTORS
  • MALAYSIAN BIODIESEL ASSOCIATION SAYS INDONESIA PALM OIL PRODUCTION IN 2020 WILL DROP BY 2.5 MLN TONNES

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.

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.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started