Global Ag News Headlines July 20
TODAY—EXPORT INSPECTIONS—CROP PROGRESS/CONDITIONS
Overnight trade has SRW down roughly 3 cents, HRW down 2; HRS Wheat down 1, Corn is down 3 cents; Soybeans up 4, Soymeal down $0.50, and Soyoil up 40 points.
For the week, SRW Wheat prices were up roughly 1 cent; HRW down 4; HRS down 8; Corn was down 5 cents; Soybeans up 5; Soymeal down $6.00, and; Soyoil up 170 points. Crushing margins were down 1 at 86 cents; Oil share up 2% at 34%.
Chinese Ag futures (Sep) settled down 46 yuan, up 26 in Corn, up 9 in Soymeal, up 144 in Soyoil, and up 154 in Palm Oil.
Malaysian palm oil prices were up 48 ringgit at 2,662 (basis October) at midsession, a 5 month high on supply concerns.
U.S. Weather Forecast
The 6-10 day forecast for the Midwest sees the bulk of the rainfall activity to push back to the north and impact areas generally north of I-80.
The 11-16 day outlook for the Midwest sees the ridging continuing for most of the period.
Temps in the Midwest will run close to average for the week ahead, perhaps even a bit below the further north and west; the 6-10 day sees temps to run average to a bit above, but no severe heat.
The 6-10 day forecast for the Southern Plains sees mainly dry weather to dominate the region through the period; temps will run near average for most of the week ahead, with above average readings for the weekend and first half of next week.
The 6-10 day forecast for the Delta sees light rains with coverage of around 50%.
The player sheet had funds net sellers of 1,000 contracts of SRW Wheat; net bought 9,000 Corn; bought 4,000 Soybeans; net sold 1,000 lots of soymeal, and; bought 4,000 Soyoil.
We estimate Managed Money net short 5,000 contracts of SRW Wheat; short 110,000 Corn; net long 85,000 Soybeans; net short 30,000 lots of Soymeal, and; long 23,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 4,900 contracts; HRW Wheat up 3,500; Corn up 1,700; Soybeans up 2,700 contracts; Soymeal up 1,900 lots, and; Soyoil up 2,700.
There were changes in registrations (Soyoil down 25; Rice down 47)—Registrations total 95 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans ZERO; Soyoil 2,956 lots; Soymeal 511; Rice 213; HRW Wheat 47, and; HRS 1,387.
Tender Activity—Taiwan seeks 98,230t U.S. wheat—
Speculators were modest buyers of Chicago-traded corn last week and big-time buyers of wheat, but the corn move was very unexpected considering the accompanying price action.
U.S. lawmakers from Iowa are trying to add aid for the biofuels industry into a pending coronavirus relief package in the Senate, U.S. Senator Chuck Grassley said; Grassley and his Iowa colleague, Senator Joni Ernst, hope to include a subsidy for feedstock for the ethanol industry in the bill.
Many US farmers have received their coronavirus aid payments and are getting favorable rainfall to help grow their crops — but they are still concerned about market volatility and commodity prices going forward.
Alberta crop report
Crop Conditions as of July 14, 2020; Precipitation over the past two weeks continued across the province, resulting in large areas with excess moisture; however, the crop condition ratings are still higher than the 5-year average (2015-2019) in all regions, except for the North West, which is 31 per cent below; provincially, crop growing conditions are 78 per cent good to excellent, compared to the 5-year average of 64 per cent
China’s corn prices remain strong, and processors continue to lose money despite raising prices of downstream products like dried distillers grains with solubles, starch and ethanol, says StoneX senior Asia commodity analyst; feed enterprises are increasingly using wheat for feeding–and rice–while state-owned trader Cofco is reportedly shopping for Ukrainian corn for October-February delivery; there have been some changes to corn auctions to cool prices down a bit, but they haven’t worked
China’s population of breeding sows and hogs staged a quick recovery during the first half (H1) of the year after the African swine fever took its toll on the swine industry last year, the Ministry of Agriculture and Rural Affairs said; the country had an inventory of 36.29 million breeding sows by the end of June, up by 5.49 million from the end of last year, and about 81.2 percent of the level seen at the end of 2017; the hog population reached 340 million heads by the end of last month, up by 29.29 million from the end of last year.
China’s top economic planner has allocated 4.55 billion yuan (649.6 million U.S. dollars) from the central budget to help pig farms improve facilities, and accelerate the recovery of the country’s hog production; according to a statement by the National Development and Reform Commission, the funds will be used to support the construction of waste treatment and utilization facilities in major livestock production counties and counties with a stock of more than 100,000 hogs
Chinese factory farming is creating the perfect environment for “the mutation and amplification of new viruses” and unless conditions improve “this pandemic will not be the last one”, a leading scientist has warned; Global Head of Research and Animal Welfare for Animals in Farming Kate Blaszak described the growth of intensive farming units not just in China but across the world and pointed to them as having the potential to both increase antibiotic resistance and create a deadlier pathogen than COVID-19; China is incubating two new strains of bird flu; it is also dealing with an outbreak of swine flu, which is a mixture of human, pig, and avian influenza viruses
Testing of imported food for the novel coronavirus is pushing capacity at some major Chinese ports to their limit, major shippers told customers this week, warning of additional fees and possible diversions to other ports; China stepped up inspections of imported food last month after an outbreak of the coronavirus among people working at and visiting a major food market in Beijing
Brazil’s 2020/2021 soy production is expected to reach 131.7 million tonnes, a 5.4% increase over the prior crop year, consultancy Safras & Mercado said, in its first prediction for the new crop year; Soy planted area is seen reaching 37.8 million hectares for the new growing season, an increase of 1.8% compared to 2019/2020
Ukraine’s 2020/21 July-June season grain exports remain slow at 719,000 tons so far versus around 1.7 million tons at the same point a season earlier, the economy ministry said; the exports have included 370,000 tons of corn, 159,000 tons of wheat and 186,000 tons of barley as of July 17
Ukraine has harvested 13.9 million tons of grain from 4 million hectares as of July 16, the economy ministry said; the volume included 8.3 million tons of wheat and 4.6 million tons of barley; the government last month said that poor weather could reduce the 2020 Ukrainian grain harvest to about 68 million tons from a record 75.1 million tons in 2019
Prices for Ukrainian wheat from the 2020 harvest rose by around $4 per ton over the last week, supported by demand from importers and slow pace of harvest, analyst APK-Inform said; APK-Inform said in a statement Ukrainian milling wheat with 12.5% protein was traded at $205-209 per tons FOB Black Sea at the end of last week versus $200-204 a week earlier
Ukraine’s Kernel exported a record 7.9 million tons of grain in the 2019/20 season which ended on June 30, up from 6.1 million the previous season, the agricultural holding said; Kernel strengthened its positions as the largest grain exporter from Ukraine, handling over 13% of the country’s total grain exports; its 2018/19 exports of 6.1 million tons were up 58% from 4.1 million in 2017/18
Euronext wheat eased on Friday in step with Chicago futures as wheat markets gave up gains from earlier this week and traders waited for more indications on a fast-advancing French harvest; September milling wheat on Euronext settled 1.00 euro, or 0.5%, lower at 184.75 euros ($211.30) a ton.
Rapeseed harvesting has started in the European Union with the market expecting a small crop like last year, though recent rain could boost yields after a tough growing season; crops have endured torrential autumn rain, insect pressure after a mild winter and a very dry start to spring; the adverse conditions have led analysts to project rapeseed production in the EU plus Britain to be in line with or slightly below last year’s crop of 17 million tons, which was the smallest since 2006.
Japan’s usage of corn in animal feed rises in May
Indian farmers have planted 69.2 million hectares with summer crops, up 21.2% from this time a year earlier, according to the Ministry of Agriculture & Farmers’ Welfare, boosted by bountiful monsoon rains that spurred sowing in most parts of the country
Exports of Malaysian palm oil products for July 1 – 20 fell 4.6 percent to 1,157,020 tons from 1,212,505 tons shipped during June 1 – 20, cargo surveyor Intertek Testing Services said
Malaysia is losing up to 25% of its potential palm oil yield due to a labor shortage that is expected to worsen in the coming months, the Malaysian Palm Oil Association (MPOA) said; the group, which represents plantation firms, said the government’s decision to freeze the recruitment of new foreign workers until December could lead to the “demise” of the industry; “Pre-COVID, we were already short of 36,000 workers; this (shortage) has already resulted in us not realizing our potential production by 10%-25%.
Malaysia is planning to file a World Trade Organization (WTO) case against the European Union over its restrictions on palm oil biofuel by this year; Malaysia is adamant and steadfast in taking legal action against the EU on its discrimination towards Malaysian palm oil.
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.