Global Ag News Headlines June 11

Overnight trade has SRW down roughly 3 cents, HRW down 4; HRS Wheat up 2, Corn is steady/mixed; Soybeans down 2, Soymeal down $0.50, and Soyoil down 15 points.

Chinese Ag futures (Sep) settled up 33 yuan, up 15 yuan in Corn, unchanged in Soymeal, down 46 in Soyoil, and down 42 in Palm Oil.

Malaysian palm oil prices were up 19 ringgit at 2,368 (basis August) supported by a surge in Jun 1-10 export estimates.

U.S. Weather Forecast

A big precipitation change in last night’s GFS model run was the removal of rainfall across the Corn Belt and Hard Red Winter Wheat Region Jun. 18 – 20. The model run showed the front arriving four days later and suggested a large ridge of high pressure remain dominant over these regions until Jun. 22. Some showers and thunderstorms will be likely in the northern Corn Belt and northern Hard Red Winter Wheat Region. Some rain would then shift farther south Jun. 21 – 25 as the ridge of high pressure breaks down more. A drought-busting rain is not expected though in the central and southwestern Plains and summer crop stress in unirrigated areas will likely continue to be an issue.

The player sheet had funds net buyers of 1,000 contracts of SRW Wheat; net sold 8,000 Corn; net bought 1,000 Soybeans; net bought 2,000 Soymeal, and; net sold 1,000 Soyoil.

We estimate Managed Money net short 16,000 contracts of SRW Wheat; net short 282,000 Corn; net long 22,000 Soybeans; net short 47,000 lots of Soymeal, and; are net long 14,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures down roughly 235 contracts; HRW Wheat up 3,000; Corn up 17,200; Soybeans up 265 contracts; Soymeal up 2,200 lots, and; Soyoil up 4,800.

There were no changes in registrations—Registrations total 11 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans ZERO; Soyoil 3,495 lots; Soymeal 511; Rice 106; HRW Wheat 17, and; HRS Wheat 488 contracts.

TODAY—WEEKLY EXPORT SALES—USDA MONTHLY S/D REPORTS— 

Tender Activity—Egypt bought 120,000t Russian wheat—Tunisia seeks 134,000t optional-origin wheat—Philippines bought 56,000t optional-origin feed wheat—

U.S. ethanol production for the week ended June 5th averaged 837,000 barrels per day (up 9.4% versus a week ago, down 23.6% versus a year ago); stocks totaled 21.8 mil barrels (down 3.0% versus a week ago, unchanged versus last year); corn use for the week was 85.4 mil bu (78.1 mil last week) and versus the 99.1 mil bu needed to meet USDA projections

—US ethanol production appears to be quickly bouncing back after the economic pause due to the coronavirus pandemic sank output to a record low; the uptick brings ethanol production back to levels last seen in late March; however, production is still well off from historical norms, one reason that corn futures trading on the CBOT were unmoved by the EIA data.

—Fuel demand has made a strong comeback from the coronavirus gut-punch that had most of the world sheltering in place, though it is still notably off expected levels, leaving a lot of uncertainty over how much U.S. corn demand will ultimately be lost because of slower ethanol output.

• CHINA SELLS 3,942,683 TONNES OF CORN, OR 100% OF TOTAL OFFER, AT AUCTION OF STATE RESERVES -TRADE CENTRE
• AVERAGE SELLING PRICE OF CORN IS 1,818 YUAN/TONNE

China makes efforts to ensure stable grain output

—Watching the combine harvester shuttling between wheat, a farmer in east China’s Anhui Province was relieved; facing the challenges from the novel coronavirus and drought, we didn’t expect to embrace a bumper harvest this year, with the yield increasing by 100 kg per mu (0.067 hectares) from last year;” according to the Ministry of Agriculture and Rural Affairs, farmers across China have harvested around 11.3 million hectares of wheat as of June 5, completing over 50 percent of the wheat harvesting; the progress this year is about three days ahead compared with previous years; despite the COVID-19 epidemic, China has introduced multi-pronged measures to minimize disruptions and ensure stable grain output

China expects corn prices to fall in the second half of the year as supplies increase due to higher imports and sales from state reserves, according to an agriculture ministry report on Thursday; the ministry also lowered its forecast for 2019/20 corn industrial consumption to 82 million tonnes, down 500,000 tonnes from the previous month’s estimate, as the operation rate of corn processing companies is expected to fall on rising prices of the grain; consumption, production, and imports of corn and soybeans in the 2020/21 year remain unchanged, according to the monthly Chinese Agriculture Supply and Demand Estimates (CASDE).

BRAZIL SOYBEAN EXPORTS ESTIMATED AT 10.8 MILLION TNS IN JUNE AND CORN EXPORTS SEEN AT 689,000 TNS, SAYS EXPORTERS ASSOCIATION ANEC

BRAZIL SOYBEAN EXPORTS ESTIMATED AT 60.5 MILLION IN FIRST SIX MONTHS OF THE YEAR AND CORN EXPORTS SEEN AT 2.4 MILLION TNS IN THE SAME PERIOD, SAYS ANEC

—The weakening of the Brazilian currency combined with firm port premiums for soybeans has accelerated sales of the current and the future crop, which will be planted around September, according to agribusiness consultancy Datagro; Brazilian farmers as of June 5 had sold 87.5% of the 2019/2020 soybean crop, representing 106.5 million tonnes; this is the fastest pace for sales since the previous record in 2016, when Brazilian soybean farmers had traded almost 77% of that year’s crop around this time in the season

—Sales of the future 2020/2021 crop reached 33.1%, more than 20 percentage points above the historical average; a steep rise in prices due to a strong U.S. dollar, combined with firm export premiums, meant that domestic producers maintained their interest to sell

Dryness in Argentina’s central agricultural region threatens to derail expectations that farmers will plant a record 7 million hectares of wheat in the 2020/21 cycle, the Rosario grains exchange said; the country is a leading wheat exporter and last month the exchange said that if its planting forecast is realized, it could produce a record crop of 22 million tonnes; but since the forecast was made dryness has become an increasing concern, as rains in the wheat belt have been less than forecast; about 40% of the crop has been sown so far

—Argentina’s 2019/20 soy harvest had been completed at 50.7 million tonnes, according to the report.

Russian exports of wheat increased to 10.4 million tonnes in the first four months of 2020 from 8.5 million tonnes a year ago, official customs data showed

Agriculture consultancy IKAR on Thursday raised its estimate for Russia’s 2020/21 wheat exports by 1 million tonnes to 35 million tonnes; it raised its forecast for Russia’s 2020 wheat crop to 78.0 million tonnes from 75.6 million tonnes due to favourable weather conditions in Russia’s central and Volga regions

Ukrainian agriculture consultancy APK-Inform increased its forecast for Ukraine’s sunflower oil output in 2019/20 season to 6.7 million tonnes from 6.6 million tonnes a month earlier; Ukraine had produced 5.15 million tonnes of sunoil in the first eight months of the 2019/20 September-August season, up 8% from a season earlier; local sunoil plants could crush a total of 15.2 million tonnes of sunseed this season versus 15 million in 2018/19.

Consultancy Strategie Grains reduced its forecast for this year’s soft wheat harvest in the European Union, saying it expected a hot, dry spring to have hurt crops before rains returned in June.

Farm office FranceAgriMer increased its forecast for French soft wheat exports outside the European Union to a record amount as brisk shipments continued in the latter stages of the season; in a monthly supply and demand outlook for cereals, the office raised its estimate of soft wheat exports outside the EU in the 2019/20 season that ends on June 30 to 13.45 million tonnes from 13.3 million seen last month; that would mark a record volume and be 39% above 2018/19 exports; the office has now increased its non-EU export outlook for soft wheat for nine months in a row since giving an initial projection of 11 million tonnes last September

—Forecast maize stocks were trimmed to 2.1 million tonnes from 2.2 million tonnes, reflecting increased feed demand

India’s sunflower oil imports could jump 15% in 2019/20 to a record 2.7 million tonnes as household consumption jumped during the lockdown, an industry official said; India is the world’s biggest importer of edible oils and higher purchases of sunflower oil could help exporters such as Ukraine, Russia and Argentina to sell surplus output.

Palm oil production in the world’s largest producer and exporter Indonesia is seen 3% higher at 46,475,000 tonnes, the Indian Vegetable Oil Producers Association (IVPA) said; IVPA also pegged no.2 export Malaysia’s production in 2020 to fall 3% to 19,211,000 tonnes.

Malaysia will export more palm oil to India, China and the European Union, the biggest buyers, in the third quarter after an easing of coronavirus curbs and an export duty exemption, a state agency and industry body forecast on Thursday.

Palm oil’s price recovery has a tailwind from India as demand from one of the world’s top consumers of the commodity improves, DBS says; the key price catalyst in the past two weeks has been the resumption of economic activities and rising imports from India, the Singaporean bank says; DBS expects palm-oil exports to China and the European Union will remain steady in the coming months due to higher demand from hotels, restaurants and caterers as coronavirus restrictions on businesses are eased.

Malaysia’s palm oil exports during the June 1-10 period are estimated up 63.8% on month at 580,096 metric tons.