Global Ag News For Feb 17
TODAY—WEEKLY DELIVERABLE STOCKS
Overnight trade has SRW Wheat down roughly 6 cents, HRW down 5; HRS Wheat down 4, Corn is unchanged to down 3 cent; Soybeans up 4; Soymeal up $0.50, and Soyoil up 30 points.
Chinese Ag futures on holiday from Feb. 11 to 17 (Thursday to Wednesday) for the celebration of Chinese Spring Festival. Resumes on Feb. 18 (Thursday).
Malaysian palm oil prices were up 99 ringgit at 3,634 (basis May) on costlier soyoil, supply concerns, weaker ringgit.
Net drying is expected across a majority of Argentina through next Tuesday. Rain that occurs will be erratic and there will be localized areas of meaningful moisture; however, there will also be pockets that get very little. Crop stress is unlikely to become very serious in the first week of the outlook; however, greater rain will be needed in the second week. Rain in the second week is likely to be erratic as well. The increase of erratic rain in last evening’s GFS model run in northern Argentina Mar. 1 – 3 fit the likely pattern.
Conditions in much of Brazil will continue to be favorable. Some pockets in the south may become a little drier than preferred in the next seven days and some pockets in the north a little wetter than preferred. Drying in the south over the next 5 to 7 days will be beneficial though for soybean maturation and harvesting, and the planting of second season crops.
The player sheet had funds net buyers of 11,000 SRW Wheat; bought 19,000 Corn; net bought 10,000 Soybeans; bought 2,000 lots of Soymeal, and; net bought 7,000 Soyoil.
We estimate Managed Money net long 19,000 contracts of SRW Wheat; long 340,000 Corn; net long 167,000 Soybeans; net long 63,000 lots of Soymeal, and; long 114,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 7,900 contracts; HRW Wheat up 1,700; Corn down 20,500; Soybeans down 16,200 contracts; Soymeal down 3,200 lots, and; Soyoil down 725.
There were no changes in registrations—Registrations total 49 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 169; Soyoil 1,286 lots; Soymeal 175; Rice 732; HRW Wheat 91, and; HRS 1,023.
Tender Activity—Philippines seek 145,000t optional-origin wheat—Algeria bought small amounts of optional wheat—S. Korea bought 69,000t optional-origin corn—
All Wheat sales running down 2% (down 1% last week) with the USDA forecasting a 2% increase on the year. Corn up 84% (up 85% a week ago); USDA up 43%. Soybeans up 77% (up 80% a week ago); USDA up 33%
U.S. soybean processors recorded their second-largest monthly crush on record in January, the latest in a string of historically active months of soy processing crushed 184.654 million bushels of soybeans last month, up from 183.159 million bushels in December and 176.940 million bushels in January 2020. It was the biggest-ever January crush and the second largest crush for any month, behind only October 2020. Analysts had expected the January crush at 183.087 million bushels. Estimates ranged from 180.000 million to 186.300 million bushels
NOPA said soyoil supplies among its members at the end of January rose to an eight-month high of 1.799 billion lbs, up from 1.699 billion lbs at the end of December but below the 2.013 billion lbs in storage at the end of January 2020. The oil stocks topped the average trade forecast of 1.763 billion lbs. Estimates ranged from 1.710 billion to 1.850 billion lbs.
Soymeal exports in January were pegged at 969,353 tons, down from 1,037,303 tons in December but above 931,061 tons exported in January 2020.
Sky-high U.S. natural gas prices have prompted some Midwestern ethanol producers to reduce processing in the last week, hoping instead to sell off some of their natural gas to take advantage of current high spot prices caused by the spike in cold weather, industry sources said. Ethanol margins in the Corn Belt have dropped sharply due to the frigid weather, falling to negative-$3.92 a gallon, lowest since at least 2010, Refinitiv Eikon data showed. Natural gas prices have soared because of power needs, hitting their highest levels in years due to the cold snap.
Kraft Heinz Co and Conagra Brands Inc said they may choose to raise prices this year on some products that use wheat, sugar and other commodities that are becoming increasingly expensive due to high demand.
Commodity markets may be about to embark on another supercycle – a multi-year, broad-based, and usually large increase in prices – according to research published by some of the top investment banks involved in the sector. But while many prices are likely to increase over the next couple of years, after slumping during the coronavirus pandemic, it is less clear this will mark the start of a supercycle rather than an ordinary cyclical upturn. Even a cursory inspection of historical time series shows commodity prices exhibit cyclical behaviour at all time scales, ranging from very short (minutes, hours and days) to very long (lasting months, seasons, years and even decades).
Severe cold across Europe in the past week is unlikely to have inflicted significant damage on wheat crops that had built up winter sturdiness and were often insulated by snow, analysts and traders said. Although frost impact cannot be fully determined until crops emerge from winter dormancy, the expected absence of major losses in the European Union could keep the exporting region on track for a larger harvest this year, particularly after a rebound in sowing in top EU grower France. In France, there shouldn’t be much impact and we’re sticking with a scenario of pretty decent harvest yields, said crop analyst with Strategie Grains. Like other European countries, France observed double-digit negative Celsius temperatures in some areas last week, levels that can potentially hurt wheat crops. However, rapeseed sown during late-summer drought and some spring barley drilled early before winter were more at risk than sturdier wheat, according to traders and analysts.
Euronext wheat extended a rally on Tuesday to a new two-week peak, supported again by the risk of frost damage to U.S. wheat and the prospect of fresh export sales for French wheat in an Algerian tender. Front-month March milling wheat was up 2.00 euros, or 0.9%, at 230.50 euros ($279.07) a tonne. It earlier rose to 231.25 euros, its highest since Jan. 28.
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.