Written Commentary
TODAY—NOON CLOSE —
Overnight trade has SRW Wheat up roughly 1 cent, HRW up 1; HRS Wheat up 3, Corn is up 1 cent; Soybeans up 11; Soymeal up $2.00, and Soyoil up 35 points.
For the week, SRW Wheat prices are up roughly 16 cents; HRW up 16; HRS up 12; Corn is up 11 cents; Soybeans up 44 cents; Soymeal up $15.00, and; Soyoil up 120 points. Crushing margins are up $0.01 at $1.05 (March); Oil share unchanged at 32%.
Chinese Ag futures (May) settled up 62 yuan in soybeans, up 8 in Corn, down 4 in Soymeal, up 214 in Soyoil, and up 246 in Palm Oil.
Malaysian palm oil prices were up 21 ringgit at 3,556 (basis March) at midsession following rival veg oils.
Conditions in Brazil will be mostly favorable for crops. Rain will increase in the far south later next week.
There is still no need for any significant forecast changes in South America. Shower and thunderstorm activity in Argentina will be erratic through next Wednesday; though, coverage of rain will be greatest Sunday through Tuesday due to a frontal boundary. West-central and northwestern production areas of Argentina will be wettest and meaningful moisture in eastern and southern parts of the region will be more localized.
The player sheet had funds net buyers of 10,000 contracts of SRW Wheat; bought 20,000 Corn; net bought 9,000 Soybeans; bought 5,000 lots of Soymeal, and; bought 5,000 lots of Soyoil.
We estimate Managed Money net long 27,000 contracts of SRW Wheat; long 345,000 Corn; net long 253,000 Soybeans; net long 105,000 lots of Soymeal, and; long 113,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 8,900 contracts; HRW Wheat up 1,400; Corn up 10,800; Soybeans down 11,600 contracts; Soymeal up 250 lots, and; Soyoil down 7,600.
There were changes in registrations (Soymeal down 25)—Registrations total 65 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 175; Soyoil 1,313 lots; Soymeal 200; Rice 313; HRW Wheat 113, and; HRS 1,041.
Tender Activity—Jordan bought 60,000t optional-origin wheat
All Wheat sales up 8%, shipments down 2% with the USDA forecasting a 2% increase
HRW up 4%, shipments up 2% with a 5% increase seen
SRW down 26%, shipments down 32% (USDA at an 18% decline)
HRS up 6% (up 3%,up 1%)
Corn up 137%, shipments up 63% (USDA up 49%)
Soybeans up 86%, shipments up 77% (USDA up 31%
Soymeal up 6%, shipments up 11% (USDA unchanged)
Soyoil unchanged (shipments down 25%, USDA down 3%)
U.S. ethanol production for the week ended Dec 18 totaled 976,000 barrels per day (up 2% vs a week ago, down 9.9% vs last year). Stocks totaled 23.2 mil barrels (up 0.95% vs last week and up 7.9% vs a year ago). Corn use was 98.1 mil bu vs 96.7 mil last week and the 97.3 mil needed to meet USDA projections.
U.S. winter wheat production unchanged as crop enters dormancy without immediate winterkill risks – Refinitiv Commodities Research
2021/22 U.S. WINTER WHEAT PRODUCTION: 33.3 [30.2–36.3] MILLION TONS, UNCHANGED FROM LAST UPDATE. Outlooks for 2021/22 U.S. winter wheat planted area and production are unchanged at 30.9 million acres and 33.3 [30.2–36.3] million tons, respectively. As winter wheat remains dormant over the next few months, temperature and insulating snow cover are the key features to watch.
US DEC 1 2020 ALL HOGS 99 PCT OF YR AGO (TRADE ESTIMATE 99 PCT) – USDA
US DEC 1 2020 HOGS KEPT FOR BREEDING 97 PCT (TRADE ESTIMATE 98.1 PCT)-USDA
US DEC 1 2020 HOGS KEPT FOR MARKETING 99 PCT (TRADE ESTIMATE 99 PCT)-USDA
China loses more than 35 billion kg of grain each year in the storage, transportation and processing stages, state-owned Xinhua News said late on Wednesday, citing a government report. The heavy pre-consumption loss is due to several factors, including outdated storage facilities, logistics equipment and processing techniques, according to the report, which was based on research by the National People’s Congress (NPC).
China imported 330,000 tonnes of pork in November, up 39.4% from a year earlier, customs data showed on Wednesday. While production has rapidly recovered, the country is still short. Imports for the first 11 months of 2020 were 3.95 million tonnes, the General Administration of Customs said, up 115% on the same period a year earlier. November imports were flat on the previous month’s 330,000 tonnes.
China’s pig herd has recovered to more than 90% of normal levels, according to the agriculture ministry, although many analysts are sceptical given still high hog and pork prices. Pork prices fell steeply during October but have been rising since last month and remain far above normal levels.
Beef imports in November were down 9.9% year on year to 170,000 tonnes, according to customs data. January-November beef imports were up 29.9% year-on-year at 1.91 million tonnes.
Argentina’s 2020/21 soybean planting area could turn out to be smaller than the projected 17.2 million hectares due to unusually dry weather, the Buenos Aires Grains Exchange said in its weekly crop report. Fields yet to be planted with soy in central and southern parts of the farm belt may not get planted due to lack of moisture as the sowing window closes. Some 77.2% of expected soy area has been planted so far. Some 61.2% of the 6.3 million hectares that the exchange expects to be planted with corn this season has been sown while 79.3% of the country’s expected 2020/21 wheat production has been harvested so far.
Argentine oilseed workers and grains inspectors said on Wednesday they will spend Christmas on strike, further bogging down agricultural exports by extending a work stoppage that started on Dec. 9. The latest offer from the CIARA-CEC chamber of soyoil manufacturers and exporters was issued late on Tuesday. It was rejected by the SOEA union of oilseed workers and the Argentine federation of oilseed workers.
Russia will more than double its output of durum wheat, used in the production of pasta and couscous, to 1.8 million tonnes by 2025, its agriculture ministry said, following President Vladimir Putin’s criticism of rising pasta prices. Putin criticised a rise in food prices earlier in December as the COVID-19 crisis squeezes Russians’ incomes. Officials responded with a list of measures to stabilise food price inflation, including a grain export quota and a wheat export tax.
Grain harvest in Russia amounts to 133 mln tonnes in the net weight in 2020, including 85.9 mln tonnes of wheat, the Russian federal statistical service Rosstat says on Wednesday.
Ukraine’s grain exports have fallen 16% to 24.76 million tonnes so far this season, which runs from July 2020 to June 2021, economy ministry data showed on Wednesday. Traders have sold 8.34 million tonnes of corn, 3.75 million tonnes of barley and 12.29 million tonnes of wheat, the data showed.
Euronext wheat rose on Wednesday to its highest in more than three weeks, as a labour strike in Argentina fuelled a rally in Chicago and stirred the wheat market out of a pre-Christmas lull, traders said. March milling wheat was up 2.00 euros, or 1.0%, at 211.00 euros ($257.36) a tonne. The contract rose to as high as 211.50 euros, a level last seen on Nov. 27 as the breaching of chart resistance at 210 euros added to buying momentum.
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