Global Ag News for Jan 20

TODAY—COMMITMENT OF TRADERS —

Overnight trade has SRW Wheat up roughly 5 cents, HRW up 4; HRS Wheat up 1, Corn is up 7 cents; Soybeans up 13; Soymeal up $2.50, and Soyoil up 80 points.

For the week, SRW Wheat prices are up roughly 16 cents; HRW up 16; HRS up 13; Corn is up 43 cents; Soybeans up 57 cents; Soymeal up $9.00, and; Soyoil up 330 points. Crushing margins are up 5 cents at $0.79 (March); Oil share up 1% at 34%.

For the month, SRW Wheat prices are up roughly 13 cents; HRW up 27; HRS up 26; Corn is up 58 cents; Soybeans up 57 cents; Soymeal up $1.00, and; Soyoil up 315 points. Crushing margins are down $0.21 at $0.79; Oil share is up 1% at 34%

Chinese Ag futures (May) settled up 6 yuan in soybeans, down 26 in Corn, down 22 in Soymeal, up 16 in Soyoil, and up 20 in Palm Oil.

Malaysian palm oil prices were up 101 ringgit at 3,489 (basis April) on talk Indonesia hikes export tariffs.

In Brazil, conditions will continue to be good in most key production areas with a few exceptions. The northeast will still need more rain. Some erratic shower and thunderstorm activity will increase in this area Tuesday through next Thursday; though, more will be needed. An area from Rio Grande do Sul into Parana and southern Mato Grosso do Sul and also southern Paraguay will be notably wet through next Thursday with some flooding.

In Argentina, conditions will be mostly good for crops with a favorable mix of rain and sunshine. There will still be some flooding though due to too much rain in week 1 of the outlook in Corrientes, Misiones, and some immediate nearby areas. Some flooding is also still possible in northeastern Buenos Aires.     

The player sheet had funds net sellers of 8,000 SRW Wheat; bought 2,000 Corn; net sold 12,000 Soybeans; sold 6,000 lots of Soymeal, and; net bought 1,000 Soyoil.

We estimate Managed Money net even in SRW Wheat; long 392,000 Corn; net long 146,000 Soybeans; net long 66,000 lots of Soymeal, and; long 107,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures down roughly 635 contracts; HRW Wheat up 2,900; Corn up 21,900; Soybeans down 1,900 contracts; Soymeal up 1,400 lots, and; Soyoil up 80.

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—Jordan seeks 120,000t optional-origin wheat— Taiwan bought 85,340t U.S. wheat—S. Korea bought 60,000t optional-origin soymeal—

All Wheat sales are up 6%, shipments down 1% with the USDA forecasting a 2% increase

By class, HRW wheat sales down 5%, shipments up 2%, with USDA up 5%

SRW down 25%, shipments down 33% (USDA down 18%)

HRS up 7%, shipments up 2% (USDA up 1%)

Corn up 126%, shipments up 81% (USDA) up 43%

Soybeans up 83%, shipments up 80% (USDA up 33%)

Soymeal down 2%, shipments up 18% (USDA up 1%)

Soyoil up 4%, shipments up 5% (USDA down 3%)

U.S. farmers are expected to increase acreage of both soybeans and corn this year in response to high prices, Cynthia Nickerson, deputy chief economist at the U.S. Department of Agriculture (USDA), said. In an initial projection in November, the USDA had forecast an increase in the soybean area and slightly lower corn acreage in 2021. It will update its forecasts next month. Farmers reported some 10 million acres of prevented plantings last year, compared with 4-5 million typically.

U.S. soybean crushings likely rose to 5.817 million short tons in December, or 193.9 million bushels, according to the average forecast; estimates ranged from 192.0 million bushels to 195.0 million bushels. If realized, the crush would be up from the 191.0 million bushels processed in November and well above the December 2019 crush that totaled 184.7 million bushels. It would also be the largest December crush on record and the second-largest crush for any month, behind only October 2020.

The USDA is scheduled to release its monthly fats and oils report at 2 p.m. CST (2000 GMT) on Monday.

U.S. soyoil stocks at the end of December were estimated to have risen to 2.254 billion lbs, up from 2.118 billion lbs at the end of November and 2.134 billion lbs at the end of December 2019. Soyoil stocks estimates ranged from 2.200 billion to 2.358 billion lbs.

The U.S. oil industry is seeking to forge an alliance with the nation’s corn growers and biofuel producers to lobby against the Biden administration’s push for electric vehicles, but is so far meeting a cool reception, according to multiple sources familiar with the discussions. The effort marks an unusual attempt by the petroleum industry to cozy up to its long-time rivals, reflecting the scale of its concern over President Joe Biden’s sweeping measures to combat climate change and tamp down fossil fuels. While the oil industry and biofuels producers are natural competitors for space in America’s gas tanks, they share a desire to ensure a future for internal combustion engines.

Despite warnings that Chinese authorities might block Australian wheat amid an escalating political row, wheat exports to China surged last month, underscoring a year in which overall trade between the countries approached a record high. After three months in which there had been no wheat trade between the two countries, hundreds of thousands of tonnes changed hands in December, valued at A$248 million (US$191.2 million), according to preliminary trade data from the Australian Bureau of Statistics (ABS).

China had been relatively quiet in the U.S. corn market since its record buying streak last summer, but a string of much more expensive bookings this week would seem to be proof of the country’s dire need for the yellow grain. No one knows exactly how big China’s corn stockpiles are, but the sudden deficit of usable grain in the country appears to have manifested in rising prices, extremely active state corn auctions and record imports. The U.S. Department of Agriculture this week confirmed three separate sales of U.S. corn to China for delivery in the 2020-21 year that ends on Aug. 31. Those sales total 3.74 million tonnes, or 147 million bushels.

Harvesting delays in Brazilian soybean fields should continue throughout February after a drought pushed back plantings of the oilseeds, says a market intelligence coordinator at Hedgepoint Global Markets. The situation may delay deliveries of this year’s crop to global trading companies, as this is a season marked by strong pre-sales. Only up to 5 million tonnes of the new crop will be ready by end-January, according to calculations by another agribusiness consultancy, representing less than half of the available amount last season. The pace of harvesting in Brazil would only normalize in March. Brazilian farmers have pre-sold an estimated 60% of their soybean crop before harvesting, 20 percentage points above the historical average for the period citing attractive prices. Despite planting delays caused by a drought last year, estimates for Brazil’s soybean crop at a record of 132 million tonnes in the 2020/2021 cycle. Given good prices for the oilseeds this year, farmers in Brazil could also increase planted area next season by 2%-3%.

Argentina’s upcoming soy crop is expected at 46 million tonnes, the Buenos Aires Grains Exchange said, citing dry, hot weather as its reason for shaving a preliminary estimate of 46.5 million tonnes.

“Due to high temperatures and limited water supply in key farming regions, our soybean production estimate has been reduced to 46 million tonnes,” the exchange said. Planting of Argentina’s 2020/21 soy crop ended over the last week on a total estimated area of 17.2 million hectares. Soy harvesting starts in March and ends in May.

Soybean meal exports from Argentina are recovering strongly after labour strikes decimated soybean processing in December. So far this month until Wednesday, 2.16 million metric tons of flour have been shipped from the main ports, according to data from the Argentine shipping agency Alpemar. That figure exceeds all of January volumes in 2018, 2019 and 2020.

Ukraine’s grain exports have fallen almost 20% to 28.7 million tonnes this season, which runs from July 2020 to June 2021, economy ministry data showed. Traders sold 12.99 million tonnes of wheat, 10.37 million tonnes of corn and 3.9 million tonnes of barley, the data showed.

Euronext wheat edged lower on Thursday as traders assessed a potential share for European supplies in an Algerian import purchase while reacting to fluctuating prices in Chicago. March milling wheat settled down 1.25 euros, or 0.5%, at 229.75 euros ($278.48) a tonne. The fall broke a three-day rally that had seen Euronext’s spot contract recoup heavy losses from last Friday. Paris prices were pressured on Thursday by lower U.S. wheat futures and a weaker corn rally after reaching 7-1/2 year highs.

Euronext is developing cash-settled futures for Ukrainian wheat to cater for the growing Black Sea grain export market, the European market operator said.

The South African Weather Service said on Thursday extensive damage to crops and waterlogged farmlands will likely lead to significantly impaired agricultural output in parts of the Free State and Northern Cape provinces after heavy rains. The affected provinces are maize growing areas.

S.Africa’s 2020/21 maize planting area up 6% on good weather, higher prices.

ASIA RICE-India prices hit 2-yr peak; Vietnam grapples with supply woes –

Rice export prices in India rose to their highest level in nearly two years on the back of healthy demand and an appreciating rupee, while a slow harvest squeezed supply and lifted Vietnamese rates. Top exporter India’s 5% broken parboiled variety was quoted at $390-$394 per tonne this week, the highest since March 2019. Last week, prices were at $385-$391. “Asian and African buyers are aggressively making purchases from India. Even after marginal price rise, Indian rice is far cheaper than Thai rice,”. Vietnam’s 5% broken rice rose to $505-$510 per tonne on Thursday from $500-505 last week on tight supplies. “Though the winter-spring harvest has started, supplies remain low. Only 5%-6% of the crop has been harvested, and it won’t peak until late February or early March.