July 2 Global Ag News Headlines
Overnight trade has SRW down roughly 1 cent, HRW down 1; HRS Wheat up 1, Corn is up 2 cents; Soybeans up 1, Soymeal down $0.50, and Soyoil up 15 points.
For the week, SRW Wheat prices are up roughly 21 cents; HRW up 13; HRS up 8; Corn is up 37 cents; Soybeans up 39; Soymeal up $14.00, and; Soyoil up 105 points. Crushing margins are up 5 cents at 91; Oil share unchanged at 32%.
Chinese Ag futures (Sep) settled down 2 yuan, down 6 in Corn, up 3 in Soymeal, up 76 in Soyoil, and up 28 in Palm Oil.
Malaysian palm oil prices were up 12 ringgit at 2,342 (basis September) at midsession on costlier rival vegoils.
U.S. Weather Forecast
Shower and thunderstorm activity will be drying up as we go through the day today in the Midwest; things then look to be fairly quiet for the next 5 days.
The 6 to 10 day forecast for the Midwest had some changes as the GFS model has turned drier with any rains for the period falling in the far northern Midwest and missing the cropland.
The 11 to 16 day sees ridging centered over the southern Plains and southern Rockies; rainfall would run average to below with temps in the east to run below average and, average to a bit above average in the west.
Showers and thunderstorms for the Southern Plains are possible in around 85% of the region over the next 5 days with most of it falling early Fri-Sat
The 6 to 10 day forecast sees most of Kansas to be dry through the period; showers and thunderstorms look to produce light to moderate rain amounts in eastern Oklahoma and northern Texas
The 6 to 10 day for the Delta sees rains to fall in most of the region.
The player sheet had funds net buyers of 6,000 contracts of SRW Wheat; net bought 35,000 Corn; bought 11,000 Soybeans; net bought 7,000 lots of soymeal, and; bought 2,000 Soyoil.
We estimate Managed Money net short 41,000 contracts of SRW Wheat; short 208,000 Corn; net long 64,000 Soybeans; net short 39,000 lots of Soymeal, and; short 2,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 5,800 contracts; HRW Wheat up 205; Corn down 27,500; Soybeans up 17,200 contracts; Soymeal up 4,100 lots, and; Soyoil up 4,800.
Deliveries were 187 Soymeal; 223 Soyoil; 45 Rice; ZERO Corn; 96 HRW Wheat; ZERO Oats; ZERO Soybeans; 133 SRW Wheat, and; 535 HRS Wheat.
There were changes in registrations (Soyoil down 504; Rice up 80; HRW Wheat up 80)—Registrations total 162 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans ZERO; Soyoil 3,141 lots; Soymeal 511; Rice 45; HRW Wheat 97, and; HRS 488.
TODAY—WEEKLY EXPORT SALES—NOON CLOSE TODAY—NO TRADE FRIDAY—
Tender Activity—Jordan seeks 120,000t optional-origin wheat—Thailand bought over 100,000t optional-origin feed wheat–
The USDA May soybean crush was pegged at 180 mil bu (estimate was 181 mil bu) versus 183 mil a month ago and 165 mil last year
—Soyoil stocks were 2.446 bil lbs (estimate was 2.372 bil) versus 2.602 bil last month and 2.018 bil a year ago
—Soymeal stocks were 442,000t versus 341,000t last month and 276,000t a year ago
The USDA said 300 mil bu of corn was used for fuel alcohol in May, up from 245,000 mil a month ago and 459 mil last year.
—DDGS production in May was 1.234 mt versus 1.014 mt last month and 1.943 mt a year ago
U.S. ethanol production for the week ended June 26th averaged 900,000 barrels per day (up 0.8% versus a week ago, down 16.7% versus a year ago); stocks totaled 20.2 mil barrels (down 4.1% versus a week ago, down 11.7% versus last year); corn use for the week was 91.9 mil bu (91.2 mil last week) and versus the 96.8 mil bu needed to meet USDA projections.
US ethanol inventories are now at their lowest level since January 2017; the consumption of leftover ethanol barrels is good news for US corn, which has held a bearish view of ethanol demand in the US since the coronavirus outbreak forced many plants to shut their doors either temporarily or permanently; ethanol production also continued to recover
A top House Democrat accused the Trump administration of having “squandered” the situation in Hong Kong to “sell soybeans” to China; says there’s a catch: “We haven’t even sold the soybeans”; during a hearing on the Hong Kong’s diminishing independence from Beijing, Mr Sherman accused the White House of putting its partial trade deal with China above human rights.
The novel coronavirus delayed the arrival of seasonal immigrants who normally help harvest U.S. wheat, leaving farmers to depend on high school students, school bus drivers, laid-off oilfield workers and others to run machines that bring in the crop; as combines work their way north from the Southern Plains of Texas and Oklahoma, farmers and harvesting companies are having a hard time finding and keeping workers.
World food prices rose in June to post their first increase of 2020 and mark a slight rebound after the sharp falls triggered by the coronavirus pandemic, the United Nations food agency said; the Food and Agriculture Organization (FAO) food price index averaged 93.2 points last month, up 2.4% on May; amid continued market uncertainty, the prices of vegetable oils, sugar and dairy products rebounded to multi-month highs following sharp declines in May, while in the cereals and meat indices, most prices remained under downward pressure.
FAO also revised up its forecast for the 2020 cereal season by some 9.3 million tons, foreseeing global output of almost 2.790 billion tons — a 3.0% increase on 2019’s record harvest; the bulk of the monthly increase reflected an upward revision to Australia’s wheat production estimates.
The forecast for world cereal utilization in 2020/21 hit 2.735 billion tons, just over 43 million tons above the 2019/20 level
FAO’s latest forecast for world trade in cereals in 2020/21 stands at 435.0 million tons, up 2.1% from 2019/20 levels and representing a new record high.
FAO’s estimate for world cereal stocks by the close of seasons in 2021 rose by 2 million tons from the previous month to 929 million tons — a 6.0% increase year-on-year.
Mexico celebrated the implementation of a new free trade agreement with Canada and the United States that it hopes will lead to more investment in its struggling economy; the President said the accord, which replaces the North American Free Trade Agreement, will provide greater certainty to the three countries in their commercial relationships; their supply chains are deeply intertwined; during the COVID-19 pandemic, there was pressure from the U.S. government to allow some Mexican assembly plants to quickly reopen or remain open to cause less interruption.
- CHINA SELLS 4,099,101 TONNES OF CORN, OR 100% OF TOTAL OFFER, AT AUCTION OF STATE RESERVES -TRADE CENTRE
- AVERAGE SELLING PRICE OF CORN IS 1,879 YUAN/TONNE
The port authority of Brazil’s second busiest port for grains and sugar, Paranaguá, said on Wednesday that two shiploaders at the port were displaced by strong winds on Tuesday; the authority said in a statement that some terminals have no power to move conveyor belts, causing disruptions to some loading operations.
- BRAZIL SOYBEAN EXPORTS IN JUNE TOTALED 13.750 MLN TNS VS 8.552 MLN TNS IN THE SAME MONTH IN 2019 – GOVT TRADE DATA
- BRAZIL BEEF EXPORTS IN JUNE TOTAL 152,500 TNS VS 114,400 TNS IN THE SAME YEAR AGO MONTH A YEAR AGO – GOVT TRADE DATA
- BRAZIL PORK EXPORTS IN JUNE TOTAL 87,000 TNS VS 56,600 TNS IN THE SAME YEAR-AGO MONTH – GOVT TRADE DATA
- BRAZIL POULTRY EXPORTS IN JUNE TOTAL 320,800 TNS VS 369,700 TNS IN THE SAME YEAR-AGO MONTH – GOVT TRADE DATA
- BRAZIL’S SOY CRUSHER GROUP ABIOVE RAISES 2020 EXPORT FORECAST FOR THE OILSEEDS TO 79.5 MILLION TNS FROM 78 MILLION TNS IN PREVIOUS FORECAST
- ABIOVE SAYS SEES SOYBEAN PRODUCTION IN 2020 AT 125 MILLION TNS VERSUS 124.5 MILLION TNS IN PREVIOUS FORECAST
Ukraine’s government and unions agreed grain trade rules but not export quotas for the 2020/21 July-June season which began on Wednesday, with the latter delayed until at least Aug. 10, the UGA grain traders union said; Ukraine and grain traders sign a memorandum each year under which the government promises to impose no export restrictions on the agreed volume of grain and keep export rules unchanged; the economy minister said last month the memorandum would include wheat export quotas for the season that started July 1 and that the government planned no curbs on corn and barley sales.
Analyst APK-Inform increased its forecast for Ukraine’s 2020 soy bean crop to 4.2 million tons from a previous outlook of 4.07 million tons; Ukraine, European largest soy bean grower, is likely to export 2.5 million tons of the commodity in the 2020/21 September to August season; last month APK-Inform was forecasting exports of 2.35 million tons of soy in 2020/21
Malaysia will take legal action against the European Union’s restrictions on palm oil-based biofuels with the World Trade Organization (WTO), calling the policy a “discriminatory action”; the Plantation Industries and Commodities Minister said the EU’s renewable energy directive “restricts free trade practices”.
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.