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Global Ag News for Oct 28


Overnight trade has SRW Wheat down roughly 13 cents, HRW down 14; HRS Wheat down 6, Corn is down 7 cents; Soybeans down 11;  Soymeal down $5.50, and Soyoil down 55 points.

Chinese Ag futures (January) settled up 63 yuan in soybeans, up 8 in Corn, down 7 in Soymeal, down 36 in Soyoil, and up 8 in Palm Oil.

Malaysian palm oil prices were down 23 ringgit at 3,042 (basis January) at midsession on further position-evening and weaker rival vegoils.

U.S. Weather Forecast: Significant precipitation is still expected in West Texas and from the Texas Panhandle through Oklahoma and south-central Kansas into Thursday. This will significantly increase soil moisture and be beneficial for newly planted winter crops.

South America Weather Forecast: Brazil has rain falling in most of the nation at one time or another, but rainfall will be least frequent and least significant in the interior south. Argentina will receive showers today before dry weather occurs for about a week.

Europe/Black Sea Region Forecast: Showers occur periodically throughout Europe with the far west and north seeing the highest frequency of rain and the greatest amounts. Weather remains favorable for at least a part of the driest areas from eastern Ukraine to western parts of Russia’s Southern Region Friday through Monday will receive at least a few showers. No other precipitation is advertised for the balance of the next ten days to two weeks ending Nov. 12.

The player sheet had funds net sellers of 2,000 SRW Wheat; sold 4,000 Corn; sold 5,000 Soybeans; sold 3,000 Soymeal, and; net sold 2,000 Soyoil.

We estimate Managed Money net long 40,000 contracts of SRW Wheat; long 245,000 Corn; net long 248,000 Soybeans; net long 93,000 lots of Soymeal, and; long 88,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures up roughly 5,400 contracts; HRW Wheat up 1,000; Corn up 9,100; Soybeans down 22,200 contracts; Soymeal down 1,600 lots, and; Soyoil up 785.

There were no changes in registrations—Registrations total 109 contracts for SRW Wheat; ZERO Oats; Corn 1; Soybeans 1; Soyoil 1,907 lots; Soymeal 250; Rice ZER0; HRW Wheat 135, and; HRS 1,195.

Tender Activity—S. Korea bought 77,900t U.S. wheat, 27,900t Canadian wheat—

US ethanol production and inventories are expected to drop again this week, says Futures International, which forecasts ethanol production to fall 6,000 barrels per day to 907,000 barrels per day, which would be the lowest they’ve been since mid-September; meanwhile, the firm forecasts ethanol inventories to fall by anywhere from 100,000 barrels to 300,000 barrels–which could potentially put ethanol inventories at their lowest levels since December 2016; an inventory drop combined with higher production would be a hopeful sign for grains traders looking to see US ethanol domestic demand rebound.

Brazilian corn prices on Tuesday surpassed a 2007 record, reaching 81.48 reais ($14.49) per sack, according to the benchmark index of the Brazilian agricultural think tank Cepea; through October, the price of corn has jumped 28.05%; Brazil is experiencing an increase in various food prices, including soy beans and rice; the Latin American nation has temporarily lifted import tarifs for corn, rice and soy beans; higher corn prices has put pressure on Brazil’s huge poultry and beef sectors, with corn a key animal feed.

Rains in the Southeast ease Brazil corn crop concerns – Refinitiv Commodities Research

With beneficial rainfall returning to most major first and second crop producing areas, 2020/21 total Brazil corn production is unchanged at 107 million tons; total corn area remains at 19 million hectares, up 5% from last season mostly due to increases in second crop corn area; the estimate is 0.5 million hectares below USDA’s World Agricultural Outlook Board (WAOB) estimate released in October, which assumes total corn sowings at 19.5 million hectares and national-level yield of 5.64 tons per hectare; Brazil’s agriculture state agency (CONAB) in its October outlook (08 October) lowered total corn area nearly 1 million hectares to 18.5 million acres and production to 105.2 million tons.

Recent rains help jump start Brazil soybean sowings – Refinitiv Commodities Research

As favorable rainfall returns to most major producing regions, stable area and yield estimates keep 2020/21 soybean production at 129 million tons; the outlook is 4 million tons below USDA’s World Agricultural Outlook Board (WAOB) estimate released in October, which has sowings at 38.6 million hectares and yield at 3.45 tons per hectare; Brazil’s agriculture state agency (CONAB) in its October outlook kept area at 37.9 million acres and production at 133.7 million tons.

Russia has reported an outbreak of highly pathogenic H5N8 avian influenza on a farm in the western part of the country, the World Organisation for Animal Health (OIE) said; the outbreak in the Kostromskaya region killed more than 14,000 birds and led to the slaughtering of the rest of the flock of 283,000 animals.

Ukraine’s grain exports have fallen 16.4% to 15 million tons so far in the season that runs from July 2020 to June 2021 due to a lower corn shipments, the economy ministry said; traders sold 1.54 million tons of corn compared with 3.59 million tons on the same date last year; wheat exports fell to 10.1 million tons from 10.9 million.

Soft wheat exports from the European Union and Britain in the 2020/21 season that started on July 1 had reached 6.44 million tons by Oct. 25, official EU data showed; that was 30% below the volume cleared by Oct. 27 last year.

Soybean imports into the European Union and Britain in the 2020/21 season that started on July 1 totaled 4.47 million tons by Oct. 25, official EU data showed; that was 4% above the volume imported in the previous 2019/20 season.

European wheat futures in Paris hit a 10-day low on Tuesday, pressured by improved crop weather in rival exporter Russia and concern over the worldwide surge in COVID-19 cases; benchmark December milling wheat was down 0.3%, or 0.75 euros, at 206.50 euros ($244.06) a ton after briefly touching the lowest level since Oct. 16 at 206.25 euros.

Indonesia sets crude palm oil (CPO) export tax at $3 per ton for the month of November, Trade Ministry document showed; the tax was unchanged from October.

Malaysian Palm Oil Board is hopeful of palm oil prices staying above 3,000 ringgit ($720.38) per ton, which will ensure sustainability of the industry, its chairman said; the surge in palm oil price was driven by demand from key buyers in China and India; Malaysia palm oil price touched 3,134 ringgit per ton on Monday as compared to a low of 2,021.50 ringgit per ton on May 12, 2020.

Crude palm oil prices may ease slightly to 2,650 ringgit ($636) per ton- to-2,800 ringgit a ton in the first quarter of 2021 helped in part by higher output, Palm Oil Analytics co-founder said; for now, palm oil prices are likely to stay supported at 2,800 ringgit per ton-to-2,900 ringgit per ton until year-end, and could hit 3,000 ringgit per ton if production falls in October and November; expects Malaysia’s palm oil year-end inventory at around two million tons, 0.5% lower from a year earlier; year-to-date crude palm oil averaged at 2,545 ringgit a ton, highest in three years, aided by lower production and improving exports since June; physical palm price discount to bean oil will remain $70-to-$100 on tighter soybean scenario in Brazil, keeping prices high, while, olein prices will ease a little in November and December; coronavirus pandemic, U.S soybean production outlook as well as bio-diesel mandates, and U.S.-China trade war will be key factors that will influence palm oil prices in 2021.

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.

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