Written Commentary
TODAY—WEEKLY ETHANOL STATS—
Overnight trade has SRW Wheat down roughly 8 cents, HRW down 7; HRS Wheat down 3, Corn is down 7 cents; Soybeans down 7; Soymeal down $4.00, and Soyoil unchanged.
Chinese Ag futures (May) settled down 6 yuan in soybeans, up 8 in Corn, down 12 in Soymeal, up 72 in Soyoil, and up 66 in Palm Oil.
Malaysian palm oil prices were up 54 ringgit at 3,626 (basis April) lifted by a jump in Feb 1-10 exports versus comparable month ago.
Conditions in Brazil will continue to be favorable.
A close monitoring of the distribution of rain in Argentina is still warranted in the first week of the outlook due to moisture stress that will increase in some pockets of the nation. Critically dry conditions are still not expected through next Tuesday. Last evening’s GFS model run suggested greater rainfall in southern and central Argentina Feb. 19 – 22 due to a frontal boundary.
The player sheet had funds net sellers of 5,000 SRW Wheat; sold 22,000 Corn; net bought 11,000 Soybeans; bought 2,000 lots of Soymeal, and; net bought 7,000 Soyoil.
We estimate Managed Money net long 21,000 contracts of SRW Wheat; long 372,000 Corn; net long 196,000 Soybeans; net long 77,000 lots of Soymeal, and; long 126,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 2,500 contracts; HRW Wheat up 2,100; Corn up 6,000; Soybeans up 6,900 contracts; Soymeal up 6,200 lots, and; Soyoil up 3,200.
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—Japan bought 86,845t U.S./Canadian wheat—Philippines bought 240,000t optional-origin feed wheat—Egypt seeks 30,000t optional soyoil, 10,000t sunoil.
Strong export demand will cut into already tight U.S. supplies of corn and soybeans by more than previously forecast, the U.S. Agriculture Department (USDA) said on Tuesday. If realized, the U.S. corn and soybean stockpiles would be the smallest in seven years before the next U.S. crop is harvested. Forecasts for low supplies have spurred importers and domestic processors to buy up crops ahead of potential shortfalls. But the corn stock outlook was still higher than expected, sparking a sell-off in the futures market that had hit a 7-1/2-year high ahead of the report’s release. Traders wondered if a less-than-expected increase in the corn export forecast signaled the United States might fail to meet the recent spike in corn demand from China.
The U.S. Department of Agriculture’s monthly supply and demand update on Tuesday did not exactly deliver the supportive news that corn bulls were hoping for, sending Chicago-traded corn futures on their steepest fall following a major government report since July. China’s strong corn prices and increased purchases of the yellow grain and other feed ingredients have long suggested thinning inventories in the country. USDA boosted Chinese corn imports on Tuesday, but the rise in projected use did not offset that additional supply, instead driving up domestic stocks. That lifted projected global corn supplies, against market expectations, and USDA’s estimate of Chinese corn stocks oddly remains little changed from year-ago levels.
Wire story reported U.S. farmer’s eye range of good planting options after biggest grains rally in years. Eager for next soybean crop that was invested in a faster-maturing variety of soy seeds in hopes of beating other farmers to harvest the crop in mid-September, more than a month earlier than usual. U.S. farmers said they are signing contracts to sell the corn and soy crops they will harvest in autumn, months before they have even planted them, looking to take advantage of boom times after years of oversupply, trade wars and low prices. Some are waiting to sell, betting on even higher prices. A dozen farmers interviewed by Reuters said 2021 is shaping up to be their most profitable season in years as corn futures have rallied to their highest since June 2013 and soybean futures to their highest since June 2014. They are working to pay off debts and update machinery after years of sluggish markets left them dependent on government payouts. Their fortunes have changed as food supplies tighten worldwide because of rising demand from China and as governments look to build stocks of food during the COVID-19 pandemic, spurring global food inflation. Early forecasts seen by Reuters predict record or near-record combined acres of soybeans and corn so farmers hope they can earn a premium by delivering soybeans when supplies are still scarce.
China’s imports of Brazilian soy will resume in April; Imports from U.S. remain relatively strong – Refinitiv Commodities Research
BRAZIL SOY EXPORTS SEEN REACHING BETWEEN 6 MILLION TNS AND 7.63 MILLION TNS FEBRUARY VERSUS 6.6 MILLION TNS IN SAME YEAR AGO MONTH – ANEC
BRAZIL CORN EXPORTS SEEN REACHING 534,817 TNS IN FEBRUARY VERSUS 415,282 TNS FORECAST IN SAME MONTH A YEAR AGO – ANEC
Argentine truckers ended a 20-day strike that had blocked access to ports in Buenos Aires province following a deal struck with local officials to increase freight-hauling rates. Trucks owners grouped in the informal TUDA association began blocking highways last month, making it particularly hard for barley to reach export terminals in the Buenos Aires port of Necochea. “There were two China-bound Panamax vessels at Necochea port waiting to load. The buyers were worried because they need malting barley by the end of February. If the strike continued, the buyers would have had to switch to another supplier, like Canada or France. China is scooping up millions of tonnes of barley from France, Canada and Argentina to feed livestock, as shipments from China’s usual barley supplier, Australia, have fallen victim to a trade fight between the two countries.
Farm office FranceAgriMer on Wednesday increased its forecast of French soft wheat exports outside the European Union’s 27 countries this season to 7.45 million tonnes from 7.27 million tonnes estimated last month.; That was 45.1% below a record 13.57 million tonnes in 2019/20.
Forecast French soft wheat stocks at the end of the current 2020/21 season were stable compared with last month at 2.5 million tonnes, FranceAgriMer’s cereal supply and demand data showed; —Projected French barley stocks at the end of 2020/21 were cut to 1.0 million tonnes from 1.1 million last month—Maize ending stocks were stable compared with January’s estimate at 1.9 million tonnes.
Euronext wheat was little changed on Tuesday as traders awaited world crop forecasts from the U.S. Department of Agriculture (USDA) while seeing limited immediate threat to European crops from a cold spell. March milling wheat was up 0.25 euros or 0.1% at 226.75 euros a tonne.
Satellite imagery suggests recent torrential rains in South Africa likely caused vegetation density declines in some major producing areas— However, ample soil moisture levels and expected cool, and near-average rainfall suggests positive weather to end grain fill in most areas—- Corn production is still posed to be the second largest after 2017, and on track to exceed last year’s large crop.
India’s January soymeal exports jumped 484% year on year to 336,390 tonnes as a rally in global prices to their highest in 6-1/2 years made shipments from the country lucrative for European and Asian buyers. Higher exports from India could trim shipments of South American soymeal into Asia and support local soybean prices despite a bird flu outbreak hitting demand from the local feed industry. India’s soymeal exports more than tripled to 950,134 tonnes in the first four months of the 2020/21 marketing year that started on Oct. 1. India’s soymeal exports could jump to more than 2 million tonnes in the 2020/21, from 825,000 tonnes shipped the previous year.
Malaysia palm oil inventories rise more than expected in January as exports slump – Reuters News
Exports of Malaysian palm oil products for Feb. 1-10 rose 53.94% to 400,375 tonnes from 260,080 tonnes shipped during Jan. 1-10, cargo surveyor Intertek Testing Services said.
Malaysia’s palm oil exports during the Feb 1-10 period are estimated up 47% on month at 399,529 metric tons, cargo surveyor AmSpec Agri Malaysia said.
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.
