Overnight trade has SRW down roughly 3 cents, HRW down 5; HRS Wheat steady, Corn is down fractionally; Soybeans down 2, Soymeal down $0.50, and Soyoil down 5 points.
Chinese Ag futures (Sep) settled down 74 yuan, down 2 yuan in Corn, down 28 in Soymeal, down 16 in Soyoil, and up 10 in Palm Oil.
Malaysian palm oil prices were down 22 ringgit at 2,010 (basis July) at midsession on weakness in soyoil and ideas of higher output in Indonesia.
U.S. Weather Forecast
The biggest precipitation changes in last night’s GFS model run was in the May 26 – 28 period; this run tried to suggest a couple of slow moving weather disturbances to impact the Delta, southeastern states, and southern Corn Belt in this timeframe which led to significantly wetter conditions compared to the midday GFS model.
The midday GFS model run yesterday was aggressive with a trough of low pressure in the western half of the United States May 26 – 28 that led to significant rain in areas such as the Hard Red Winter Wheat Region, Pacific Northwest, and part of the Northern Plains; last night’s GFS model removed the trough and replaced it with a ridge which caused moisture to be taken out.
South America Weather Forecast
Last night’s GFS model run showed little to no change with a significant rain event suggested for interior southern Brazil, Mato Grosso do Sul, and southwestern Mato Grosso, Brazil May 21 – 22; a round of rain is likely with additional relief to Safrinha corn areas
Black Sea/Europe region
Remains about the same as it has been most days this week; rain will continue over this first week of the outlook from Spain and southern France through western and northern Ukraine into Western Russia and the moisture will maintain favorable crop conditions throughout these areas
Net drying will occur to the north and south of this region resulting in some concern over continued drying in both regions especially in the southern Balkans where temperatures will be warm enough to accelerate drying rates for a while
The player sheet had funds net sellers of 10,000 contracts of SRW Wheat; net sold 13,000 Corn; net sold 10,000 Soybeans; net sold 2,000 lots of Soymeal, and; net sold 3,000 Soyoil.
We estimate Managed Money net short 12,000 contracts of SRW Wheat; net short 183,000 Corn; net long 15,000 Soybeans; net short 12,000 lots of Soymeal, and; net short 10,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 6,200 contracts; HRW Wheat up 905; Corn down 4,200; Soybeans up 12,300 contracts; Soymeal up 2,500 lots, and; Soyoil up 1,900.
Deliveries were 58 Soymeal; 15 Soyoil; ZERO Rice; ZERO Corn; ZERO HRW Wheat; ZERO Oats; 1 Soybean, and; 2 SRW.
There were changes in registrations (Rice down 3)—Registrations total 16 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 221; Soyoil 3,495 lots; Soymeal 547; Rice 230; HRW Wheat 17, and; HRS Wheat 488 contracts.
TODAY—WEEKLY EXPORT SALES—LAST TRADING DAY FOR MAY FUTURES—
Tender Activity—Tunisia seeks 67,000t optional-origin wheat—Ethiopia seeking 600,000t optional-origin wheat—Jordan re-tenders for 120,000t optional-origin wheat—Algeria bought 500,000t optional-origin wheat—Algeria seeks 40,000t optional-origin corn—S. Korea seeks 46,000t S. American only corn, 20,000t soymeal—
Trade estimates for USDA weekly grain, soy export sales – Reuters News
All estimates are quoted in tonnes.
||Trade estimates for 2019-20
||Trade estimates for 2020-21
||USDA week-ago data for 2019-20
||USDA week-ago data for 2020-21
- China will implement phase 1 trade deal with U.S. – COFCO exec
- China needs to use huge soybean stocks from May-Sept -COFCO exec
- Bad soybean crush margins to remain – COFCO exec
- China’s soybean imports in 2019/20 seen at 87.50 mln T -exec
- U.S. imports to be 13.70 mln T -exec
- Brazil imports to be 63.73 mln T -exec
China is set to speed up purchases of U.S. farm goods and will implement the Phase 1 trade deal with the United States, an executive at state-owned agriculture trading house COFCO said at an online industry conference; Beijing pledged to buy additional U.S. agriculture products worth $32 billion over two years above a 2017 baseline under the Phase 1 trade deal signed in January; China will still implement the trade deal and chances are high that China will speed up purchases
U.S. ethanol production for the week ended May 8th averaged 617,000 barrels per day (up 3.2% versus a week ago, down 41.3% versus a year ago); stocks totaled 24.2 mil barrels (down 5.6% versus a week ago, up 8.7% versus last year); corn use for the week was 62.9 mil bu (61.0 mil last week) and versus the 93.5 mil bu needed to meet USDA projections
Ethanol production in the US is finding its way higher after plummeting to record lows in previous weeks; two weeks prior, ethanol production had found its record low at 537,000 barrels per day; the data suggests that ethanol production cuts are having their intended effect, a possibly bullish factor for corn futures today
Pacific Ethanol, Inc. reported 184.9 million gallons of ethanol was sold in the first quarter, down from 211.8 million gallons in the first quarter 2019 while total production gallons sold was 116.5 million versus 122.5 million; first quarter net sales were $311.4 million compared to $355.8 million in the first quarter 2019 while costs of goods sold fell more than $33 million to $324.3 million in the quarter profiled; we are encouraged by recent positive trends in the fuel market, which we expect will accelerate as states begin to relax stay at home directives; he said over 60% of Pacific Ethanol’s production capacity was idled due to lower demand and negative margin environment.
Wire story reports there are just under 16 weeks left in the 2019-20 U.S. corn marketing year, and balance-sheet shakeups are still in progress, particularly amid the unprecedented fall in ethanol production; the U.S. Department of Agriculture has recently made some aggressive changes to projected corn demand as a result, with the latest adjustments coming on Tuesday; some of those moves warrant additional scrutiny, as they could drastically alter the expected supply levels four months from now; that is especially the case with corn used in the making of ethanol, as production rates still must recover significantly, and quickly, in order to prevent more corn demand from being lost.
- ADM CEO JUAN LUCIANO SAYS REMAINS OPTIMISTIC CHINA WILL MEET PHASE 1 TRADE DEAL COMMITMENTS ON U.S. AGRICULTURAL PURCHASES
- ADM CEO LUCIANO SAYS CHINA HAS BOOKED 25% OF ITS SOYBEAN NEEDS FOR AUGUST AND FEBRUARY, “COMPLETELY OPEN” FOR SEPTEMBER-JANUARY
- ADM CEO LUCIANO SAYS LOWER COMMODITY PRICES MAY LIMIT VALUE OF CHINA’S FIRST YEAR PHASE 1 PURCHASES, “BUT IT’S A TWO-YEAR AGREEMENT”
U.S. meat exports are surging even as the industry is struggling to meet domestic demand because of coronavirus outbreaks at processing plants that have sickened hundreds of workers and caused companies to scramble to improve conditions; although the situation could cause concern that American workers are risking their health to meet foreign demand, experts say it shouldn’t because much of the meat sold to other countries is cuts that Americans generally don’t eat; and at least one of the four major processors says it has reduced exports during the pandemic; if companies manage to keep their workers healthy and plants operating, there should be plenty of supply to satisfy domestic and foreign markets
More Mexican steaks and other beef cuts are headed north of the border after the coronavirus outbreak has hobbled U.S. meat processing plants, potentially offsetting fears of shortages affecting businesses from fast-food chains to grocery stores but angering American ranchers; the Mexican industry chalks up the export growth to new safety measures adopted by plants, as well as relatively smaller-scale operations that have so far kept infections at bay and business humming.
China is allocating more low-tariff import quotas for corn this year and may expand its use of wheat quotas as it seeks to step up farm purchases from the United States and meet a pledge to comply with global trade rules; China has a 95% self-sufficiency target for its rice, corn and wheat consumption, but allows a certain volume of imports through a tariff rate quota (TRQ) system; the quotas allow importers to buy specified volumes with duties as low as 1%, compared with 65% without the quotas; however the opaque system has been widely criticized by grain exporters who say Beijing does not issue the promised volume of quota, limiting purchases from overseas.
China’s commerce ministry said on Thursday it will make a just and objective final ruling on its anti-dumping and anti-subsidy cases against barley from Australia, amid escalating bilateral tensions over the COVID-19 pandemic
China will allow imports of barley and blueberries from the United States; imports that meet the relevant requirements will be allowed effective Thursday; the move comes after China agreed in January to boost its imports of U.S. agricultural products by an additional $32 billion over two years as part of a Phase 1 deal that marked an easing in trade tensions between the two countries; it also comes ahead of China’s decision in an antidumping probe on barley imports from its top supplier Australia
Grains flow improved on Argentina’s Parana River after debris from a landslide slowed cargo ships over the weekend, the local ports chamber said, while lower-than-normal water levels continued to put downward pressure on traffic rates; May is the peak corn and soy harvesting season in Argentina; the collapse of a section of riverbank near the Rosario grain ports hub over the weekend caused concern that shipments would stall as dredgers went to work clearing the debris.
Ukraine’s grain exports have reached a record 52 million tons so far in the 2019/20 season that began last July, up around 19% year on year, the economy ministry said; the exported volume included 19.3 million tons of wheat, 27.2 million tons of corn and 4.7 million tons of barley; Ukraine’s grain exports will increase to a record 52-55 million tons this season from 50 million in the 2018/19 season
Ukraine will not increase the wheat export quota for the 2019/20 July-June season, the Economy Ministry said; Ukraine is allowing the export of 20.2 million tons of wheat this season; exports reached 19.35 million tons as of May 13
Strong demand for European wheat exports and damage to crops from dry weather will likely weigh on EU wheat stocks this year and next, driving tightness in the market which could support prices, said Strategie Grains in a report
—The French agricultural consultancy has cut its forecast for carry-out stocks for the 2019-20 agricultural year by 1.1 million metric tons to 12.6 million tons and also cuts the same forecast for 2020-21 by 2.2 million tons to 11.4 million tons
—The group forecasts 34.3 million tons of EU wheat exports this year, 1.9 million tons more than its forecast last month
—For 2020-21, the reduction in stocks is driven by a cut to output forecasts amid concerns over dry weather damaging crops; Strategie cut its production forecast for next year by 2.1 million tons to 132.9 million tons
Wet weather will linger across much of Australia over the next three months, the country’s weather bureau said on Thursday, a forecast that could boost the fortunes of farmers
—There is an 80% chance that nearly all of Australia will receive above average rainfall between June 1 and Sept. 30, the Australian Bureau of Meteorology said; that would boost soil moisture available for recently sown wheat after three years of poor harvests amid sustained dry weather
—Australia’s chief commodity forecaster in March predicted a 40% rise in wheat output for the 2020/21 season as a break in the prolonged drought encouraged farmers to sow more grain.