China halts buying but markets hold. Opportunities to consider now.
Here is the link to our weekly video https://attendee.gotowebinar.com/recording/3095548951471641103
Note: In our discussion we discussed the fact that the commercials are long – very unusual. Matt Nolan researched this and found the following
Going back to 2006 (when reporting started) commercials have only been long one time before this last update, and that was the week prior
ADMIS AM Commentary
Overnight trade has SRW down roughly 3 cents, HRW down 7; HRS Wheat up 1, Corn is unchanged; Soybeans up 4 cents, Soymeal up $1.00, and Soyoil up 25 points.
Chinese Ag futures (Sep) settled down 35 yuan, down 3 yuan in Corn, down 3 in Soymeal, down 6 in Soyoil, and up 14 in Palm Oil.
Malaysian palm oil prices were up 31 ringgit at 2,316 (basis August) at midsession on suspected lower May output.
U.S. Weather Forecast
Tropical Depression Three will develop into a Tropical Storm in the next day or two; though, it will not move much until Friday when it possibly advances into the central part of the Gulf. Last night’s GFS model run suggested associated moisture getting farther into Florida and spreading more into Alabama and Georgia as well Saturday through Jun. 10. Also showed the main remnant disturbance from this shifting to the west some and then moving up into the western Corn Belt Jun. 9 – 10.
The player sheet had funds net sellers of 3,000 contracts of SRW Wheat; net sold 8,000 Corn; net sold 1,000 Soybeans; were net even in Soymeal, and; net bought 2,000 Soyoil.
We estimate Managed Money net short 1,000 contracts of SRW Wheat; net short 263,000 Corn; net short 2,000 Soybeans; net short 43,000 lots of Soymeal, and; are net long 6,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 3,900 contracts; HRW Wheat up 300; Corn up 14,400; Soybeans up 515 contracts; Soymeal up 270 lots, and; Soyoil up 3,700.
There were no changes in registrations—Registrations total 11 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans ZERO; Soyoil 3,495 lots; Soymeal 511; Rice 121; HRW Wheat 17, and; HRS Wheat 488 contracts.
TODAY—WEEKLY DELIVERABLE STOCKS—
Tender Activity—Wires were later in the day reporting that China state-owned firms bought at least 180,000t of U.S. soybeans—Egypt seeks optional-origin wheat—Jordan seeks 120,000t optional-origin wheat—Taiwan seeks 65,000t optional-origin corn
U.S. corn planting seen 94% complete, soybeans 79% – Reuters News
01-Jun-2020 12:20:30 PM
All figures in percent:
|Category||Analyst average||Analyst range||USDA last week|
|Corn planted (percent)||94||91-95||88|
|Soybeans planted (percent)||79||75-83||65|
|Winter wheat harvested||5||2-10||NA|
|Winter wheat condition*||54||53-56||54|
|Spring wheat planted (percent)||91||88-93||81|
|Spring wheat condition*||66||60-75||NA|
Winter Wheat Heading was 77% versus 68% last week, 73% a year ago, and 81% average
Winter Wheat Harvested was 3% versus NA% last week, 1% a year ago, and 2% average
—Winter Wheat was rated 51% good to excellent versus 54% last week and 64% a year ago
—30% fair versus 30% last week and 27% a year ago
—19% poor to very poor versus 16% last week and 9% a year ago
HRS Wheat plantings were 91% complete versus 96% average
—Emergence 67% versus 80% average
—HRS Wheat was rated 80% good to excellent versus NA% last week and 74% a year ago
—18% fair versus NA% last week and 21% a year ago
—2% poor to very poor versus NA% last week and 5% a year ago
Corn plantings were 93% complete versus 89% average
—Corn emerged was 78% versus 73% average
—Corn rated 74% g/ex versus 70% a week ago; 22% fair; 4% p/vp
Oats planted were 96% done versus 97% average
—Emergence 86% versus 89% average
—71% of the crop was rated good to excellent versus 74% last week (58% y/a)
—25% fair (23% last week); 4% poor to very poor (8% a year ago)
Soybean plantings were 75% complete versus 68% average
—Soybeans emerged were 52% versus 44% average
—70% of the crop was rated good to excellent versus NA% last week (NA% y/a)
—26% fair (NA% last week); 4% poor to very poor (NA% a year ago)
The U.S. growing season began on a much better note than last year’s extremely delayed start, but 2020 has presented its own unique set of circumstances that the Crop Watch farmers are navigating, with replanting and slow early growth common themes thus far; the first week of June should feature well above-average temperatures for most of the Corn Belt, and the Crop Watch producers see this significantly helping their lagging crops.
USDA SAYS 5.5 MILLION TONS (183 MILLION BUSHELS) OF U.S. SOYBEANS CRUSHED IN APRIL
USDA SAYS 245.0 MILLION BUSHELS OF CORN USED FOR FUEL ALCOHOL IN APRIL, DOWN FROM 440.5 MILLION A YEAR AGO
USDA SAYS 1.014 MILLION TONS OF DDGS PRODUCED IN APRIL, DOWN FROM 1.858 MILLION A YEAR AGO
The USDA April soybean crush was pegged at 183 mil bu (estimate was 183 mil bu) versus 192 mil a month ago and 172 last year
—Soyoil stocks were 2.602 bil lbs (estimate was 2.532 bil) versus 2.328 bil last month and 2.258 bil a year ago
—Soymeal stocks were 342,000t versus 369,000t last month and 337,000t a year ago
The USDA said 245 mil bu of corn was used for fuel alcohol in April, up from 410,000 mil a month ago and 441 mil last year.
—DDGS production in April was 1.014 mt versus 1.647 mt last month and 1.858 mt a year ago
U.S. renewable fuel credits have gained by more than a third over the last month as refiners have bought the credits while the Trump administration decides the future of a program that exempts smaller refineries from blending laws, traders said; Renewable fuel (D6) credits for 2020 traded at 50 cents each on Monday, up from 37 cents since the start of May.
Trade estimates for USDA grain export inspections – Reuters News
U.S. weekly grain/soybean export inspections – USDA – Reuters News
WEEK ENDED: 05/28/2020 05/21/2020 05/21/2020 05/30/2019
Prelim. Revised Previous
– Wheat 499,353 464,857 457,777 593,137
– Oats 0 0 0 499
– Barley 0 0 0 637
– Corn 1,128,091 1,097,249 1,091,972 744,840
– Sorghum 125,119 188,078 188,078 64,035
– Soybeans 396,387 342,571 333,127 510,482
MARKETING YEAR-TO-DATE INSPECTIONS
Current Year Last Year
– Wheat 24,895,770 24,795,126
– Oats 3,343 3,491
– Barley 30,548 10,625
– Corn 28,484,807 39,327,338
– Sorghum 3,317,783 1,413,253
– Soybeans 35,407,043 34,234,984
Yesterday’s U.S. weekly export inspections had
—Wheat exports running unchanged versus a year ago (up 1% last week) with the USDA currently forecasting a 4% increase on the year
—Corn 28% behind a year ago (29% last week) with the USDA down 14% for the season
—Soybeans 3% ahead of a year ago (up 4% last week) with the USDA having a 4% decrease forecasted on the year
Mexico 2020 corn imports cut 2.5%; improved production outlooks and lower domestic demand from the animal feed sector are likely to see Mexico’s corn imports cut despite lower domestic production, with local agency Grupo Consultor de Mercados Agricolas (GCMA) reducing its import forecast by 2.5%; we are now expecting total corn imports to reach 17.85 million mt in 2020 but imports could be even lower depending on the demand for animal feeding; at the end of 2019, the consultancy firm forecast overall 2020 corn imports of 18.3 million mt, although the figure means the country is still expected to see a busy year, after importing 16.25 million mt in 2019.
China has told state-owned firms to halt purchases of soybeans and pork from the United States, after Washington said it would eliminate special treatment for Hong Kong to punish Beijing; large volume state purchases of U.S. corn and cotton have also been put on hold; China could expand the order to include additional U.S. farm goods if Washington took further action
Exports coming from the US fell 30% in April, the biggest one-month decline for US exports since 2002; while the main factor in this decline was a 71% decrease in auto shipments from the US, exports of grain and meat products to China also contributed to April’s decline, noting food exports overall dropped 5.3%; the slide would suggest that Chinese plans to boost commodities purchasing under the phase 1 trade deal between the two countries has yet to have a significant effect
Yum China says its working with Beyond Meat to bring its Beyond Burger to mainland China for the first time; the plant-based patties will roll out on a limited-time basis at select KFC, Pizza Hut and Taco Bell locations on June 3; Beyond Meat is now also selling a “plant-based minced beef” at Starbucks stores in China; plant-based producers are increasingly eyeing expansion through China
- BRAZIL MAY SOYBEAN EXPORTS REACH 15.5 MILLION TNS VERSUS 10 MILLION TNS IN SAME YEAR-AGO MONTH, GOVERNMENT TRADE DATA SHOW
- BRAZIL MAY BEEF EXPORTS REACH 155,000 TNS VERSUS 124,300 TNS IN SAME YEAR-AGO MONTH, GOVERNMENT TRADE DATA SHOW
- BRAZIL MAY POULTRY EXPORTS REACH 372,500 TNS VERSUS 357,000 TNS IN SAME YEAR-AGO MONTH, GOVERNMENT TRADE DATA SHOW
Russian export prices for the new wheat crop, which is due to be harvested this summer, were stable last week as the market assessed crop conditions and yield potential
—Russian wheat with 12.5% protein loaded from Black Sea ports and for delivery in July was at $202 a tonne free on board (FOB) at the end of last week, unchanged from a week earlier, SovEcon consultancy said; IKAR pegged new crop wheat for delivery in July at $200 a tonne, up $1
Ukraine is likely to start its 2020 winter grain harvest in 8-10 days before average terms thanks to warm winter; Ukrainian government has said unfavourable weather this year could cause a grain crop fall to 65-68 million tonnes from a record 75 million tonnes in 2019.
—Ukraine’s 2020/21 wheat harvest is likely to fall around 18% to 23.2 million tonnes and exports by more than a quarter to 14.9 million tonnes, on reliminary data from the economy ministry; Ukraine harvested 28.3 million tonnes of wheat in 2019, and exports could reach a record 20.5 million tonnes in 2019/20 season which ends on June 30.
India’s vegetable oil imports are likely to surge from June onwards as New Delhi eases coronavirus curbs; India could import 1.14 million tonnes of vegetable oils in June, up from an average of 865,000 tonnes during April-May; vegetable oil import needs could be 1.3 to 1.4 million tonnes per month during the July to September period.