ADMIS AM Commentary 080719

By ADM Investor Services Research Team


Wheat prices overnight are down roughly 1 cent in the SRW Wheat, down 1 in HRW, and down 1 for HRS; Corn is up 1 cent; Soybeans up 1; Soymeal down $0.50, and; Soyoil up 15 points.


Chinese Ag futures (January) settled up 12 in Soybeans, down 2 in Corn, down 12 yuan in Soymeal, unchanged in Soyoil, and down 6 in Palm Oil.


The Malaysian Palm Oil market was unchanged at 2,102 (basis October) after hitting 10 week highs on Indonesian weather concerns.


The U.S. Midwest weather forecast remains with differences in the model but still suggesting less than average precip and average to below average temps (the below average precip gets accentuated in eastern Iowa and northwest/central Illinois).


The U.S. Delta and Southeastern states hasn’t changed much with timely showers and thunderstorms during the next ten days; showers and thunderstorms will be less numerous as we go along and net drying will be common across the Delta and the Southeast.


The 11 to 16 Day Outlook for the Midwest now changed to ridging across the eastern half to two-thirds of the U.S. bringing well above average temps with precip to run below average.


In deliveries, Soymeal totaled 484 lots; Soyoil 103; and; Soybeans 1,066 contracts.


The player sheet had funds net sellers of 5,000 contracts of SRW Wheat; sold 7,000 Corn; net sold 3,000 soybeans; bought 1,000 Soymeal, and; net sold 3,000 lots of Soyoil.


We estimate Managed Money net long 5,000 contracts of SRW Wheat; net long 85,000 Corn; net short 78,000 contracts of Soybeans; net short 39,000 lots of Soymeal, and; net short 36,000 Soyoil.


Preliminary Open Interest saw SRW Wheat futures down roughly 3,000 contracts; HRW Wheat down 1,200; Corn down 255; Soybeans up 1,500 contracts; Soymeal down 2,600 lots, and; Soyoil up 8,900.


There were changes in registrations (Soyoil down 10)—Registrations total ZERO contracts for SRW Wheat; ZERO Oats; Corn 1,251; Soybeans 1,232; Soyoil 2,938 lots; Soymeal 820; Rice 1,036; HRW Wheat 5, and; HRS Wheat 1,176 contracts.




In tender activity—–Japan seek 114,000t optional-origin wheat—Egypt bought 415,000t Russian, Romanian, Ukraine wheat ranging from roughly $198 to $204 a ton—-Algeria bought 40,000t South American corn


The Purdue University/CME Group Ag Economy Barometer reading jumped to 153 in July, up 27 points from June, and up 52 points from May; improving crop conditions after an extraordinarily wet planting season, combined with a late spring/early summer crop price rally, boosted farmer sentiment; this improvement occurred despite the fact that many producers were in the midst of filing prevented planting crop insurance claims and wondering about the size of the USDA’s 2019 Market Facilitation Payments (MFP)


—Twenty-five percent of corn/soybean growers in the survey said they are filing a prevented planting claim on some of their intended corn acreage while 24 percent said they are filing a prevented planting claim on some of their soybean acreage


—In a follow-up question, producers who indicated they submitted a claim were asked what percentage of their intended acreage they will claim as prevented planting; sixty-one percent of the farmers filing a prevented corn planting claim said their prevented planting totaled 15 percent or more of their intended corn acreage and 42 percent said that they did not plant 25 percent or more of their intended acreage


—Meanwhile, 39 percent of soybean growers submitting a prevented planting claim said they did not plant between 15 and 25 percent of their intended soybean acreage


—In contrast to corn growers, however, just 2 percent of soybean farmers with a prevented planting claim said they were not able to plant 25 percent or more of their intended soybean acreage


U.S. President Donald Trump on Tuesday vowed to protect American farmers against China by signaling to provide further aid if needed, a day after Chinese firms stopped agricultural purchases and Beijing threatened more tariffs on U.S. farm products; our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do – And I’ll do it again next year if necessary!



POLL-Trade estimates for USDA August U.S. wheat production – Reuters News


All Wheat Winter Wheat Hard red Wheat Soft red Wheat White Wheat Other Spring Durum
Average trade estimate 1.925 1.294 0.809 0.257 0.228 0.569 0.057
Highest trade estimate 1.990 1.324 0.834 0.259 0.257 0.583 0.060
Lowest trade estimate 1.873 1.270 0.799 0.250 0.220 0.542 0.053
USDA July 1.921 1.290 0.804 0.259 0.227 0.572 0.058



POLL-Trade estimates for USDA August U.S. corn, soy production – Reuters News


2019/20 2019/20
Corn Soy
Planted acres Harvested acres Yield Production Planted acres Harvested acres Yield Production
Average trade estimate 87.998 80.050 164.9 13.193 81.006 79.890 47.6 3.800
Highest trade estimate 89.800 81.900 167.2 13.550 83.500 82.800 49.0 3.974
Lowest trade estimate 83.494 76.114 161.0 12.723 78.000 77.300 46.0 3.633
USDA July 91.700 83.600 166.0 13.875 80.000 79.300 48.5 3.845



POLL-Trade estimates for USDA August U.S. grain end-stocks – Reuters News


2018/19 2019/20
Corn Soy Wheat Corn Soy
Average trade estimate 2.392 1.065 0.999 1.620 0.821
Highest trade estimate 2.490 1.124 1.072 1.900 0.950
Lowest trade estimate 2.220 0.988 0.918 1.281 0.607
USDA July 2.340 1.050 1.000 2.010 0.795



POLL-Trade estimates for USDA August world crop end-stocks – Reuters News


2018/19 2019/20
Wheat Corn Soy Wheat Corn Soy
Average trade estimate 275.02 329.84 113.27 284.08 290.09 104.77
Highest trade estimate 276.00 332.00 116.10 290.00 298.70 108.50
Lowest trade estimate 273.00 328.00 111.00 273.00 278.00 101.00
USDA July 275.15 328.75 112.98 286.46 298.92 104.53



U.S. Weekly Deliverable Stocks of

—SRW Wheat totaled 45.6 mil bu versus 43.8 mil last week and 71.7 mil a year ago


—HRW 98.8 mil (97.5 last week, 122.7 mil a year ago)


—HRS 16.9 mil bu (16.0 mil a week ago, 14.4 mil last year)


—Corn totaled 4.2 mil bu (4.5 mil last week, 4.1 mil a year ago)


—Soybeans totaled 15.9 mil bu (15.8 mil last week, 12.1 mil a year ago)


U.S. fertilizer company Mosaic Co cut its full-year earnings forecast and posted a lower-than-expected profit, as rains and flooding in the United States hit its volumes and phosphates margins, sending its shares down as much as 12.3%; severe flooding in the U.S. farm belt across Iowa, Nebraska, South Dakota and several other states delayed spring farming and has hit agricultural companies like Mosaic, which sell fertilizers directly to farmers.


—Nearly nonstop rains that kept many US farmers from planting a timely crop this year has farmers ready to swing millions more acres to corn, according to executives of fertilizer maker Mosaic; farmers are thinking about 95M acres, which would be up by more than 3M from the USDA’s current corn estimate for 2018


A disease new to Richland County, North Dakota, could have negative impacts on local soybean production; agronomists and agriculture agents advise farmers to watch for warning signs of sudden death syndrome; common in southern Minnesota and South Dakota, the disease has symptoms and pathogens which correspond with plant samples taken from Richland County in 2018.


China plans to remove soybean oil, rapeseed oil and palm oil from its import tariff quota management, its commerce ministry said; which means they will not be subject to restrictions which may be exacted on other products such as wheat, corn and rice.


Brazil’s new soybean crop, which farmers are expected to start planting next month, is seen reaching 36.7 million hectares (90.68 million acres), an area 2.3% larger than seen in the previous crop, according to the average forecast; output of the new crop was seen on average at 122.8 million tons, 6.8% more than in the previous season; analysts said expansion of soy planting will probably be limited by China’s swine flu outbreak, lower global soy prices and the potential for higher transportation costs in Brazil.


Brazil’s agriculture minister has postponed a trip to China originally set for August to September, a ministry spokesman said, as industry groups said pending approvals to export meat to China were taking longer than expected; the spokesman said the Minister now intends to go in September but gave no reason for postponing the trip; China is currently considering export permits for 30 Brazilian meatpacking plants, including 19 beef processors, 9 chicken factories, one pork producer and one donkey plant.


The Brazilian government has approved an increase to 11% from 10% in the amount of biodiesel to be blended into all diesel sold in the country, oil and fuels regulator ANP said


Indonesia exported 2.17 million tons of palm and palm kernel oils in the month of June, the Indonesia Palm Oil Association (GAPKI) said; exports dropped by 5.24% on the year in June after increasing by 12% in May

—Palm oil inventories reached 3.55 million tons at end-June, a rise from 3.53 million tons a month earlier

—domestic biodiesel consumption in January-June 2019 reached 3.29 million tons or surged by 144% compared with the corresponding period in 2018