ADMIS AM Commentary 080819

By ADM Investor Services Research Team



Wheat prices overnight are up roughly 4 cents in the SRW Wheat, up 2 in HRW, and up 1 for HRS; Corn is up 2 cents; Soybeans up 4; Soymeal up $1.00, and; Soyoil up 25 points.


Chinese Ag futures (January) settled up 12 in Soybeans, down 25 in Corn, down 1 yuan in Soymeal, up 62 in Soyoil, and up 30 in Palm Oil.


The Malaysian Palm Oil market was up 31 at 2,135 (basis October) on China’s tariff quota plan.


The U.S. Midwest weather forecast had no major changes over the next 10 days with less than average precip—especially in the east and, below average temps.


The 11 to 16 Day Outlook for the Midwest changed again back to a west to east flow indicating temps running average to a bit below with precip also average to a bit below.


In deliveries, Soymeal totaled 402 lots; Soyoil ZERO; and; Soybeans 1,103 contracts.


The player sheet had funds net buyers of 1,000 contracts of SRW Wheat; bought 6,000 Corn; were net even in soybeans; sold 2,000 Soymeal, and; net bought 3,000 lots of Soyoil.


We estimate Managed Money net long 6,000 contracts of SRW Wheat; net long 91,000 Corn; net short 78,000 contracts of Soybeans; net short 41,000 lots of Soymeal, and; net short 33,000 Soyoil.


Preliminary Open Interest saw SRW Wheat futures down roughly 9,800 contracts; HRW Wheat down 10,000; Corn down 7,900; Soybeans down 2,000 contracts; Soymeal down 1,500 lots, and; Soyoil up 4,600.


There were changes in registrations (Soybeans down 5, Soyoil down 47)—Registrations total ZERO contracts for SRW Wheat; ZERO Oats; Corn 1,251; Soybeans 1,227; Soyoil 2,891 lots; Soymeal 820; Rice 1,036; HRW Wheat 5, and; HRS Wheat 1,176 contracts.





In tender activity—–Japan bought 114,000t U.S./Canadian/Australian wheat—Saudi Arabia and the United Arab Emirates said they had provided a combined 540,000 tons of wheat to Sudan to support the country’s people


Trade estimates for USDA weekly grain, soy export sales

Trade estimates for 2018-19 Trade estimates for 2019-20
Wheat N/A 250,000-500,000
Corn 100,000-300,000 200,000-600,000
Soybeans 0-300,000 100,000-400,000
Soymeal 50,000-200,000 25,000-125,000
Soyoil 5,000-20,000 0-10,000



The contiguous US has again set the record for the wettest 12 months on record, with the 12 months between August 2018 and July 2019 setting a new record of average precipitation at 37.73 inches, says the NOAA; it is the fourth month in a row that a new record has been set for wettest 12 months; however, the NOAA says, average precipitation in July was 2.69 inches, which is .09 inches less than the seasonal average.


Trade groups representing grain-trading giants like Cargill, Archer Daniels Midland, Bunge and Louis Dreyfus push back on the Trump administration’s proposal to loosen regulations for approving new genetically engineered crops. Farm commodity traders support biotech crops in general, but warn that speeding new varieties to market–before major crop-importing countries grant their own approvals–could lead those countries to block imports of US crops, snarling global trade flows.


U.S. ethanol production for the week ended August 2nd averaged 1.04 mil barrels per day (up 0.87% versus a week ago, down 5.45% versus a year ago); stocks totaled 23.117 mil barrels (down 5.52% versus a week ago, up 0.85% versus last year); corn use for the week was 107.3 mil bu (106.3 mil last week and versus the 77.8 mil bu needed to meet USDA projections).





China July soy imports hit nearly 1-year high on better crush margins

  • Soybean crush margins jumped in May, pushing up purchases
  • July imports lower than expected due to slow offloading at ports
  • Jan-July imports drop as pig disease, trade war curb demand

China’s soybean imports in July rose 8% from a year earlier, to their highest level in almost a year, customs data showed as importers increased their purchases of Brazilian beans on higher crush margins; China took in 8.64 million tons of soybeans in July, up from 8 million in the same month last year

—That is up 33% from 6.51 million tons in June and the highest since August 2018.

—The July imports were below market expectations as some cargo unloadings were delayed

—The main reasons for high imports were that, earlier, crush margins of South American beans were higher, and we were in peak supply season in the production regions

—the figures were still a bit lower than expected, as offloading at the ports was delayed as crushers were operating at lower rates due to poor demand for meals



Selected highlights from a report issued by a U.S. Department of Agriculture attache in Kazakhstan

—Kazakhstani grain production is expected to be flat this year as Kazakhstan continues its crop diversification strategy and gradually reduces wheat area; wheat planting area is expected to reach a historical low of 11.2 million hectares; wheat production is forecast at 14.0 MMT in MY2019/20


Selected highlights from a report issued by a U.S. Department of Agriculture attache in Argentina:

—For marketing year (MY) 2019/20, Post wheat production is forecast higher than USDA at a record 20.8 million tons on larger planted area than USDA lifting exports to a record 14.3 million tons

—Post’s corn production estimate nearly matches USDA’s

—Post’s sorghum production is forecast just below USDA at 2.3 million tons on lower average yields but growing trade with China lifts exports 300,000 tons above USDA to 400,000 tons


Selected highlights from a report issued by a U.S. Department of Agriculture attache in Slovakia

—Slovak officials confirmed the country’s first outbreak of African Swine Fever


India’s monsoon rains in the week through Wednesday were above average for the second straight week, the weather office said, easing concerns of drought