ADMIS AM Commentary 082119

By ADM Investor Services Research Team


Wheat prices overnight are down roughly 3 cents in the SRW Wheat, down 3 in HRW, and down 1 for HRS; Corn is up 1 cent; Soybeans up 4; Soymeal up $1.50, and; Soyoil up 15 points.


Chinese Ag futures (January) settled up 2 yuan in Soybeans, up 14 in Corn, up 14 in Soymeal, up 26 in Soyoil, and up 22 in Palm Oil.


Chicago corn futures edged up on Wednesday to recover from their lowest in more than three months, buoyed after a U.S. crop tour forecast lower yields. Soybean prices gained for a second session, while wheat inched up after two days of losses. “The market is looking at the crop tour and there is some support,” said Darin Friedrichs, Shanghai-based Senior Asia commodity analyst. “Last night prices were under pressure, the weather forecast looks fine as of now but there will be concerns over yields if it gets too cold in September as the crop was planted late.” A closely watched crop tour in the U.S. Midwest is forecasting lower corn yields than last year. The wheat market is facing headwinds from abundant global supplies. Ukraine’s 2019 wheat harvest is expected to rise to 27.72 million tonnes from 24.83 million tonnes last year, according to data from grain trader union UZA. Wheat exports could reach 21 million tonnes in the 2019/20 season, which started on July 1, compared with 15.53 million tonnes in 2018/19, the forecast data showed on Tuesday.


The U.S. Midwest weather forecast has close to average rainfall over the majority of the Midwest the next 10 days—temps look to be running average to below average with some upshots of above.


The 11 to 16 Day Outlook calls for differences again—the European below average temps and below average temps—the GFS above average temps and average to above precip.


The player sheet had funds net sellers of 6,000 contracts of SRW Wheat; sold 18,000 Corn; net bought 1,000 soybeans; bought 2,000 Soymeal, and; net sold 3,000 lots of Soyoil.


We estimate Managed Money net short 5,000 contracts of SRW Wheat; net long 8,000 Corn; net short 79,000 contracts of Soybeans; net short 43,000 lots of Soymeal, and; net long 1,000 Soyoil.


Preliminary Open Interest saw SRW Wheat futures down roughly 1,200 contracts; HRW Wheat up 2,600; Corn down 6,500; Soybeans up 3,100 contracts; Soymeal up 1,700 lots, and; Soyoil up 950.





In tender activity—-Tunisia seeks 92,000t optional-origin wheat—


The Pro Farmer Midwest Crop Tour estimated Nebraska corn yields at 172.55 bushels per acre (bpa), down from 179.17 bpa in 2018 but up from the tour’s three-year average of 167.73 bpa for the country’s No. 3 corn state


—the four-day crop tour, which does not project soybean yields, estimated the average amount of soybean pods per 3-by-3 foot area at 1,210.83 pods, down from the tour’s estimate of 1,299.08 pods last year and down from the three-year average of 1,217.72 pods.


Indiana soybean-pod figures are down nearly 30% compared with this time last year, according to Pro Farmer; noting that Indiana is now the second state to show a steep decline in soybean pods this week; says soybean acres are roughly 30-45 days behind normal


Corn yields averaged 161.46 bushels per acre among 188 samples, according to Pro Farmer; that’s marginally better than the roughly 154 bushels per acre reported in Ohio on Monday; Nebraska yields averaged 172.55 bushels per acre, Pro Farmer says.


USDA National Agricultural Statistics Service (NASS) Crops Division Chief Lance Honig sought to clear the clouds around 2019 crop estimates. One of the biggest questions on farmer and trader minds: how do prevent plant acres factor into yield and total production?

“Prevent plant acres are not included in NASS numbers, because they weren’t planted and therefore they’re not included,” Honig said. “So, if they’re not in acres, they’re not in yield because they’re not in production.”

While it doesn’t impact the yield number, it will impact the total production number because of the way USDA calculates it. USDA calculates total acres harvested for grain and apply a yield to those acres to derive that final production number, he explained.

In terms of total acres, Honig and his team is confident in the 90 million estimate USDA released in August.

“In addition to all the survey work and satellite data we have, we’re actually at a point now where you can look at those FSA certified acres as well,” Honig said



President Donald Trump’s administration has been scrambling to stem the tide of rising anger in Farm Belt states after its decision this month to allow numerous oil refiners to mix less ethanol into their gasoline


There Is Turmoil in Agriculture– Here’s What Investors Need to Know–

—Economic growth is slowing, worrying some investors that a recession is looming. Slower growth, however, is nothing compared with what farmers have had to endure recently; the agriculture sector has been whipsawed by government agencies, trade policy, disease, weather and currencies; it is hard to be a farmer; that volatility isn’t great for investors, either, because it makes it more difficult to value stocks tied to agriculture; it doesn’t look as if it is going to get any easier in coming months, meaning investors will have to keep watching to make sure the weather — and other factors tied to agriculture — don’t ding their portfolios


Russia has detected new cases of African swine fever (AFS) in the Amur region near its border with China, local authorities said on Wednesday. ASF-infected pigs were found at two private farms in the village of Volkovo near Blagoveshchensk, the local administration said on its website. The ASF virus is a highly contagious fever among pigs, but it is not dangerous to humans. Earlier this month an ASF outbreak was detected at a small farm in Russia’s Primorsk region near the border with China, which has reported more than 140 cases of the incurable disease since it was first found in the country last August.