By ADM Investor Services Research Team
Wheat prices overnight are up roughly 5 cents in the SRW Wheat, up 5 in HRW, and up 1 for HRS; Corn is up 1 cent; Soybeans up 3; Soymeal up $0.50, and; Soyoil up 5 points.
For the week, Winter Wheat prices are up roughly 26 cents for Soft Red Winter, up 15 in the Hard Red Winter, and up 13 for Hard Red Spring; Corn is up 13 cents; Soybeans up 41; Soymeal up $9.00, and; Soyoil up 55 points (crushing margins are down 15 cents at $0.87, oil-share is unchanged at 32%).
Chinese are on holiday.
The Malaysian Palm Oil market was up 4 ringgit at 2,193 (basis November) on support from soyoil.
The U.S. Midwest weather forecast had no major changes as it looks to be mainly dry and warm for the weekend and most of next week until a front moves in for the following weekend—temps will be running average to above average across the region the next 2 days before warming up to above average for all of next week.
The U.S. 11 to 16 Day Outlook had no major changes as the models are still in agreement with slightly below average temps and precip across the Midwest; and still gone (for now) are the ideas of a stronger weather flow that would have brought frost/freezes across northern sections of the Midwest.
Brazil will see little rain of significance through the next ten days to two weeks outside of Rio Grande do Sul and Santa Catarina.
Argentina sees a restricted rainfall pattern in place during the next ten days to two weeks and greater rain is needed in many areas to improve conditions.
Australia has restricted precipitation and drying occurring coming week; interior south-central into east-central Australia, the drought is not likely to change.
In deliveries, Soymeal totaled 48 lots; Soyoil 38; Rice 3; Corn 123; HRW Wheat 5; Oats ZERO; Soybeans 177, SRW Wheat 55, and; HRS Wheat 1.
The player sheet had funds net buyers of 4,000 contracts of SRW Wheat; net bought 19,000 Corn; bought 18,000 soybeans; net bought 5,000 lots of Soymeal, and; bought 5,000 lots of Soyoil.
We estimate Managed Money net short 3,000 contracts of SRW Wheat; net short 133,000 Corn; net short 62,000 contracts of Soybeans; net short 41,000 lots of Soymeal, and; net short 10,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 1,700 contracts; HRW Wheat up 1,300; Corn up 5,100; Soybeans up 7,200 contracts; Soymeal up 430 lots, and; Soyoil down 1,000.
There were changes in registrations (SRW Wheat down 22; Corn down 113; Rice up 2)—Registrations total 126 contracts for SRW Wheat; ZERO Oats; Corn 1,191; Soybeans 1,144; Soyoil 1,610 lots; Soymeal 810; Rice 1,147; HRW Wheat 56, and; HRS Wheat 759 contracts.
TODAY—–LAST TRADING DAY SEP FUTURES—COMMITMENT OF TRADERS—
USDA September crop supply/demand report
USDA 2019-20 U.S. corn and soybean production
USDA 2018-19 U.S. grain and soybean ending stocks
USDA 2019-20 U.S. grain and soybean ending stocks
USDA 2018-19 world grain and soybean ending stocks
USDA 2019-20 world grain and soybean ending stocks
USDA world production
News wires were reporting Chinese importers bought at least 10 boatloads of U.S. soybeans on Thursday, their most significant purchases since at least June ahead of high-level talks next month aimed at ending a bilateral trade war that has lasted more than a year; the soybean purchases, totaling at least 600,000 tons, are slated for shipment from U.S. Pacific Northwest export terminals from October to December.
—Reportedly, U.S. President Donald Trump said he would consider an interim trade deal with China – a step he said he has seen discussed by analysts – but said he would rather reach a larger agreement on the issues.
China will lift punitive tariffs imposed on U.S. soybeans and pork in a trade war with Washington, a state news agency said Friday, in a possible goodwill gesture ahead of negotiations; the Xinhua News Agency, citing unidentified official sources, said soybeans, pork and some other farm goods will be exempt from tariff hikes; it gave no indication whether or when purchases might resume.
FARMERS ENROLLED 86.820 MLN ACRES CORN (VS 86.692 MLN ACRES REPORTED AUG. 22) IN U.S. CROP SUBSIDY PROGRAMS INCLUDING FAILED ACRES FOR 2019 AS OF SEPT. 4 – USDA
—FARMERS ENROLLED 74.894 MLN ACRES SOYBEANS (VS 74.788 MLN REPORTED AUG. 22)
—FARMERS ENROLLED 46.609 MLN ACRES WHEAT (VS 46.525 MLN ACRES REPORTED AUG. 22)
U.S. FARMERS REPORT PREVENTED PLANTINGS OF 11.414 MLN ACRES CORN (VS 11.395 MLN ACRES REPORTED AUG. 22) FOR 2019 AS OF SEPT. 4 – USDA
—U.S. FARMERS REPORT PREVENTED PLANTINGS OF 4.460 MLN ACRES SOYBEANS (VS 4.452 MLN ACRES REPORTED AUG. 22)
—U.S. FARMERS REPORT PREVENTED PLANTINGS OF 2.215 MLN ACRES WHEAT (VS 2.215 MLN ACRES REPORTED AUG. 22)
The Trump administration’s $14.5B in direct payments to trade-challenged farmers is keeping many from losing money, according to a report from the Farm Credit Administration
—Iowa soybean farmers are projected to earn 29 cents a bushel in 2019 thanks to the USDA-directed payments, and otherwise would lose 91c
—Kansas wheat farmers would lose 41c if not for the payments, which lift their profits to 86c
—Iowa corn farmers will earn 41c a bushel instead of breaking even for 2019
For the week ended September 5th, U.S. All Wheat sales are running 23% ahead of a year ago, shipments up 28% with the USDA forecasting a 4% increase on the year
—By class, HRW wheat sales are up 55%, shipments 112% ahead with a USDA forecast of a 22% increase
—SRW sales 25% ahead, shipments 24% ahead with a 26% decline seen
—HRS sales 15% ahead, shipments 1% ahead with unchanged seen on the year
U.S. Corn sales are running 53% behind a year ago, shipments 43% behind with the USDA forecasting a 2% decline on the year
U.S. Soybean sales are running 42% behind a year ago, shipments 18% behind with the USDA forecasting a 4% increase on the year
—Soymeal sales 4% behind on the year, shipments 5% behind with a 3% decline forecasted
—Soyoil sales 15% behind a year ago, shipments 21% behind with a 16% decline forecasted
U.S. President Donald Trump said the administration has made progress on a biofuel reform package after he met with U.S. senators from key farm states on Thursday as part of an ongoing effort to boost ethanol demand and help hard-hit corn farmers
—The president is expected to meet with senators representing oil-producing states on Friday to continue discussions on the issue, sources said.
—The Thursday discussions follow a meeting the president had with two of the largest U.S. refining companies on Wednesday; Valero Energy and Marathon Petroleum asked Trump for solutions to help the refining industry cope with the cost of rising biofuel blending mandates, including potentially capping the price of blending credits refiners must acquire to comply; the corn industry has been dead-set against price caps for blending credits, called RINs, arguing they would undercut the economic incentive for blending biofuels.
—U.S. biofuel credits on Thursday rose 2.5 cents, or 15%, on refiners actively buying in the market amid news that the White House would meet with senators this week to discuss biofuel policy; Renewable fuel (D6) credits for 2019 traded at 18.5 cents each during the session, up from 16 cents apiece on Wednesday
U.S. biodiesel production fell to 142 million gallons in June from 155 million gallons a month earlier, the U.S. Energy Information Administration said; soybean oil remained the largest biodiesel feedstock, with 594 million lbs used in June, or about 54 percent of the total; in May, soyoil used in biodiesel production was 659 million lbs.
Oat production in Canada grew by 16.9% in 2019 compared to 2018, and barley production was up by 19.2%, based in part on satellite and agroclimatic data; the survey also said that all-wheat production increased by 0.9%, while canola production was expected to decline by 4.8%; Durum output was pegged at 5.0 million tons.
Despite rainfall and cool weather producers were able to make some harvest progress this week, according to Saskatchewan Agriculture’s weekly Crop Report; eighteen per cent of the crop is now in the bin, up from 11 per cent last week but well behind the five-year (2014-2018) average of 43 per cent for this time of year.
Chinese families are having to rethink menu options as pork prices soar despite government efforts to rebuild herds decimated by African swine fever and large-scale closures of pig farms for environmental reasons
China has solidified its position as the fastest-growing beef import market in the world in 2019, with Oceania and South America the dominant suppliers; last year, China’s imports topped 1 million metric tons (mt) for the first time at 1.07 million mt, up 50% from 2017, while value climbed 56% to $4.9 billion
—This remarkable rate of growth has further accelerated in 2019, as imports through July already reached 871,429 mt (up 57%), with value up nearly 60% to $4.1 billion
—For perspective, China’s full-year imports first topped $1 billion in 2013 and broke the $2 billion mark for the first time in 2015
Argentine farmers are expected to harvest 50 million tons of soy in the 2019/20 season from 17.65 million hectares, the Rosario Grains Exchange said
—The country’s 2019/20 corn harvest was estimated to reach 50 million tons, down from the exchange’s previous forecast of 51 million tons, as farmers slightly reduced their intended planting area
—The exchange also raised doubts as to whether the country would harvest the 21.5 million tons of wheat it had predicted previously, citing lack of rain and low yields.
Corn harvests, which are kicking off in some parts of the European Union, will contrast sharply from one side of the bloc to the other this year after a heatwave hurt crops in the West while sparing major producing countries in the Southeast; the 28-member bloc has been hit by scorching weather over the summer with France, the EU’s second-largest maize grower, seeing record-high temperatures that hurt maize plants in key development stages; the European Commission cut its estimate of the bloc’s maize production to 68.5 million tons last week, from 69.5 million estimated last month and now below the 69.0 million tons harvested in 2018.
Wire story reports rapeseed sowings in major EU producers could increase after this summer’s poor harvest although restrictions on insecticides are causing problems for farmers, experts said; drought in 2018 hindered sowing of rapeseed, the European Union’s main crop for vegetable oil and biodiesel production, cutting this summer’s EU rapeseed harvest to a 13-year low.
An estimated 60% of French grain maize crops were in good or excellent condition in the week to Sept. 9, down from 61% the previous week, farm office FranceAgriMer said; that was slightly above a 59% score at the same point last year.
India’s vegoil imports in August rose 5 percent to 1.6 million tons from a year ago, a trade body said; the country’s imports of palm oil in August stood at 852,534 tons, while soyoil imports were 440,704 tons.
Wilmar International will benefit from a likely recovery in demand for soybean in China and higher palm-oil prices, says RHB
—Soybean crush margins could improve in 2H as farmers increase pig-raising activities, incentivized by surging pork prices and government subsidies to encourage production
—Demand for soybean feed may get an extra boost from the poultry sector, as consumers substitute pork with chicken
—As one of the largest palm-plantation companies, Wilmar is also set to gain from the recovery in palm-oil prices from July lows
There is about a 75% chance that a weather pattern marked by average long-term ocean temperatures, tropical rainfall and atmospheric winds will prevail in the Northern Hemisphere this fall, a U.S. government weather forecaster said; the probability that the El Niño-Southern Oscillation-neutral (ENSO) weather pattern will then continue through the spring of 2020 is at 55% to 60%.