ADMIS AM COmmentary 11/01/19

Strategies on video:

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 down 1 cent; Soybeans up 1; Soymeal up $1.00, and; Soyoil up 5 points.


For the week, Winter Wheat prices are down roughly 9 cents for Soft Red Winter, down 4 in the Hard Red Winter, and down 12 for Hard Red Spring; Corn is unchanged; Soybeans unchanged; Soymeal up $2.00, and; Soyoil up 15 points (crushing margins were up 2 cents at $0.89, oil-share was unchanged at 33%).


Chinese Ag futures (January) settled down 4 yuan in Soybeans, down 4 in Corn, down 28 in Soymeal, up 26 in Soyoil, and down 6 in Palm Oil.


The Malaysian Palm Oil market was down 23 ringgit at 2,462 (basis January) on reportedly position-evening.


New month. This could be the latest that we still do not know with confidence the size of the US 2019 corn and soybean crop. Will there be a partial US and China trade deal or not? What will South America crops be in 2020? What will demand for US crops in 2020? Who will be in the White House in 2020? Will there be a global recession in 2020? 2021? Will US Feds continue to drop rates? How many corn and soybean acres will US farmers plant in 2020.


The U.S. 11 to 16 Day Outlook for the Plains and Midwest continues with a below average precip and temp pattern for the first half of the period turning to some warming temps and light to moderate rainfall for the regions the second half.


The South American weather forecast for the 6 to 10 day period continues with rainfall in 75% of the Argentine growing regions and rains in most of Brazil. Temps will be below average in Argentina and average to above in Brazil over the next 10 days.


In deliveries, Soybeans totaled 1,426 contracts. All were stopped by JP Morgan customer. Cargill?


The player sheet had funds net sellers of 1,000 contracts of SRW Wheat; net sold 1,000 Corn; bought 5,000 Soybeans; bought 4,000 lots of Soymeal, and; net sold 4,000 Soyoil.


We estimate Managed Money net long 6,000 contracts of SRW Wheat; net short 71,000 Corn; net long 61,000 contracts of Soybeans; net short 23,000 lots of Soymeal, and; net long 64,000 Soyoil.


Preliminary Open Interest saw SRW Wheat futures down roughly 2,000 contracts; HRW Wheat up 1,300; Corn down 6,000; Soybeans down 3,800 contracts; Soymeal up 6,100 lots, and; Soyoil up 7,300.


There were changes in registrations (Corn down 180)—Registrations total ZERO contracts for SRW Wheat; ZERO Oats; Corn 319; Soybeans 1,769; Soyoil 1,516 lots; Soymeal 764; Rice 1,196; HRW Wheat 11, and; HRS Wheat 669 contracts.





In tender activity—Philippines seek 35,000t optional-origin feed wheat—


For the week ended October 24th, U.S. All Wheat sales are running 11% ahead of a year ago, shipments up 26% with the USDA forecasting a 2% increase on the year


U.S. Corn sales are running 48% behind a year ago, shipments 61% behind with the USDA forecasting an 8% decline.


U.S. Soybean sales are running 10% behind a year ago, shipments 8% ahead with the USDA forecasting a 2% increase on the year


The U.S. Department of Agriculture (USDA) is expected to report that 4.854 million short tons, or 161.8 million bushels, of soybeans were crushed at U.S. processing plants in September


—Estimates ranged from 161.3 million bushels to 162.5 million bushels

—it would be down from the 177.5 million bushels crushed in August and the 169.6 million bushels crushed in September 2018


—U.S. soyoil stocks at the end of September were seen falling to 1.792 billion lbs

—that would be down from 1.806 billion lbs at the end of August.

—Soyoil stocks estimates ranged from 1.721 billion to 1.850 billion lbs


It is no surprise that U.S. farmers had trouble with their corn and soybean crops this year – from the slowest planting on record to one of the latest-ever harvests – as above-average precipitation has been a staple in the Midwest for an unheard-of period of time; October likely marked the 15th straight month in which precipitation was greater than the long-term average in the Midwest




Saskatchewan crop report

—Despite unfavorable weather, producers were able to make good harvest progress last week; Ninety per cent of the crop is now in the bin, up from 83 per cent last week but remains behind the five-year (2014-2018) average of 96 per cent for this time of year


U.S. ships most soybeans to China since August in late October

—China purchased 481,000 tons of U.S. soybeans in the week ended Oct. 24 and shipped more than half a million tons, the most since August, the U.S. Department of Agriculture reported on Thursday

—China also bought 1,900 tons of U.S. pork for 2019 delivery in the week ended Oct. 24 but canceled purchases of 4,200 tons of pork for 2020 delivery


Around a quarter of the world’s pigs are expected to die from African swine fever as authorities grapple with a complex disease spreading rapidly in the globalization era, the World Organization for Animal Health’s president said

—A sharp reduction in the world’s pig population would lead to possible food shortages and high pork prices, and it might also cause shortfalls in the many products made from pigs, such as the blood-thinner heparin that’s used in people


Argentina’s 2019/20 wheat harvest is expected at 18.8 million tons, the Buenos Aires Grains Exchange said in its weekly crop report, citing bad weather as its reason for cutting its previous 19.8 million ton forecast


Ukraine has increased its grain exports by 38.6% to 17.94 million tons so far in the 2019/20 July-June season thanks to higher wheat shipments, Ukraine’s agriculture ministry said

—The volume included 10.92 million tons of wheat compared to 7.40 million in the same period a season earlier

—Ukraine also exported 3.20 million tons of barley and 3.59 million tons of corn


French farmers had harvested 65% of this year’s grain maize crop as of Oct. 28, up from 46% a week earlier, farm office FranceAgriMer said

—The harvest progress remained well below last year’s, when 96% of the crop had been harvested by that time

—Sowing of soft wheat for next year’s harvest was 54% complete as of Oct. 28, up from 29% the previous week and compared with 70% a year earlier


Indonesia’s state food procurement agency Bulog is likely to not utilize its permit to import 30,000 tons of beef from Brazil this year, due to adequate domestic supply from imports from other countries, its chief executive officer said


Indonesia palm oil price is seen averaging at $600 per ton in the first half of next year, an increase from an earlier estimate of $580 per ton, leading industry analyst Thomas Mielke said


—European crude palm oil prices are set to climb to more than $700 per tonne in first-quarter 2020, as lower-than-expected output and use of supplies in biodiesel squeeze stocks, James Fry, chairman of consultancy LMC International, said


—Benchmark palm oil prices are seen rising to 2,700 ringgit a ton by March 2020, according to forecasts by industry analyst Dorab Mistry, higher than a previous forecast of 2,500 ringgit due to slower production