ADMIS AM Commentary

By ADM Investor Services Research Team


Wheat prices overnight are up roughly 4 cents in the SRW Wheat, up 4 in HRW, and up 5 for HRS; Corn is up 3 cents; Soybeans up 3; Soymeal up $1.00, and; Soyoil up 20 points.


Chinese Ag futures (September) settled up 1 yuan in Soybeans, down 16 in Corn, down 20 in Soymeal, up 8 in Soyoil, and up 10 in Palm Oil.


The Malaysian Palm Oil market was up 1 ringgit at 1,984 (basis October) at midsession.


There were reports that the Head of the USDA RMA said that total US prevent plant acres enrollment is near

15-20 million acres. Some feel this could include 6-8 million corn.


The U.S. Midwest weather forecast has things mainly dry across the majority of the region over the next 5 days; the 6 to 10 day has some light rains to fall across the northeast half to 2/3rds of the region on Monday with things drying back out Tuesday into Wednesday—temps will be average to below average over the next 5 to 8 days warming to a bit above average beyond that.


The Plains are seen mainly dry over the next 5 days with the 6 to 10 day forecast also seeing fairly limited rainfall—temps will be running average to below average over the next 5 days warming to average to above average by the weekend and first half of next week.


The U.S. Delta and Southeastern states says the two-week outlook has not changed much since late last week and both regions are still expected to see a seasonable pattern of isolated to scattered showers most days during the period.


The 11 to 16 Day Outlook for the Midwest is back to a northwest flow bringing below average rainfall and average temps to the region.


The player sheet had funds net sellers of 10,000 contracts of SRW Wheat; sold 27,000 Corn; sold 10,000 contracts of Soybeans; net sold 3,000 Soymeal, and; net sold 4,000 Soyoil.


We estimate Managed Money net long 3,000 contracts of SRW Wheat; net long 139,000 Corn; net short 48,000 contracts of Soybeans; net short 27,000 lots of Soymeal, and; net short 37,000 Soyoil.


Preliminary Open Interest saw SRW Wheat futures down roughly 285 contracts; HRW Wheat up 1,400; Corn down 4,700; Soybeans down 11,600 contracts; Soymeal down 1,000 lots, and; Soyoil up 585.


There were no changes in registrations–Registrations total ZERO contracts for SRW Wheat; ZERO Oats; Corn 1,251; Soybeans 10; Soyoil 3,400 lots; Soymeal 745; Rice 1,036; HRW Wheat 5, and; HRS Wheat 1,176 contracts.




In tender activity—Egypt seeks optional-origin wheat—Japan seeks 114,000t U.S. wheat—Taiwan bought 90,650t U.S. wheat—Asian flour millers have been actively buying U.S. and Canadian spring wheat since last week as competitive prices drive demand for the grain; millers from the region’s top importer Indonesia, and other countries such as Japan, the Philippines and Thailand, have signed contracts to import about 300,000 to 400,000 tons since last week


U.S. Winter Wheat harvested was 69% (trade estimate was 73%) versus 57% last week, 79% a year ago, 79% average.


Spring Wheat was rated 76% good to excellent (trade estimate was 76%) versus 76% last week, and 79% average; 20% fair (20% a week ago, 17% a year ago), and; 4% poor to very poor (4% last week, 4% a year ago).


U.S. Corn silking was 35% versus 17% a week ago, 78% last year, and 66% average.

—Corn was rated 57% good to excellent (trade estimate was 58%) versus 58% last week, and 72% a year ago; 30% fair (30% last week, 19% last year), 13% poor to very poor (12% last week, 9% last year).


U.S.Oats harvested was 12% versus NA% a week ago, 23% last year, and 22% average.

—Oats were rated 64% good to excellent versus 68% last week and 72% a year ago; 28% fair (25% last week, 21% a year ago), and; 8% poor to very poor (7% last week, 7% a year ago).


U.S. Soybeans blooming were 40% versus 22% a week ago, 76% a year ago, and 66% average.

—Soybeans setting pods was 7% versus NA% a week ago, 41% last year, and 28% average.

—Soybeans were rated 54% good to excellent (trade estimate was 54%) versus 54% a week ago, and 70% a year ago; 34% fair (34% last week, 22% a year ago), and; 12% poor to very poor (12% last week, 8% a year ago).



Crop Watch: Corn, soy health steady ahead of milder weather spell



Too much rain continues to be an issue for the North Dakota fields. The producer left corn yield potential unchanged at 2 but reduced the other three scores due to excessive moisture: corn condition to 2.5 from 3, soybean condition to 2 from 2.5, and soybean yield to 2 from 2.5. The corn field has lost a lot of essential nitrogen and the soybeans are having a tough time growing in such wet conditions. The better parts of the soybean field are starting to put on flowers, which signals the start of the reproductive stage. This is about three weeks behind normal schedule. August can be game-changing for soybeans, so the producer believes there may be time for improvement.



The Minnesota grower left all ratings the same this week: corn and soybean condition both 4.25, corn yield potential 3, and soybean yield at 3.5. The corn is pollinating now and the soybeans are heavily flowering with small pods forming on the lower part of the plants. A total of 1.9 inches (48 mm) of rain fell last week, and the producer notes that no more rain is needed for close to two weeks. The next week of weather looks ideal as of Sunday afternoon with normal temperatures and little to no rain.



The Nebraska grower reduced all four ratings by 0.5 this week, taking corn condition to 3.5, corn yield potential to 3, soybean condition to 3.5, and soybean yield to 3. Last week was extremely hot with five days above 95 degrees F (35 degrees C) and the corn began its 10- to 12-day pollination period last Monday. Rain is also needed as much of the area has not received more than 0.5 inch (13 mm) in 35 days. Beetles and other pests have also been a widespread problem in the area. The producer seeded cover crops of rye and oats this weekend on his acres that were prevented from planting, and those comprise 14% of his total operation.



Condition and yield scores were left unchanged for the Kansas fields: corn condition and yield at 3.5 and soybean condition and yield at 3. Corn will be pollinating this week, and soybeans have just started to flower. This week will be favorably cool to normal after five straight days last week with highs above 100 degrees F (38 degrees C). Subsoil moisture is still plentiful after several months of abundant rains, but there has not been a substantial rain in nearly three weeks now, and the forecast is dry. The Kansas crop ratings would go up if the fields caught some rain, but if it stays dry, soybeans would be more vulnerable than the corn at this point.



The Iowa producer left ratings unchanged from the previous week: corn condition 4.25, corn yield 3.75, soybean condition 4, and soybean yield 3.25. Corn made it through pollination despite last week’s heat, and pods are starting to form on the soybean plants. The bean plants are much shorter this year than last, though that does not necessarily correlate with yield. It will take a few weeks yet for the producer to feel confident on the bean yield. Rain would be helpful at this point though it is not yet critical.



The Illinois grower left all ratings unchanged this week: corn condition at 3.75, corn yield at 2, soybean condition at 3.5, and soybean yield at 3. The first-planted corn is pollinating and the rest of the field will pollinate periodically over the next two weeks because a large part was replanted. The fields got 1.5 inches (38 mm) of rain last week and the crops were not necessarily hurt by the hot temperatures. Soil moisture is good right now and crops in the area are looking better, but they are very far behind normal schedule, which remains the concern.



The Indiana grower left both yield scores unchanged at 3, but he raised both condition scores to 3 from 2 last week after some much-needed rain. The corn is pollinating now and the milder temperatures expected this week will be helpful. The soybean field, which was the last Crop Watch field planted on June 14, should begin flowering within 10 days. There is not much rain in the forecast for this week, but the crops should be okay without extreme heat.



The Ohio producer left corn condition, corn yield and soybean condition all unchanged at 4 but reduced soybean yield to 3.25 from 3.5. The soybeans are in full bloom but there are not many nodes on the plants, which reduces the possible number of pods and beans. They are also very behind and have developed slowly. Corn pollination is about halfway complete as of Sunday and will finish this week. The upcoming milder temperatures will be ideal though the drier trend is less favorable, especially if Sunday night’s rain chances are missed.


Yesterday’s U.S. weekly export inspections had

—Wheat exports running 28% ahead of a year ago (31% last week) with the USDA currently forecasting a 2% increase on the year

—Corn 12% behind a year ago (11% last week) with the USDA down 14% for the season

—Soybeans 24% behind a year ago (24% last week) with the USDA having a 20% decline forecasted on the year


Cal-Maine Foods says it anticipates volatile grain prices in its next fiscal year, thanks to the flooding that hit the Midwest this spring as well as “ongoing uncertainties and geopolitical issues surrounding trade agreements; Cal-Maine reported F4Q results, and said it saw its feed costs rise 5.3% this fiscal year–coinciding with a 52% drop in market price for eggs; the company reported a $19.8M loss it attributed to the wet weather, which resulted in higher ingredient prices at some of our larger feed mill operations.


USDA Cold Storage

—U.S. stocks of pork bellies in freezers totaled 56.463 million pounds, in June, 11.9% below the previous month, and 6.0% above June 2018, the U.S. Department Agriculture said (in thousand pounds)


Jun 30     May 31     Jun 30      May 31   warehouse

2019       2019       2018       2018   stocks/Jun

pork bellies           56,463     64,124     53,279

total pork            622,367    628,956    561,879                571,807

total beef            394,525    405,152    448,585                388,301

total red meat      1,061,156  1,077,835  1,064,096              1,004,337

total chicken         836,220    834,298    887,984

total turkey          538,765    494,439    561,858

total poultry       1,379,037  1,332,139  1,453,467              1,287,014



It might seem an unlikely time for U.S. farmers to look to China for more business but the devastating impact of African swine fever on the Chinese pork industry is trumping concerns about trade wars and tariffs; experts estimate the disease will wipe out about a third of China’s pork production this year, or 18 million tons; that’s twice the amount of pork exported worldwide every year and enough to feed U.S. consumers for almost two years; the U.S. trade war with China initially forced U.S. pork exporters to scour the world for new markets but as the swine fever crisis deepens they’re gearing up for new opportunities to supply the Chinese market later this year and next.


China doesn’t need U.S. soybeans at the moment as shipments from South America have been good and the African swine fever has hurt domestic demand, says INTL FCStone; it adds that while China might buy some new crop soybeans to generate headlines and get trade negotiations between the U.S. and China going again, there’s no reason for the purchase to be large or immediate enough to have a real impact on future prices.


China’s grain, pork imports in June 2019

Commodity June 2019(tonnes) % change y/y Year-to-date (tonnes) % change y/y
Corn 720,000 39.1 3.1 mln 40.9
Wheat 310,000 1 1.76 mln -9.6
Barley 230,000 -60.7 3.08 mln -29.9
Sorghum 0 -99.3 10,000 -99.6
Pork 160,467 62.8 818,703 26.3



China’s pork imports in June surged from the previous year, customs data showed on Tuesday, as the world’s top consumer of the meat stocked up on supplies after African swine fever has decimated domestic pig herds.

—China brought in 160,467 tons of pork in June, up 62.8% from the same month last year; this was down 14% from 187,459 tons imported in May

—China’s pork imports for the first six months of the year came in at 818,703 tons, up 26.3% from a year earlier

—China’s wholesale pork prices rose rapidly in the first-half of March; China’s average wholesale pork prices rose 36.4% from a year earlier to 23.76 yuan ($3.45) per kg as of July 19

—Retail pork prices have also increased in recent weeks but at a slower pace than whole sale prices, with prices up 34.6% from a year earlier at 27.29 yuan per kg as of July 10

—Meanwhile, China’s first-half pork output fell less-than-expected, declining 5.5% to 24.7 million tons of pork


Brazil’s second-corn harvesting has reached 67% of the planted area in Center-South fields, up from 36% a year ago, when bad weather damaged the crop, agribusiness consultancy AgRural said; Mato Grosso state leads harvesting of Brazil’s second corn as farmers there have collected an estimated 89% of their fields so far in the season.


Russia has harvested 35.2 million tons of grain with an average yield of 3.69 tons per hectare, data from the Agriculture Ministry showed; it had harvested 31.4 million tons with an average yield of 3.71 tons on the same date a year earlier


—Russia’s July exports of wheat, barley and maize (corn) are estimated at 3.7 million tonnes, up from 1.4 million tonnes in June, the SovEcon agriculture consultancy said.


—Russian wheat export prices were broadly flat last week in quiet trade as importers held out for lower prices after a strong harvest; Black Sea prices for wheat with 12.5% protein content edged down slightly to $193.5 a ton free on board (FOB) at the end of last week, from $194 a week earlier; SovEcon, another Moscow-based consultancy, quoted FOB wheat rising by $2.5 to $195 a ton.


Ukraine, which expects its 2019 grain crop to remain steady at last year’s level of around 70 million tons, has harvested 23.5 million tons of early grains as of July 22, the agriculture ministry said; farmers have threshed 6.6 million hectares of grains or 68% of the early grains sown area; the harvested volume includes 16.9 million tons of wheat


European Union soft wheat exports over July 1-21 – the first three weeks of the 2019/20 season – came to 585,000 tons, down 10% on a year earlier, European Commission data showed

—EU 2019/20 barley exports stood at 170,000 tons by July 21 down 8% on year

—maize imports rose 81% to 1.2 million tons


European Union soybean imports over July 1-21 – the first three weeks of the 2019/20 season – came to 897,000 tons, up 81% compared with the same period last year, European Commission data showed

—EU 2019/20 soymeal imports had reached 1.2 million tons by July 21, up 49% on the same time a year earlier

—EU palm oil imports stood at 171,000 tons, down 45% on the previous year


The European Union’s crop monitoring service, MARS, on Monday cut its forecast of the EU soft wheat yield this year to 6.04 tonnes per hectare (t/ha) from 6.10 t/ha last month; that would still be 7.3% above last year’s level and 1.6% higher than the average of the past five years

—MARS raised projected EU grain maize yield to 8.08 t/ha from 8.05 t/ha in June while the EU rapeseed yield was slightly lowered to 3.10 t/ha from 3.14 t/ha last month


Indonesia’s palm output in June is forecast to fall from a month earlier, while exports will be flat, a Reuters survey of industry groups and researcher showed.

—Output of palm oil from Indonesia likely edged lower to 4.54 million tons in June from 4.6 million tons in May

—exports of palm oil were estimated at 2.80 million tons in June, the same as in May

—domestic consumption was seen rising to 1.6 million tons last month from 1.5 million tons in May

—at the end of June, domestic stockpiles of palm oil are estimated at 2.95 million tons, the highest level this year

—Data from Indonesia’s largest palm oil association GAPKI showed palm oil stockpiles at the end of May were at 3.53 million tons


Malaysia’s palm oil exports during the July 1-20 period are estimated up 3.2% on month at 926,257 metric tons, cargo surveyor SGS (Malaysia) Bhd. said