ADMIS AM Comments 071219

By ADM Investor Services Research Team


Wheat prices overnight are down roughly 4 cents in the SRW Wheat, down 3 in HRW, and down 3 for HRS; Corn is down 2 cents; Soybeans down 2; Soymeal down $1.00, and; Soyoil down 20 points.


For the week, Winter Wheat prices are up roughly 3 cents for Soft Red Winter, up 12 in the Hard Red Winter, and up 3 for Hard Red Spring; Corn is up 4 cents; Soybeans up 22; Soymeal up $6.00, and; Soyoil up 45 points (crushing margins are down 4 cents at $0.96, oil-share is unchanged at 30%).


Chinese Ag futures (September) settled down 1 yuan in Soybeans, unchanged in Corn, up 7 in Soymeal, down 30 in Soyoil, and down 18 in Palm Oil.


The Malaysian Palm Oil market was up 3 ringgit at 1,944 (basis September) in consolidation trade.


The U.S. Midwest weather forecast had no major changes as some remnants of the ongoing tropical storm in the Gulf by the middle of next week and some hit and miss activity across the far northern Midwest, rainfall still looks to be limited over the next 10 days—-temps will be near average over the next 3 days but move to above average later in the weekend and all of next week with temps moving solidly into the 90’s.


The Southern U.S. Plains has no major changes as it will see limited rainfall over the next 10 days with just some hit and miss activity and any remnants of the tropical storm passing to the east—temps will be running average to a bit below average over the next 4 days and then well above average next week.


The Northern U.S. Plains has no major change as average to a bit below average rainfall is expected over the next 10 days—temps will be running near average over the next 5 days warming to above average after that.


The U.S. Delta and Southeastern states, outside of the tropical disturbance and its impact, the region will continue to see a seasonable pattern of isolated to scattered showers each day during the next two weeks.


The 11 to 16 Day Outlook has some differences in it now—the GFS model still has ridging in the west bringing limited rains and above average temps for the majority of the Plains and Midwest; more average temps are seen in the eastern Midwest—the European model is now showing ridging to be centered over the Plains and Midwest bringing hot and dry weather to all of the Plains and Midwest.


In deliveries, Soymeal totaled 87 lots; Soyoil 40; Rice 11; Corn 128; HRW Wheat 2; Oats ZERO; Soybeans 120, SRW Wheat ZERO, and; HRS Wheat ZERO.


The player sheet had funds net buyers of 8,000 contracts of SRW Wheat; bought 18,000 Corn; bought 6,000 contracts of Soybeans; net bought 4,000 Soymeal, and; bought 3,000 lots of Soyoil.


We estimate Managed Money net long 44,000 contracts of SRW Wheat; net long 222,000 Corn; net short 21,000 contracts of Soybeans; net short 9,000 lots of Soymeal, and; net short 27,000 Soyoil.


Preliminary Open Interest saw SRW Wheat futures up roughly 3,200 contracts; HRW Wheat up 1,600; Corn up 4,300; Soybeans up 1,400 contracts; Soymeal up 325 lots, and; Soyoil up 2,800 lots.


There were changes in registrations (Soybeans down 92; Rice up 11)–Registrations total ZERO contracts for SRW Wheat; ZERO Oats; Corn 1,828; Soybeans 286; Soyoil 3,547 lots; Soymeal 745; Rice 1,015; HRW Wheat 5, and; HRS Wheat 1,176 contracts.




In tender activity—S. Korea passed 60,000t optional-origin feed wheat—S. Korea bought 11,000t optional-origin GMO-free soybeans—



USDA July crop supply/demand report results – Reuters News


USDA 2019-20 U.S. wheat production

USDA July Average of Range of USDA
2019-20 analysts’ analysts’ June
estimate estimates estimates estimates
All wheat 1.921 1.908 1.867-1.950 1.903
All winter 1.291 1.277 1.231-1.300 1.275
Hard red winter 0.804 0.799 0.762-0.825 0.794
Soft red winter 0.259 0.255 0.240-0.262 0.258
White winter 0.227 0.223 0.220-0.234 0.222
Other spring 0.572 0.569 0.513-0.617 NA
Durum 0.058 0.059 0.044-0.077 NA



USDA 2019-20 U.S. corn and soybean production

USDA July Average of Range of USDA June
2019-20 analysts’ analysts’ 2019-20
estimate estimates estimates estimate
production 13.875 13.664 13.100-13.960 13.680
Corn yield 166.0 165.0 162.0-167.0 166.0
Soy production 3.845 3.883 3.738-4.100 4.150
Soy yield 48.5 48.6 47.0-51.0 49.5



USDA 2019-20 U.S. grain and soybean ending stocks

USDA July Average of Range of USDA June
2019-20 analysts’ analysts’ 2019-20
end-stocks estimates estimates end-stocks
estimates estimates
Wheat 1.000 1.043 0.990-1.092 1.072
Corn 2.010 1.692 1.450-1.975 1.675
Soybeans 0.795 0.812 0.558-1.040 1.045



USDA 2019-20 world grain and soybean ending stocks

USDA July Average of Range of USDA June
2019-20 analysts’ analysts’ 2019-20
end-stocks estimates estimates end-stocks
estimates estimates
Wheat 286.46 292.43 286.40-295.00 294.34
Corn 298.92 292.48 289.70-298.00 290.52
Soybeans 104.53 109.17 103.00-115.90 112.66



For the week ended July 4th, U.S. All Wheat sales are running 23% ahead of a year ago, shipments up 49% with the USDA forecasting a 1% increase on the year. U.S. Corn sales are running 15% behind a year ago, shipments 5% behind with the USDA forecasting a 14% decline on the year. U.S. Soybean sales are running 15% behind a year ago, shipments 23% behind with the USDA forecasting a 20% decline on the year


Wire story reports a costly tug of war has broken out over what is usually one of the Farm Belt’s most ubiquitous commodities: corn; agribusiness companies, including Cargill Inc., Archer Daniels Midland Co. and Smithfield Foods Inc. are dangling hefty premiums to buy bushels of corn in places where unrelenting rain this spring prevented farmers from planting millions of acres; some farmers, though, are opting to sit on their unsold grain, banking it in case of a diminished harvest this fall — and the potential for still-higher prices ahead.


President Donald Trump accused China of “letting us down” by not promptly buying more U.S. farm products; they have not been buying the agricultural products from our great Farmers that they said they would, the president said on Twitter; “Hopefully, they will start soon.” After meeting with President Xi Jinping late last month, Trump said China had agreed to buy more U.S. agricultural products as part of a cease-fire in the two countries’ trade war; the truce suspended U.S. plans to impose tariffs on an additional $300 billion in Chinese goods — action that would have extended the taxes to everything China ships to America.


A total of 248,900 hectares (615,000 acres) of farmland cannot be harvested because of widespread floods in China last month, the Ministry of Emergency Management said; the floods, which affected swathes of China spanning from the Xinjiang region in the northwest to Guangdong province in the southeast, damaged 1.76 million hectares of farmland as of July 11; they also caused a direct economic loss of 53.4 billion yuan ($7.77 billion); the figure is a upward revision of 13.35 billion yuan loss estimated as of June 13, when the ministry said 371,100 hectares of farmland had been affected.


China imported 6.51 million tons of soybeans in June, down 11.5 percent from 7.36 million tons in May, figures from the General Administration of Customs of China showed; Jan-Jun imports 38.27 mt versus 44.88 mt a year ago; Imports of vegetable oils in June were 805,000 tons, up 13.7 percent from the previous month.


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

—FAS/Moscow forecasts that in MY 2019/20 the production of three major oilseed crops in Russia will total 18.87 MMT and thus remain at the MY 2018/19 level, with soybeans and rapeseeds likely to set new records

—Exports of oilseeds in MY 2019/20 will reach an historic maximum – 1.72 MMT, 7.3 percent above the MY 2018/19 indicator, driven by exports of rapeseeds and soybeans to China

—Due to the higher crop, Post expects to see an increase in oilseeds processing: the production of meals will grow by 5.7 percent, and vegetable oils – by 4.9 percent year-on-year

—Given the surplus volumes of vegetable oils in MY 2019/20, FAS/Moscow expects new records in exports of all vegetable oils – up to a total of 4.20 MMT, or 11.1 percent above the MY 2018/19 indicator


The U.S. Department of Agriculture (USDA) revised up the forecast for Kazakhstan’s wheat production for this marketing year (July 2018 – June 2019), from 13.8 million tons to 14 million tons; the forecast for wheat exports remained flat at 7.5 million tons; imports forecast also remained unchanged at 60,000 tons; the ending stocks of wheat as at July 1, 2019 remained at 1.27 million tons.


The condition of French soft wheat declined further in the week to July 8, with 73% of crops rated good or excellent against 75% the previous week, farm office FranceAgriMer said; the score remained above the year-earlier level of 72%

—Soft wheat harvesting in France was well underway, with 9% of the crop area harvested by July 8 against 1% a week earlier