ADMIS AM Comments 071519

By ADM Investor Services Research Team


Wheat prices overnight are up roughly 3 cents in the SRW Wheat, unchanged in HRW, and up 3 for HRS; Corn is up 3 cents; Soybeans up fractionally; Soymeal up $0.50, and; Soyoil up 10 points.


For the week, Winter Wheat prices were up roughly 10 cents for Soft Red Winter, up 20 in the Hard Red Winter, and up 8 for Hard Red Spring; Corn was up 17 cents; Soybeans up 37; Soymeal up $9.00, and; Soyoil up 80 points (crushing margins were down 8 cents at $0.92, oil-share was unchanged at 30%).


Chinese Ag futures (September) settled up 34 yuan in Soybeans, up 11 in Corn, up 50 in Soymeal, up 26 in Soyoil, and up 30 in Palm Oil.


The Malaysian Palm Oil market was up 15 ringgit at 1,959 (basis September) on some uptick in export demand by private surveyors.


The U.S. Midwest weather forecast has a wedge of dryness mostly in the center of the Midwest over the next 10 days with all other areas seeing decent rainfall over the next 5 days and little in the way of rainfall over the next 10 days—temps will be running average to above average over the next 5 days heating up to above average for the 6 to 10 day period.


The Southern U.S. Plains has little in the way of rainfall over the next 10 days—temps will be near average over the next 5 days warming to well above average in the 6 to 10 day period.


The Northern U.S. Plains will have close to average precip over the next 10 days—temps will be running average to above over the next 5 days and then above average after that.


The U.S. Delta and Southeastern states will experience scattered showers and thunderstorms this week.


The 11 to 16 Day Outlook has ridging over the west with a northwest flow bringing average to below average precip and average temps to the Midwest.


In deliveries, Soymeal totaled 17 lots; Soyoil 30; Rice 28; Corn 429; HRW Wheat 5; Oats ZERO; Soybeans 100, SRW Wheat 25, and; HRS Wheat ZERO.


The player sheet had funds net buyers of 3,000 contracts of SRW Wheat; bought 21,000 Corn; bought 8,000 contracts of Soybeans; net bought 2,000 Soymeal, and; bought 3,000 lots of Soyoil.


We estimate Managed Money net long 43,000 contracts of SRW Wheat; net long 234,000 Corn; net short 21,000 contracts of Soybeans; net short 13,000 lots of Soymeal, and; net short 24,000 Soyoil.


Preliminary Open Interest saw SRW Wheat futures down roughly 195 contracts; HRW Wheat down 985; Corn up 20,400; Soybeans up 5,300 contracts; Soymeal up 125 lots, and; Soyoil up 4,800 lots.


There were changes in registrations (SRW Wheat up 25; Soybeans down 24; Rice up 21)–Registrations total 25 contracts for SRW Wheat; ZERO Oats; Corn 1,828; Soybeans 262; Soyoil 3,547 lots; Soymeal 745; Rice 1,036; HRW Wheat 5, and; HRS Wheat 1,176 contracts.





President Donald Trump has repeatedly told U.S. farmers he will support ethanol and he largely continues to have their support but many are growing unhappy with EPA decisions that hamper ethanol production; the EPA refuses to restore 2.6 billion gallons (9.84 billion liters) of ethanol removed from production through refinery waivers; it’s a significant blow to corn farmers and counter to Trump’s promise but many hesitate to blame Trump, known for retaliatory tweets.


NOPA June U.S. soy crush seen at 154.405 mln bushels -survey – Reuters News

—U.S. soybean crushings likely declined for a third straight month in June to a 16-month low

—NOPA members likely crushed 154.405 million bushels of soybeans last month

—a drop from the May crush of 154.796 million bushels and a crush of 159.228 million bushels in June 2018

—Crush forecasts for June ranged from 147.937 million to 164.500 million bushels


Soyoil supplies expected to be down for a second straight month

—at 1.527 billion pounds, a six-month low

—Stocks stood at 1.581 billion pounds at the end of May and 1.766 billion pounds at the end of June 2018

—Soyoil stocks estimates ranged from 1.490 billion to 1.595 billion pounds


Speculators’ bullish views in Chicago-traded corn futures and options have withstood back-to-back bearish reports from the U.S. government without missing a beat, a sign the market still expects the U.S. crop to fall sufficiently short of expectations; corn futures plummeted on June 28 when a U.S. Department of Agriculture survey showed far more planted acres than predicted; on Thursday, USDA’s monthly supply and demand report raised domestic corn ending stocks for the upcoming year by 20% on a cut to demand, well above the average trade guess; but by Friday’s close, investors were presumably holding the biggest net long position in corn since June 2016.

‘Oil World’

Significant Uncertainties About the True Situation of US Corn and Soybean Crops

Weather developments in the northern hemisphere will be major price-determining factors in the next 4-8 weeks

—World exports of 8 veg oils increased in Jan/June 2019, stimulated by low prices and partly by insufficient production in major importing countries.

—Looming severe shortfall of production likely to boost EU imports of rapeseed to unprecedented levels in 2019/20.

—G-4 soybean disposals continued to trail the year-ago level in May and June, which is bearish.

—Lower than expected Malaysian disposals out-weighed the bullish impact of the slowdown of palm oil production in June

—Indonesian exports of palm oil and biodiesel increased sizably from a year earlier in May


Total 2019-crop wheat quantity outstanding into the government’s 9-month price support loan program are 0.249 million bushels, an increase of 0.072 million bushels during the week ended Jly 8


—Total 2018-crop corn quantity outstanding into the government’s 9-month price support loan program are 397.122 million bushels, a decrease of 35.287 million bushels during the week


—Total 2018-crop soybean quantity outstanding into the government’s 9-month price support loan program is 105.178 million bushels, a decrease of 5.899 million bushels during the week


China’s summer grain output rose 2.1 percent to 141.74 million tons in 2019, the National Bureau of Statistics said; summer wheat output rose 2.1 percent to 131.06 million tons adding that summer grain acreage was at 26.35 million hectares in 2019, down 1.3 percent from last year.


China’s pig herd shrank 25.8% in June compared with the same month a year earlier, while the sow herd contracted 26.7%, the Ministry of Agriculture and Rural Affairs said


—China’s pork output fell by less than expected in the first half as the country tackles a devastating disease outbreak, although official data showed conflicting figures on the size of the decline in the hog herd; China produced 24.7 million tons of pork in the first six months of 2019, down 5.5% from a year earlier; China’s hog herd declined 15% from a year ago to 347.61 million head; but figures from the Ministry of Agriculture and Rural Affairs on the same day said the herd had shrunk 25.8% in June from a year earlier, with the number of sows down 26.7%; analysts were surprised at the fall in pork output, which showed the pace of decline little changed from 5.2 percent in the first quarter, even as swine fever has spread to every province in China; it’s much smaller than expected


—Beijing has urged poultry producers to boost output to help supplement the fall in pork production; output of poultry meat rose 5.6% in the first six months, while beef output increased 2.4% and lamb output rose 1.4%; total meat output including pork, beef, lamb and poultry fell 2.1% in the first half to 39 million tons


—Criminal gangs in China are faking outbreaks of African swine fever on farms free of the disease and forcing farmers to sell their healthy pigs at sharply lower prices, the agriculture ministry said; the gangs are taking advantage of a highly contagious disease that has spread across much of the country and disrupted the world’s biggest pork market; the scam involves dumping dead pigs on farms and then spreading rumors that the farms are infected with African swine fever; the gangs then pressure farmers to sell their hogs at lower prices, violating farmers’ rights and affecting normal pig production.


Cargill shuttered animal-feed mills in China in recent months partly because the rapid spread of a fatal hog disease has reduced demand, a company executive said; the closures highlight the pain for global agriculture companies from the outbreak of African swine fever in China; this is not a six-month trend for China to recover, the president of Cargill’s animal nutrition and pre-mix business said; this is a 24-month, 36-month kind of resetting of the world’s population of animals.


The further spread of African swine fever in Asian and Europe is likely to soften demand for soybeans — used in pig feed — over the coming months, says Capital Economics; “We expect demand to soften in coming months and for relatively high stocks to weigh on prices.”; it notes this is contrast with recent moves in soybean prices, which have been one of the strongest prices performers.


Russia’s exports of oilseeds in 2019-20 may reach a total of up to of 1.72 million metric tons, up 7.3% on 2018-19 “driven by exports of rapeseed and soybeans to China,” says the U.S. Department of Agriculture

—It adds that production of oilseeds in 2019-20 will be in line with 2018-19 at 18.87 million metric tons, although soybeans and rapeseed are likely to set a new record

—The USDA’s local office expects new records in exports of all vegetable oils, up 11.1% on the prior year


Ukrainian ProAgro agriculture consultancy on Monday revised up its 2019 grain harvest forecast for Ukraine to 72.55 million tons from 71.3 million tons due to a higher corn harvest; the consultancy said Ukraine was likely to harvest 34.52 million tons of corn this year, with an average yield of 7.25 tons per hectare


Ukrainian grain exports from sea ports in the week of July 6-12 dropped to 427,000 tons from 1.129 million tons a week earlier, preliminary data from APK-Inform consultancy showed; corn exports fell to 187,000 tons from 785,000 tons in the previous week, while wheat shipments decreased to 125,000 tons from 157,000 tons; Ukraine exported a record 49.7 million tons of grain in the previous season.




Indian farmers have planted 41.3 million hectares with summer crops, down 8.6% year on year, the Ministry of Agriculture & Farmers’ Welfare said, though the gap in sowing narrowed from the previous week as monsoon rains picked up

—Corn planting was at 4.1 million hectares, almost unchanged from the previous week.

—Sowing of soybean, the main summer oilseed crop, was at 5.2 million hectares, down from 6.4 million hectares the previous year


Indonesia exported 2.03 million tons of palm and palm kernel oils in the month of April and 2.40 million tons in May, the Indonesia Palm Oil Association (GAPKI) said; exports rose 12% on year in May after declining 9% in April

—Indonesia added 4.64 million tons and 4.73 million tons to palm oil inventories in April and May respectively pushing domestic stock to 3.53 million tons by the end of May


Malaysia’s palm oil exports during the July 1-15 period are estimated up 0.4% on month at 658,182 metric tons, cargo surveyor SGS (Malaysia) Bhd. said Monday.

—Exports of Malaysian palm oil products for July 1 – 15 rose 11.6 percent to 679,920 tons from 609,268 tons shipped during June 1 – 15, cargo surveyor Intertek Testing Services said

—Malaysia’s palm oil exports during the July 1-15 period are estimated up 3.0% on month at 656,210 metric tons, cargo surveyor AmSpec Agri Malaysia said