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By ADM Investor Services Research Team
Wheat prices overnight are up 2 3/4 in SRW, up 3 1/2 in HRW, up 2 1/4 in HRS; Corn is down 1 1/2; Soybeans down 4 3/4; Soymeal down $0.18; Soyoil up 0.12.
For the week so far wheat prices are up 18 1/2 in SRW, up 22 1/4 in HRW, up 14 1/4 in HRS; Corn is up 5 1/4; Soybeans up 14; Soymeal up $0.37; Soyoil up 0.99. (January crushing margins are 1 1/4 cents around $1.05 1/2, oil-share is up 0.36% at 35.64%).
For the month to date wheat prices are up 9 1/4 in SRW, up 18 3/4 in HRW, up 26 1/4 in HRS; Corn is up 4; Soybeans up 44 1/2; Soymeal up $0.85; Soyoil up 3.00. (January crushing margins up 1 cents around $1.05 1/2, oil-share up 1.36 % at 35.64%).
Chinese Ag futures (MAY 20) Soybeans down 9 yuan ; Soymeal down 9; Soyoil down 8; Palm oil down 26; Corn down 5 — Malasyian Palm is up 17.
Malaysian palm oil prices overnight were up 17 ringgit (+0.59%) at 2875, bouncing back in late trading, with investors shifting their focus back to possible supply disruptions and strong biofuel demand. Prices slipped earlier in the day on a decline in soybean oil, but reversed losses and remained on track for a weekly advance.
Brazils’s Rio Grande do Sul and Parana forecasts are calling for dry conditions or just a few light showers favoring Parana Wednesday-Friday. Temperatures near to above normal Thursday-Friday
Brazil’s Mato Grosso, MGDS and southern Goias is forecasted to see daily episodes of scattered showers and thunderstorms during the next 7 days. Temperatures variable Thursday, near to above normal Friday-Saturday.
Argentina’s Cordoba, Santa Fe, North Buenos Aires forecasts are calling for dry weather through Thursday and scattered light to moderate showers and thunderstorms Friday. Temperatures above normal Thursday and variable Friday.
Argentina’s La Pampa, South Buenos Aires are looking at dry conditions or just a few light showers Thursday and scattered showers and thunderstorms Friday. Temperatures near to above normal Thursday and near to below normal Friday.
The player sheet had funds net sellers of 5,000 contracts of SRW Wheat; sellers -9,000 Corn; net buyers of 1,000 Soybeans; buyers 4,000 Soymeal, and; net sellers of 5,000 lots of Soyoil.
Preliminary changes in futures Open Interest as of December 18 were: SRW Wheat up 3,972 contracts, HRW Wheat down 110, Corn down 9,144, Soybeans down 9,243, Soymeal up 1,587, Soyoil down 1,448.
There were no changes in registrations. Registration total: 40 SRW Wheat contracts; 0 Oats; 197 Corn; 1,436 Soybeans; 2,613 Soyoil; 1,410 Soymeal; 10 HRW Wheat.
Taiwan Flour Millers’ Association purchased 104,600 tonnes of milling wheat to be sourced from the United States.
Ethiopia gets offers in tender to buy 75,000 tonnes wheat.
Chinese importers bought at least two cargoes of U.S. soybeans after receiving another round of tariff-free quota for U.S. shipments on Tuesday
Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it received no offers for feed-quality wheat or barley in a simultaneous buy and sell (SBS) auction that closed late on Wednesday.
Ethiopia issued an international tender to buy about 75,000 tonnes of milling wheat, continuing a series of tenders issued in recent weeks.
A Syrian state grains agency issued an international tender to purchase and import 150,000 tonnes of Russian soft wheat for bread making
Taiwan Flour Millers Association issued an international tender to purchase 104,600 tonnes of US milling wheat.
Japan’s Ministry of Agriculture sought 148,405 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender.
The state purchasing agency in Mauritius issued an international tender to buy 95,000 tonnes of wheat flour to be sourced from optional origins
Syrian state grains agency issued an international tender to purchase 200,000 tonnes of Russian soft wheat for bread.
Germany 2020 winter wheat planted areas is down 7.1% on the year to about 2.83 million hectares. Winter rapeseed plantings have been expanded by 11.8% on the year to about 952,000 hectares after the 2019 crop plantings was the smallest in 22 years and harvest suffered in a summer heatwave.
The EPA’s final rule setting biofuel-blending quotas for 2020 and 2021 will adhere to the agency’s earlier proposal, without changes sought by ethanol advocates, two people familiar with the matter say. White House officials have indicated the rule, expected to be issued as soon as Thursday, will be similar to an earlier slate of proposed quotas and an adjustment plan unveiled in October, the people say Representatives of the Iowa Corn Growers Association met with National Economic Council Director Larry Kudlow on Tuesday. Advocates of soy-based biodiesel and corn-based ethanol have pressed the Trump administration to alter the EPA plan, arguing it falls short of guaranteeing that biofuel quotas are not undermined by waivers exempting refineries from the mandates
Brazil could lose $10 billion per year in farm exports to China if a recent Sino-U.S. trade deal is implemented as proposed, according to a study by Brazilian research center and business school Insper.
Brazil-China trade could return to pre-trade war levels, erasing some of the gains seen, particularly last year. Brazilian farm exports to China surged to $35.4 billion in 2018 from $26.6 billion the year before. In that period, U.S. farm exports to China dropped to $13.2 billion from $24 billion. The first thing that is likely to happen is a rebalancing of soy trade. Brazil sold $1.1 billion in poultry to China in 2018, while U.S. sales stood at only around $100 million. American cotton farmers had long dominated the Chinese market, but Brazilian producers managed to catch up in 2019, helped by the tariffs and higher production. Insper projects U.S. cotton sales to China this year at $714 million and Brazil sales at $711 million.
Chinese commodities trader COFCO, Brazilian grains group AMaggi and a Shell-Cosan joint venture are working on plans to build their first corn ethanol plants in Brazil. UNEM, an association representing corn ethanol makers in Brazil, estimates annual investments of around 2 billion reais ($476.60 million) in plants in the next eight years. It sees total ethanol output at 8 billion liters and total DDGs (dried distillers grains) production at 6 million tonnes per year by 2028.
A U.S. trader confirmed that two cargoes, or about 120,000 tonnes, were sold on Tuesday. A second U.S. trader said four cargoes were sold, and a trader in China said at least six vessels, or more than 400,000 tonnes, were booked.
Refinitiv / Reuters 2019/20 US Crop Estimates
- Production is unchanged at 3.56 [3.4–3.6] billion bushels, as harvests continue to pick up pace.
- Planted and harvested acreage are maintained at 76.7 [75.3–79.0] and 75.4 [74.0–77.6] million acres, respectively, with planted acreage fractionally above USDA’s current figure of 76.5 million acres. USDA’s Farm Service Agency made fractional increases to planted and failed acres of all major crops that should keep expected soybean acreage unchanged in coming reports.
- National-level yield is lowered fractionally to 47.2 [46.0–48.1] bushels per acre, 0.3 bushels per acre above the latest USDA estimate (as of 08 November), after minor downward adjustments in several states with areas still affected by delays (e.g. North Dakota, Michigan).
- Production is lowered fractionally to 13.62 [13.4–13.8] billion bushels, as harvest delays continue in key producing states across the Midwest and Northern Plains.
- Planted area is maintained at 89.8 [88.7–93.1] million acres, while harvested area holds at 81.3 [79.7–82.1] million acres, just over 500 thousand acres below USDA’s current figures. USDA’s Farm Service Agency made fractional increases to planted and failed acres of all major crops that should keep expected corn acreage unchanged in coming reports.
- National-level yield is reduced fractionally to 167.6 [164–169] bushels per acre, slightly above USDA’s latest estimate of 167.0 bushels per acre (as of 08 November), after minor downwards revision in southern producing states.
Winter Wheat Outlook
- Winter wheat planted area unchanged at 31.6 million acres and
- Production is unchanged at 33.6 [28.9–38.6] million tons.
Russian President Vladimir Putin is pleased that in recent years Russia has evolved from a major buyer of grain to a major exporter. “The Soviet Union has always been a buyer of grain, we were one of the largest buyers of grain and wheat. I would like to remind you that now Russia is the largest supplier of wheat to the world market, the number one,” Putin said at his traditional annual news conference on Thursday.
Russia’s Agriculture Ministry proposes subsidies for transporting 2.1m tons of grain from eight eastern regions, according to a filing on a government website.
Grain shipments from France’s Rouen port totaled 195,685 tons in the week to Dec. 18, versus 133,001 tons in the previous week.
Malaysia expects the country palm oil stocks to end the year at 2.1 million tonnes or remain at the current level of 2.25 million tonnes. December 2018, Malaysia’s inventory recorded a near two-decade high of 2.3 million tonnes. The industry regulator expects the introduction of the B20 biodiesel programme in the country to increase local consumption to 25% versus the current 18%.
Glencore Plc added to its stake in Argentina’s biggest soybean-crushing plant, buying shares from its cash-strapped venture partner. Glencore unit Renaisco BV acquired an additional 16.7% stake in its Renova venture from its partner, closely held Vicentin SAIC, for an undisclosed price.