ADMIS AM Comments

By ADM Investor Services Research Team


Wheat prices overnight are down roughly 3 cents in the SRW Wheat, down 4 in HRW, and up 1 for HRS; Corn is down 1 cent; Soybeans up 1; Soymeal up $0.50, and; Soyoil up 5 points.


For the week, Winter Wheat prices are down roughly 9 cents for Soft Red Winter, down 8 in the Hard Red Winter, and down 5 for Hard Red Spring; Corn is down 9 cents; Soybeans down 19; Soymeal down $7.00, and; Soyoil up 30 points (crushing margins are up 6 cents at $0.99, oil-share is unchanged at 31%).


Chinese Ag futures (September) settled down 28 yuan in Soybeans, down 5 in Corn, down 23 in Soymeal, unchanged in Soyoil, and up 22 in Palm Oil.


The Malaysian Palm Oil market was up 7 ringgit at 2,065 (basis October) in two-sided trade.


Trip to SE South Dakota farm field day found farmers asking why corn prices are not higher due to lower crop. Asked what final corn acres and yield will be. Asked odds for an Ag deal with China. Asked how will US become more competitive for World grain exports. Asked about future of US ethanol demand. Asked how competitive will Black Sea and South America farmers will be. Asked if market trades USDA numbers. Confidence in USDA numbers. Asked best marketing plan for corn and soybeans. Mental health speaker talked about US and Canada farmers record high percent stressed.


The U.S. Midwest weather forecast has the European model now showing it being a bit drier over the next 4 to 5 days then become considerably wetter for the tail end of the 6 to 10 day period; the GFS model has limited rainfall and average to below average temps over the next week to 10 days—temps are near average over the next 4 days with a change to below average temps for most of next week.


The Southern U.S. Plains will see limited rainfall over the next 10 days—temps will be warming to average to above average over the weekend and most of next week.


The Northern U.S. Plains looks to have below average precip starting over the weekend and through most of next week—temps will be warming to above average over the weekend and through most of next week


The U.S. Delta and Southeastern states will dry down significantly through at least the next ten days and by that time topsoil moisture will be short.


The 11 to 16 Day Outlook for the Midwest has a northwest flow bringing below average rains and temps to the region.


Today’s Drought Monitor showed the first signs of abnormally dry subsoil moisture conditions in the central Cornbelt.


The player sheet had funds net buyers of 3,000 contracts of SRW Wheat; sold 13,000 Corn; sold 7,000 contracts of Soybeans; net sold 4,000 Soymeal, and; were net even in Soyoil.


We estimate Managed Money net long 10,000 contracts of SRW Wheat; net long 126,000 Corn; net short 55,000 contracts of Soybeans; net short 36,000 lots of Soymeal, and; net short 30,000 Soyoil.


Preliminary Open Interest saw SRW Wheat futures down roughly 6,600 contracts; HRW Wheat down 3,500; Corn up 4,200; Soybeans down 6,800 contracts; Soymeal down 2,500 lots, and; Soyoil up 3,900.


There were changes in registrations (Soyoil down 78)–


Registrations total ZERO contracts for SRW Wheat; ZERO Oats; Corn 1,251; Soybeans 10; Soyoil 3,322 lots; Soymeal 745; Rice 1,036; HRW Wheat 5, and; HRS Wheat 1,176 contracts.




In tender activity—Philippines passed on 55,000t optional-origin feed wheat—


Harvest yields for the 2019 U.S. hard red spring wheat crop were projected at 43.1 bushels per acre, an annual crop tour said, up from the tour’s projection of 41.1 bushels per acre in 2018 but below its five-year average of 44.7 bushels per acre; scouts on the Wheat Quality Council’s three-day tour of top spring wheat production state North Dakota and parts of Minnesota

—It projected durum yields of 32.0 bushels per acre compared with the five-year average of 40.0 bushels per acre and 39.3 bushels per acre in 2018


The U.S. government will pay American farmers hurt by the trade war with China aid ranging between $15 to $150 per acre starting from mid- to late August, Department of Agriculture officials said as part of President Donald Trump’s up to $16 billion support package; in the new package, the USDA has developed varying county rates, calculated based on estimated trade damage caused by retaliatory tariffs imposed by China, the top export market for many U.S. agricultural products

—Sign-ups for the payments will begin on Monday and last until Dec. 6

—Additional tranches of the payments are scheduled for November and January but will be subject to whether the trade disputes with China and other countries are still ongoing or not by then

—To be considered eligible for payments, acreage of non-specialty crops and cover crops must be planted by Aug. 1, 2019

—The number of farm acres that could not be planted due to weather were at historic levels this year, USDA officials said but added that the department was still working to finalize its estimate


For the week ended July 18th, U.S. All Wheat sales are running 25% ahead of a year ago, shipments up 31% with the USDA forecasting a 2% increase on the year


U.S. Corn sales are running 16% behind a year ago, shipments 8% behind with the USDA forecasting a 14% decline on the year


U.S. Soybean sales are running 16% behind a year ago, shipments 22% behind with the USDA forecasting a 20% decline on the year

—Soymeal sales 3% behind on the year, shipments 5% behind with a 1% decline forecasted

—Soyoil sales 17% behind a year ago, shipments 19% behind with a 16% decline forecasted


The USDA says that 9,400 metric tons of pork were exported to China in the past week, continuing a trend of strong exporting to the nation. However, new sales are lacking, according to USDA’s export sales report for the week — with new Chinese sales encompassing only 1,100 tons of the net sales of 20,900 tons.


The International Grains Council (IGC) on Thursday cut its forecast for global wheat production in the 2019/2020 season, reflecting diminished crop outlooks in Russia and the European Union.

—cut its global wheat crop forecast by 6 million tons to 763 million tons

—Russia seen harvesting a crop of 75.7 mil tons, down from a previous forecast of 79.5 mil

—EU’s wheat crop was seen at 148.7 million tons, down from 151.2 million

—Canada’s wheat crop was cut to 32 million tons from a previous projection of 33.6 million

—trimmed its forecast for 2019/20 world corn production by 3 million tons to 1.092 billion tons.

—the crop in the United States was unchanged at 333.5 million tons

—global soybean production in 2019/20 was seen at 348 million tons, marginally below a previous forecast of 349 million reflecting a downward adjustment for the United States


Saskatchewan crop report

—Seventy-six per cent of the fall cereals, 67 per cent of the spring cereals, 55 per cent of the oilseeds and 69 per cent of the pulse crops are at their normal stages of development for this time of year; some crops are one to two weeks behind in development, which may be of significance depending on the weather during harvest and when the first fall frost occurs


Canadian Oilseed Processors Association Monthly Crush–for the month of June 2019

Figures are in metric tons.

Year Ago    2018/19    2017/18

Canola         Jun 2019   Jun 2018    To Date    To Date

Seed crushed    733,698    742,216   8,440,874   8,430,853

Oil produced    318,648    334,184   3,673,969   3,763,320

Meal produced   411,993    415,167   4,725,463   4,264,533


Seed crushed    133,171    171,361   1,896,000   1,792,119

Oil produced     25,923     31,770     360,759     328,216

Meal produced   102,225    133,056   1,460,692   1,394,456





Japanese trading house Marubeni Corp said that U.S. unit Columbia Grain Trading Inc stopped all new sales of soybeans to Chinese customers from July 24, saying earnings from the business had been hit by the ongoing trade dispute between the United States and China; a spokesman for the Japanese firm said other Marubeni soybean trading business, including that of U.S. unit Gavilon, was continuing as usual involving China and other markets.


A destructive pest will infest another 1.33 million hectares (3.29 million acres) of corn-growing farmland in China in the second half of 2019, a government-backed agriculture institute said; the fall armyworm is expected to hit more areas in the corn growing regions of northern China.


U.S. firms are keen to participate in China’s import expo despite trade frictions between the two countries, China’s assistant commerce minister said; for the United States, even though there are some bilateral trade frictions, it cannot stop U.S. firms from attaching importance to the Chinese market and their great enthusiasm for the Chinese market.


Selected highlights from a report issued by a U.S. Department of Agriculture attache in China

—African Swine Fever (ASF) is endemic across China, but high pork prices will incentivize many Chinese hog farmers to restock or expand, despite the significant animal health risks posed by ASF

—the overall herd size is estimated to decrease by 21 percent in 2019, then further decrease another 10 percent in 2020; while pork consumption is estimated to fall at least 9 percent in 2019, continuing demand for pork will drive a sharp increase in imports, up 60 percent year-on-year

—Frozen domestic pork stocks and imports have insulated domestic price increases in the short term; the combined effects of smaller frozen stocks and an uncertain slaughter output between now and Chinese New Year in early 2020, increases the likelihood of significant consumer price hikes in early 2020

—ASF will also contribute to increased beef demand (along with other animal proteins) in China; despite soaring beef demand in China, U.S. beef imports remain constrained by market uncertainty, China’s retaliatory tariffs, and other factors


Argentina’s 2018-19 corn crop was 68.6% harvested with a healthy average yield of 8.68 tons per hectare, the Buenos Aires Grains Exchange said in a report on Thursday, keeping its harvest forecast unchanged at 48 million tons; harvesting progressed 7.6 percentage points during the week.


SovEcon said it had lowered its forecast for Russia’s grain exports in the new 2019/20 marketing season which started on July 1 by 7 million tons to 41.9 million tons

—The consultancy said it had downgraded the wheat export forecast by 6.2 million tons to 31.4 million tons


Ukraine, which expects its 2019 grain crop to be in line with last year’s level of around 70 million tons, had harvested 27 million tons of early grains by July 25, the agriculture ministry said; farmers have threshed 7.4 million hectares of grains or 76% of the early grains sown area; the harvested volume includes 19.7 million tons of wheat and around 6.7 million tons of barley.


The European Commission cut its forecast of 2019/20 common wheat production in the European Union to 141.3 million tons (mln t) from 142.3 mln t forecast last month; that would still be up sharply from drought-hit 2018/19 production of 128.8 mln t

—the Commission kept unchanged its forecast of EU 2019/20 common wheat exports at 25.5 mln t last month.

—raised its projection of EU 2019/20 maize output to 69.5 mln t from 69.3 mln t last month

—in oilseeds, it cut projected 2019/20 rapeseed production in the 28-member bloc to 18.0 mln t from 18.7 mln t last month, while raising its forecast of imports to 5.0 mln t from 4.5 mln t


The condition of the French grain maize crop, which has faced drought this summer, continues to worsen with 67% in good/excellent condition against 78% a week earlier, FranceAgriMer said

—For soft wheat, crop ratings were unchanged at 73%, with the harvest reaching 63% by July 22 against 33% the previous week and 88% by the same stage last year


South Africa is expected to harvest slightly more maize in 2019 compared with the previous month’s forecast after an uptick in forecast yields from Gauteng and Free State provinces, the government’s Crop Estimates Committee (CEC) said

—The CEC, which gave its sixth estimate for the 2018/2019 season, estimated production to be up 0.42% at 10.979 million tons compared with the June estimate, which had projected that the harvest would be 10.933 million tons.

—The estimate for the 2018/2019 season is 12% less than the 12.510 million tons harvested in the 2017/2018 season, after dry weather delayed plantings


India is likely to get above-average rainfall in the next two weeks after receiving below average rains in the past two weeks, a weather department official said on Thursday, helping summer-sown crops that were wilting in some areas due to a dry spell; above-average rains to help summer crop sowing; rain deficit seen at single digit by end of August


Palm oil prices will rise a touch this year and pick up strongly in 2020 primarily on the back of stronger demand growth, which will shift the market into a deficit, Capital Economics says; it expects policy changes to boost biodiesel demand, while the ongoing spread of African swine fever will reduce demand for pigfeed such as soybeans, reducing the crush and availability of soyoil.


Malaysia’s palm oil exports during the July 1-25 period are estimated down 2.0% on month at 1,150,972 metric tons, cargo surveyor SGS (Malaysia) Bhd. said