AM ADMIS Commentary 011420

By ADM Investor Services Research Team


Overnight trade has SRW up roughly 2 cents, HRW up 2, HRS Wheat unchanged, Corn is unchanged, Soybeans down 1, Soymeal up $1.00, and Soyoil down 40 points. US farmer has increased  corn and soybean cash sales after disappointing USDA report. Elevators also selling basis corn and soybeans. Commercial concerned when China buys they may buy new crop 2020.


Chinese Ag futures (May) settled up 1 yuan in Soybeans, up 9 in Corn, down 7 in Soymeal, down 84 in Soyoil, and down 124 in Palm Oil.


The Malaysian Palm Oil market was down 74 ringgit at 3,032 (basis March) on further ringgit strength and India, Malaysian import relations.




The South American weather forecast for Brazil has not changed much with rains seen falling through much of the region over the next 6 to 10 day period.


The Argentine weather forecast is turns dry through the upcoming weekend with rains returning by midweek next week.


Deliveries totaled 235 for Soymeal; 281 Soyoil, and 18 of Soybeans.


The player sheet had funds net sellers of 3,000 contracts of SRW Wheat; net buyers of 12,000 Corn; sold 3,000 Soybeans; bought 2,000 lots of Soymeal, and; net sold 3,000 Soyoil.


We estimate Managed Money net long 36,000 contracts of SRW Wheat; net short 62,000 Corn; net long 2,000 contracts of Soybeans; net short 23,000 lots of Soymeal, and; net long 98,000 Soyoil.


Preliminary Open Interest saw SRW Wheat futures up roughly 10,800 contracts; HRW Wheat up 4,100; Corn up 8,500; Soybeans up 7,300 contracts; Soymeal down 775 lots, and; Soyoil up 320.


There were changes in registrations (up 54 in Soymeal)—Registrations total ZERO contracts for SRW Wheat; ZERO Oats; Corn 58; Soybeans 195; Soyoil 2,793 lots; Soymeal 1,714; Rice 565; HRW Wheat 10, and; HRS Wheat 788 contracts.





In tender activity—Egypt seeks optional-origin wheat—Turkey seeks 100,000t optional-origin wheat—Egypt seeks 3,000t optional-origin soyoil, 2,000t sunoil—


President Trump will be the keynote speaker at the American Farm Bureau’s annual convention on Sunday, making it the third year in a row Trump has been the head guest, the Farm Bureau says; Agriculture Secretary Sonny Perdue and EPA Administrator Andrew Wheeler will also be in attendance.


The U.S. Treasury Department will drop its designation of China as a “currency manipulator” just two days before negotiators from Beijing and Washington are set to sign the first phase of the trade deal between the two countries; the trade agreement will include a section on Chinese currency practices that addresses many of the concerns raised when the U.S. applied the manipulator designation in August; as part of the agreement, China will commit to not depress its exchange rate and will make additional disclosures about its foreign-exchange practices.


—Wire story was reporting if this week’s signing of the phase-one trade deal in Washington between China and the US plays out successfully, then it will signal a shift among US farmers, with the focus of most traders going from the signing of a deal to whether or not the buying terms of the deal will come to fruition in 2020; there had previously been a lot of discussion about acreage shifting to corn this year but with Chinese bean prospects looking up, and more than a little financial stress at the farm level, that would seem questionable


—Farmers participating in U.S. crop subsidy programs reported “prevented plantings” for Jan. 2 of 11.433 million acres of corn, 4.461 million acres of soybeans and 2.220 million acres of wheat, the U.S. Department of Agriculture (USDA) said; producers enrolled in subsidy programs for Jan. 2 reported planted acreage, including failed acres, at 87.176 million acres of corn, 75.084 million acres of soybeans and 46.843 million acres of wheat



Yesterday’s U.S. weekly export inspections had Wheat exports running 14% ahead of a year ago (15% last week) with the USDA currently forecasting a 4% increase on the year. Corn 54% behind a year ago (54% last week) with the USDA down 14% for the season. Soybeans 25% ahead of a year ago (up 25% last week) with the USDA having a 2% increase forecasted on the year


U.S. soybean processing rebounded in December from a smaller-than-expected crush rate in November, although the total was likely just below the record December pace set a year earlier, according to analysts polled ahead of a monthly National Oilseed Processors Association (NOPA) report due on Wednesday


—NOPA members likely crushed 171.644 million bushels of soybeans last month; if realized, it would be the second-largest December crush on record, just below the 171.759 million bushels crushed in December 2018; but the crush would be up about 4.1% from November’s lower-than-expected crush of 164.909 million bushels; crush forecasts for December ranged from 168.215 million to 174.034 million bushels

—The monthly NOPA report will be released at 11 a.m. on Wednesday


—Soyoil supplies among NOPA members at the end of December were seen rising to 1.507 billion pounds, up from 1.448 billion at the end of November and 1.498 billion at the end of December 2018; estimates for soyoil stocks ranged from 1.471 billion to 1.550 billion pounds


Shares of Beyond Meat Inc powered up 10% in midday trading Monday toward a three-month high, to extend last week’s big rally as some industry experts suggested plant-based meats are now more than just a novelty option for consumers-based-foods-are-officially-mainstream-2020-01-10); the stock has now run up 30% amid a three-day win streak, and has soared 42% in a week; the rally came despite new product announcements from competitors, as Impossible Foods said it was adding pork and sausage to its plant-based meat lineup, and Kroger Co. (KR) announced that launch of “Emerge: Plant Based Fresh Meats.”


China’s soybean imports in December surged 67% from a year earlier to a 19-month-high, customs data showed as a flurry of U.S. and Brazilian cargoes booked earlier cleared customs; China brought in 9.54 million tons of the oilseed, up from 5.72 million tons a year earlier



—China’s pork imports in December rose almost four times from a year earlier, according to Reuters calculations of customs data released; December arrivals were 375,000 tons compared with 95,384 tons a year earlier and 229,707 tons in November 2019


—December beef arrivals climbed 80.6% on the year to 189,000 tons according to Reuters calculations; they were up marginally from November imports of 186,984 tons; in 2019, beef arrivals rose 59.7% year-on-year to 1.66 million tons


Ukraine’s grain harvest last year hit a record high of over 75 million tons compared to 70.1 million tons in 2018, the Ukrainian Ministry for Development of Economy, Trade and Agriculture reported

—As of Jan. 10, 2020, Ukraine has exported 32.08 million tons of grain since the beginning of the 2019/2020 marketing year (July 2019 – June 2020), with China being one of the largest importers of Ukrainian grains.


Strikes on the French railway network could hurt grain exports from the European Union’s largest wheat producer by disrupting transport links between farms and ports.

—Euronext wheat rose on Monday to its highest in more than seven months as supply snags in France caused by transport strikes added to support from brisk overseas demand; benchmark March milling wheat settled up 1.50 euros, or 0.8%, at 193.00 euros ($214.98) a ton