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Matt Bennett reviews all hedge strategies and Brian Splitt puts the chart in perspective ahead of the USDA report, the upcoming end of season weather event and the approaching US-China trade talks .
https://register.gotowebinar.com/recording/5088580897318760705
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By ADM Investor Services Research Team
Wheat prices overnight are down roughly 1 cent in the SRW Wheat, unchanged in HRW, and up 1 for HRS; Corn is down 1 cent; Soybeans up 7; Soymeal up $1.50, and; Soyoil up 10 points.
Chinese Ag futures (January) settled up 20 yuan in Soybeans, up 4 in Corn, up 17 in Soymeal, up 46 in Soyoil, and up 70 in Palm Oil.
The Malaysian Palm Oil market was up 24 ringgit at 2,199 (basis December) at midsession; monthly trade data tomorrow.
The U.S. Midwest weather forecast continues with dry weather through today before rains advance through the region into Saturday where lesser amounts of rainfall will be seen in the east; an early season blizzard is still seen for the Northern Plains; drier weather looks to build back in next week—-temps will be falling to below average through the period.
The Southern U.S. Plains had no major changes with rainfall running above average in the eastern areas of the region with little in the way of rainfall for the rest—–temps will begin to drop to average to below over the weekend and early next week.
The U.S. 11 to 16 Day Outlook looks for an active pattern of above average precip and average to below average precip for the Plains and Midwest.
The South American weather forecast now calls for rains to fall across most of the Argentine growing regions with only the far southern sections remaining dry; rains also look to fall in some of the sections of southern and northern Brazil—-the 6 to 10 day forecast has rains to fall in the same areas as Argentina and Brazil as over the past 5 day forecast—–temps will be seen running near average in most of the South American growing areas over the next 10 days.
In deliveries, Soymeal totaled 179 lots; Soyoil 52.
The player sheet had funds net buyers of 7,000 contracts of SRW Wheat; net bought 26,000 Corn; net bought 10,000 Soybeans; bought 5,000 lots of Soymeal, and; net sold 1,000 Soyoil.
We estimate Managed Money net short 18,000 contracts of SRW Wheat; net short 106,000 Corn; net long 1,000 contracts of Soybeans; net short 43,000 lots of Soymeal, and; net long 25,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 12,700 contracts; HRW Wheat up 4,200; Corn up 22,900; Soybeans up 7,500 contracts; Soymeal up 1,900 lots, and; Soyoil up 2,300.
There were changes in registrations (SRW Wheat down 15, Rice down 60)—Registrations total 45 contracts for SRW Wheat; ZERO Oats; Corn 1,071; Soybeans 1,144; Soyoil 1,535 lots; Soymeal 810; Rice 1,082; HRW Wheat 11, and; HRS Wheat 669 contracts.
TODAY—–WEEKLY ETHANOL STATS—
In tender activity—-Japan seeks 114,000t optional-origin wheat—Jordan bought 60,000t optional-origin wheat—Egypt bought 295,000t Russian, Ukraine wheat—
Chinese officials are offering to increase annual purchases of U.S. agricultural products by $10 billion as the two countries seek to resolve their trade dispute, the Financial Times newspaper reported on Wednesday, citing unnamed sources; Vice Premier Liu He, China’s top trade negotiator, is scheduled to travel to Washington for their next round of trade talks on Oct.10-11; Beijing last month increased its purchases of U.S. agricultural products including soybeans and pork.
—China is still open to agreeing a partial trade deal with the United States, Bloomberg reported on Wednesday, citing an official with direct knowledge of the talks, despite the recent blacklisting of Chinese technology firms
U.S. Weekly Deliverable Stocks of
—SRW Wheat totaled 41.7 mil bu versus 41.8 mil last week and 70.7 mil a year ago
—HRW 104.2 mil (103.9 last week, 121.3 mil a year ago)
—HRS 23.1 mil bu (21.5 mil a week ago, 21.3 mil last year)
—Corn totaled 2.2 mil bu (2.4 mil last week, 5.1 mil a year ago)
—Soybeans totaled 13.1 mil bu (12.7 mil last week, 10.8 mil a year ago)
Wire story was commenting some market participants have been waiting for the U.S. Department of Agriculture to finally acknowledge that the 2019 U.S. corn and soybean harvests will not be as large as the agency has previously stated, primarily due to historically late planting and crop development; but industry analysts polled ahead of USDA’s next update, set for Thursday at noon EDT, do not see an extraordinary amount of further downside for the harvests; the ranges of ideas are also relatively narrow
—In the last 25 years, October corn yield has landed more than 2 bpa below the September figure only four times; the 2010 deviation was the largest at 6.7 bpa, and corn yield landed 4.5 bpa lower in 1995; the other two years were 1993 and 2000
—For soybeans, there are only three instances in the last quarter century where October yield was at least 1 bpa lower than in September; the biggest deviation was 2.4 bpa in 2003, when an aphid outbreak significantly reduced yield; the other two years were 1995 and 1998
Manitoba crop report
—canola harvest progress advanced in the Central, Interlake and Northwest regions, and soybean harvest progress jumped over the past three days, but harvest stalled in the Eastern region with repeated rains
—quality of unharvested cereals, dry beans, and canola is decreasing with repeated rains, and sprouting is becoming severe on unharvested swathed crops
—soybean yields are poor to below average; some localized harvest losses reported from split pods
—overall harvest progress is approximately 71% complete, below the 3-year average of 85% for the second week of October
CHINA SELLS 5,862 TONNES OF WHEAT, OR 0.19% OF TOTAL OFFER, AT AUCTION OF STATE RESERVES – TRADE CENTRE
—THE AVERAGE SELLING PRICE OF WHEAT IS 2,346 YUAN PER TONNE
CHINA SELLS 19,678 TONNES OF IMPORTED 2013 WHEAT, OR 14.65% OF TOTAL OFFER, AT AUCTION OF STATE RESERVES – TRADE CENTRE
—THE AVERAGE SELLING PRICE OF IMPORTED 2013 WHEAT IS 2,000 YUAN PER TONNE
Russian exports of wheat decreased to 18.5 million tons in the first eight months of 2019 from 27.8 million tons a year ago, official customs data showed
—vegoil exports were up 37% to 1.994 mt versus 1.448 mt the same period a year ago (Jan-Aug)
Ukraine 2019/20 grain export seen rising to 56.57 mln T – analyst ProAgro
- ANALYST PROAGRO RAISES UKRAINE 2019/20 WHEAT EXPORT FORECAST TO 19.3 MILLION T FROM 19.0 MILLION T
- RAISES UKRAINE 2019/20 GRAIN EXPORT FORECAST TO 56.57 MILLION T FROM 53.70 MILLION T
- INCREASES UKRAINE 2019/20 CORN EXPORT FORECAST TO 31.6 MILLION T FROM 29 MILLION T
Rain boosts prospects for western European crop sowing
- Rapeseed area in France may rise slightly but remain low
- Improved conditions seen boosting rapeseed area in Germany
- More wheat, less rapeseed seen in Britain and Poland
—Recent rain has brought relief to parched western European grain belts and improved conditions for cereal sowing and for earlier-sown rapeseed crops
—Limited rain and scorching summer temperatures had hampered early rapeseed sowing and raised fears of a repeat of drought losses seen during last year’s planting season; but widespread rainfall since late September, notably in top European Union grain producer France, has provided some relief.
France exported 1.25 million tons of soft wheat in August, the second month of the 2019/20 marketing season, including 636,000 tons shipped outside the European Union, customs data showed; that was below the 1.4 million tons of soft wheat exported in July, of which 722,000 tons was outside the EU
—Cumulative French soft wheat exports in July-August reached 2.7 million tons, down 4.3% percent from the same period last year, the customs data showed
Farm office FranceAgriMer increased its forecast of French soft wheat exports outside the European Union this season to 11.7 million tons from its initial projection of 11.0 million last month; the revised 2019/20 forecast was up nearly 14% compared with last season’s level
—Forecast soft wheat stocks at the end of this season were cut to 2.9 million tons from 3.3 million seen last month but would be 32% above 2018/19
—France is estimated to have harvested its second-largest soft wheat crop on record, with the farm ministry on Tuesday putting production at 39.7 million tons, nearly 17% above last year’s level
The United Kingdom’s wheat harvest this year is provisionally seen at 16.28 million tons, up 20.1 percent from the prior season, Britain’s farming ministry said
European wheat prices edged higher on Tuesday in the wake of a rise in U.S. markets but were pressured by French wheat’s lack of competitiveness in a tender by major grain importer Egypt due to high freight rates; benchmark December milling wheat was 0.7% higher to 177.75 euros a ton.
The outlook for Australia’s grain crop looks worse as a result of inadequate rainfall, the USDA says
—Wheat and barley production may only be slightly above last year’s drought-impacted production levels and sorghum production is set to fall
—while bumper crops in Western Australia helped offset poor Eastern Australian harvests last year, this is not expected to be the case this year as crop conditions have worsened in Western Australia
—the USDA is forecasting Australian wheat production at 18 million metric tons in the year ended Sep. 30, 2020, up from 17.3 million tons in the prior year
—tight supplies of Australian wheat will likely mean prices there will remain at a premium to global prices
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