AM Comments

By ADM Investor Services Research Team


Wheat prices overnight are up roughly 6 cents in the SRW Wheat, up 5 in HRW, and up 3 for HRS; Corn is up 2 cents; Soybeans unchanged; Soymeal up $1.00, and; Soyoil down 20 points.


Chinese Ag futures (September) settled down 5 yuan in Soybeans, down 2 in Corn, up 4 in Soymeal, down 46 in Soyoil, and down 44 in Palm Oil.


The Malaysian Palm Oil market was down 40 ringgit at 2,017 (basis August) on drops in rival oils, output worries.


The U.S. Midwest weather forecast had no major changes as the wet pattern looks to continue across much of the Midwest through the weekend and into most of next week with a stalled front providing waves of showers and thunderstorms—-temps will be below average in the west, average to above elsewhere.


The Southern U.S. Plains had no major changes as a wet pattern continues through the holiday weekend; the rest of next week looks to be quieter across the region—temps will be running below average through the weekend and warming to average for next week.


The Northern U.S. Plains continues with a wet pattern through the holiday weekend but things look to turn quieter across the region next week—temps will be running below average.


The U.S. Delta and the Southeast will see a drying trend during the next two weeks


The 11 to 16 Day Outlook has the models more in agreement with average to above average rainfall to continue across much of the Plains and the Midwest but slightly less than what has been occurring—temps are seen running below average in the Midwest, average in the Plains.


The player sheet had funds net sellers of 4,000 contracts of SRW Wheat; bought 14,000 Corn; bought 7,000 contracts of Soybeans; net bought 4,000 lots of Soymeal, and; bought 3,000 Soyoil.


We estimate Managed Money net short 64,000 contracts of SRW Wheat; net short 129,000 Corn; net short 161,000 contracts of Soybeans; short 36,000 lots of Soymeal, and; net short 77,000 Soyoil.


Preliminary Open Interest saw SRW Wheat futures down roughly 190 contracts; HRW Wheat down 3,400; Corn down 1,900; Soybeans up 1,100 contracts; Soymeal down 435 lots, and; Soyoil up 4,800 lots.


There were no changes in registrations—Registrations total 246 contracts for SRW Wheat; 2 Oats; Corn 1,036; Soybeans 640; Soyoil 3,547 lots; Soymeal ZERO; Rice 663; HRW Wheat 5, and; HRS Wheat 571 contracts.





In tender activity—Jordan again tenders for 120,000t optional-origin wheat—


Wire story reports the wettest year on record is raising costs for the nation’s biggest agricultural companies, stalling farmers’ fieldwork and slowing shipments across the U.S. Farm Belt; the past 12 months were the wettest May-to-April period in the contiguous U.S. since record-keeping began in 1895, according to the National Oceanic and Atmospheric Administration; while farmers run their tractors full-speed between rainstorms, time is growing short for agricultural companies to sell some of their most profitable products, such as full-season corn seed; delays planting corn, which typically is sown in late April and early May, are leading some farmers to switch fields to soybeans or shorter-season corn varieties, which tend to be less lucrative for seed and farm-chemical companies.


Trade estimates for USDA weekly grain, soy export sales

Trade estimates for 2018-19 Trade estimates for 2019-20
Wheat (100,000)-200,000 100,000-500,000
Corn 200,000-600,000 50,000-450,000
Soybeans 0-400,000 100,000-400,000
Soymeal 50,000-300,000 25,000-100,000
Soyoil 4,000-25,000 0


U.S. ethanol production for the week ended May 17th averaged 1.071 mil barrels per day (up 1.90% versus a week ago, up 4.18% versus a year ago); stocks totaled 23.404 mil barrels (up 5.19% versus a week ago, up 5.76% versus last year); corn use for the week was 110.6 mil bu (108.4 mil last week and versus the 100.6 mil bu needed to meet USDA projections)

—News wire opinion claimed for corn futures, the increase in ethanol stored was unexpected, and not bullish for prices; however, the production figure is the largest since August 2018, also unexpected


Weekly U.S. Poultry Stats

—Broiler-Type Eggs Set in the United States Up 1 Percent

—Broiler-Type Chicks Placed in the United States Up 2 Percent


USDA Cold Storage: Totals (in thousand pounds)


Apr 30     Mar 31     Apr 30      Mar 31   warehouse

2019       2019       2018       2018   stocks/Apr

total pork            621,863    608,375    634,722    611,013     567,256

total beef            430,346    451,938    471,160    463,957     424,146

total chicken         893,554    868,240    867,534    871,473


North American rail traffic fell 1.2% last week, as a decline in intermodal volume more than offset gains in carloads, the Association of American Railroads said

—For the first 20 weeks of the year, North American volume is down 1.3%.

—U.S. rail traffic is down 2% for the year to date, the AAR said


News wire story reports China’s domestic food security that has already been ravaged by African swine fever and is under pressure from increased tariffs from the trade war with the United States could be further hit by a devastating and rapidly spreading pest within the next two months, according to academics; the fall armyworm has already affected farms in southern China, and could hit the country’s crop-growing heartlands in the north and northeast as temperatures rise, increasing the risks to crop production as Chinese tariffs restrict the country’s ability to purchase American crops as replacements.


China’s grain, pork imports in April 2019

April 2019(tons) Pct change year-on-year Year-to-date (tons) Pct change year-on-year
Corn 660,000 75.1 1.65 mln 75.8
Wheat 220,000 -41 1.25 mln 23
Barley 610,000 -45.6 2.54 mln -16.4
Sorghum 0 -99.7 0 -99.8
Pork 136,517 24 470,776 8.4


China imported 136,517 tons of pork in April, up 24% from the same month a year earlier, customs data showed, as the world’s top consumer of the meat stocked up on supplies amid concerns of a looming shortage; this marked the biggest monthly volume since September 2016, when pork imports topped 140,000 tons; they have only come close to such a high level once since then when, hitting 135,900 tons in March 2018; China has imported 470,776 tons of pork in the first four months of 2019, up 8.4% compared with last year.


Tyson Foods is in talks to set up a beef processing plant in Kazakhstan, as part of the central Asian country’s push to attract investment by projecting itself as an agricultural powerhouse on China’s border; the multibillion-dollar investment would allow the U.S. meat company to dodge high tariffs on American agricultural goods and give a backdoor access into China; earlier this month Tyson had projected its U.S. pork, chicken and beef units could all benefit from increased demand linked to outbreaks of African swine fever which spread rapidly across Asia.


Argentina’s economic activity shrank in March from February as big declines in manufacturing and retail outweighed an improvement in agriculture; activity declined a seasonally adjusted 1.3% in the month, and shrank 6.8% from a year earlier; it was the first time in four months that activity fell; the country’s high interest rates and high unemployment, along with government spending cuts, are reducing business and consumer demand; that has hit the construction, retail and industrial sectors and pushed some factories to idle production in March to reduce their inventories.

—Argentina’s economy will probably stabilize in the second quarter of this year and enjoy a mild recovery in the second half, according to an economist at Goldman Sachs in New York


Russia plans to cut wheat exports in the new 2019/20 marketing season starting July 1 by 1 million tons due to higher domestic demand, the Deputy Agriculture Minister said; Russia will be able to export 45 million tons of grains in the 2019/20 season, including 36 million tons of wheat; Russia is expected to export 44 million tons of grains, including 37 million tons of wheat, in the current 2018/19 season.


The Moroccan government is expected to reintroduce a customs duty on soft wheat imports to promote sales from the local harvest which has been hit by a lack of rainfall; Morocco scrapped a customs duty on soft wheat imports in November to maintain price stability; raising the customs duty on soft wheat is a usual procedure at this time of the year and may continue for up to three months to protect the local output; Morocco’s cereals production is expected to total 6.1 million tons in 2019, down 40.7 percent from last year