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We cover world corn demand as well as what to do with corn and soybeans that you are not storing.
ADMIS AM Comments
Overnight trade has SRW Wheat up roughly 5 cents, HRW up 5; HRS Wheat up 3, Corn is up 1 cent; Soybeans up 9; Soymeal up $4.00, and Soyoil up 40 points.
Chinese Ag futures (January) settled up 88 yuan in soybeans, down 6 in Corn, up 10 in Soymeal, down 46 in Soyoil, and down 78 in Palm Oil.
Malaysian palm oil prices were up 84 ringgit at 2,860 (basis January) supported by Oct 1-20 export data.
U.S. Weather Forecast
Last night’s GFS model run showed little to no changes with the rounds of accumulating snow that will impact portions of the Northern Plains tonight into Sunday. The snow will cause notable late season fieldwork delays; however, the moisture from this will be important for winter wheat establishment in the western part of the region. The snow will also be important for protecting crops from some extreme lows below 0 degrees Fahrenheit this upcoming weekend into early next week. Rounds of rain and snow in the Corn Belt in the first week of the outlook will cause fieldwork delays as well.
Notable dryness will continue in west-central and southwestern Hard Red Winter Wheat production areas through Saturday. This area may receive “some” precipitation Sunday through next Monday; however, significant improvement of soil moisture is not expected. Another period of dryness will then occur in the second week of the outlook in the region.
South America Weather Forecast
South America is still expected to have improving weather over the next two weeks. A rain event will impact a majority of Argentina with meaningful moisture Saturday through Sunday benefiting summer crops. In Brazil, conditions will involve a mostly favorable mix of rain and sunshine for crop development and fieldwork advancement; though, rain in and near Minas Gerais may be enough to cause some fieldwork delays and localized flooding.
The player sheet had funds net buyers of 2,000 SRW Wheat; bought 9,000 Corn; bought 5,000 Soybeans; bought 5,000 Soymeal, and; net sold 3,000 Soyoil.
We estimate Managed Money net long 62,000 contracts of SRW Wheat; long 216,000 Corn; net long 237,000 Soybeans; net long 91,000 lots of Soymeal, and; long 75,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 6,500 contracts; HRW Wheat up 1,000; Corn up 22,700; Soybeans up 635 contracts; Soymeal up 2,100 lots, and; Soyoil down 2,300.
There were no changes in registrations—Registrations total 109 contracts for SRW Wheat; ZERO Oats; Corn 361; Soybeans 1; Soyoil 1,907 lots; Soymeal 250; Rice ZER0; HRW Wheat 135, and; HRS 1,195.
Tender Activity—Japan seeks 80,000t optional-origin wheat—Algeria seeks 50,000t optional-origin wheat; believed to have bought 30,000t optional-origin corn—S. Korea bought 60,000t optional-origin feed wheat—
The U.S. corn harvest was pegged at 60% complete versus 43% average (trade was looking for 57% complete)—-Corn crop conditions were steady at 61% good to excellent
The U.S. soybean harvest was 75% complete ahead of 58% average (trade was looking for 79%)
The U.S. winter wheat crop 77% done versus 72% average with the trade looking for 81% done.
Harvest continued last week at a solid clip for most of the U.S. Crop Watch producers. Three more of the 16 subject fields – the corn in North Dakota, Minnesota and Illinois – were completed, and just two fields remain.
The North Dakota corn field was harvested on Oct. 14, scoring a 2 on yield, better than the predicted 1.5. The grower had expected more frost damage from the event that came through in early September, though yields were still below average due to the very wet conditions at planting followed by a dry growing season.
The dry soils in North Dakota along with fewer planted acres have allowed producers there to have a faster-than-normal harvest. Most corn in the area has not had to go through the dryer, which is very rare that far north. The 2018 North Dakota Crop Watch corn was harvested on Dec. 12 of that year, and the 2019 field was finished on March 12, 2020.
The Minnesota corn was picked on Oct. 15 with a yield of 4, below the predicted 4.5, and that has been a theme for most of the grower’s corn harvest. Colder-than-normal conditions persisted for about a month following planting, which reduced the number of ears to a larger degree than expected. Soil compaction following the wet fall of 2019 also clipped yield.
Soils are very dry in Minnesota as well, and the producer has not had to dry any of his harvested corn. The last time he did not have to dry corn was in 2012.
The Illinois corn was completed on Oct. 16 after having been started a few weeks earlier but left to dry a little longer. Yield was 15% above average, scoring a 5 as expected. Most of the corn on his farm this year would also score a 5, but the soybean crop would rate at 3, including the subject field.
The Crop Watch fields in Illinois are side by side and were planted just one day apart. The fields got a bunch of rain in mid-July, which turned out to be too much for the soybeans, before turning dry in August through the end of the growing season. That weather worked out well for the corn but not the beans, which also lost some of the early planting advantage to the cold spring.
The Nebraska producer hopes to harvest his corn field by the end of the week, but 2 inches (51 mm) of snow fell on Sunday, slowing the efforts. Activity is still ahead of normal in the area. The Ohio grower was grounded for most of last week due to wet weather, though he hopes to get moving again on Tuesday.
Fall fieldwork is up to two weeks ahead of normal in Kansas, but there has been just a trace of rain since early September. That is still more favorable than in 2018, which featured the second-wettest October on record for Kansas, but the dry conditions are increasingly concerning for the winter wheat. The producer finished his sorghum harvest over the weekend, and it was solidly above average, though not record.
Conditions are very dry in Iowa, where harvest activity was strong in the latest week. Progress remains a bit ahead of normal, and corn yields have gotten worse as the harvest advances. That is largely due to the Aug. 10 derecho, and fields that did not receive fungicide were particularly hard-hit.
Soybeans around the Indiana fields are nearly complete and corn is about 25% done. Conditions there are so dry that it has sparked some field fires in the area.
Trade estimates for USDA grain export inspections – Reuters News
U.S. weekly grain/soybean export inspections – USDA – Reuters News
WEEK ENDED: 10/15/2020 10/08/2020 10/08/2020 10/17/2019
Prelim. Revised Previous
– Wheat 239,688 514,649 514,086 580,680
– Oats 0 0 0 0
– Barley 0 1,896 1,896 0
– Corn 911,012 838,849 632,184 581,237
– Sorghum 74,655 192 192 21,986
– Soybeans 2,173,521 2,396,908 2,157,012 1,330,909
MARKETING YEAR-TO-DATE INSPECTIONS
Current Year Last Year
– Wheat 10,677,374 10,079,048
– Oats 996 798
– Barley 9,020 8,625
– Corn 5,455,972 3,087,556
– Sorghum 537,631 250,162
– Soybeans 11,518,836 6,493,771
Yesterday’s U.S. weekly export inspections had
—Wheat exports running 6% ahead of a year ago (10% last week) with the USDA currently forecasting a 1% increase on the year
—Corn 77% ahead of a year ago (up 72% last week) with the USDA up 32% for the season
—Soybeans are up 77% on the year (up 76% last week) with the USDA having a 26% increase forecasted on the year
U.S. President Donald Trump is assuring a bumper year for farmers as the Nov. 3 election approaches, with record government subsidies projected to make up more than a third of farm income in 2020; the aid programs could be key to Trump’s chances of success in swing states such as Wisconsin, Ohio, Iowa and Minnesota; such states are hotly contested because their population can swing either to Republicans or Democrats and play a decisive role in presidential elections; farmers favored the Republican president by a wide margin in the 2016 election.
Renewable fuels expansion may renew bull case for Bunge, ADM
Credit Suisse hikes PT on agribusiness cos Bunge and Archer-Daniels-Midland to take into account the probability of stronger vegetable oil values and soybean crush margins on the horizon; hikes PT on BG to $60 from $53 and on ADM to $44 from $39
A new law will allow China to ban exports to protect national security, adding a versatile weapon to Beijing’s arsenal as it fights a war over trade and technology with the U.S.; the law, approved by China’s legislature over the weekend, authorizes tight restrictions on the sale abroad of dual-use goods with both civilian and military applications, nuclear materials and equipment, and other products and services that touch on national security; set to go into effect Dec. 1, the new legislation mirrors regulations the U.S. and other countries use to limit sensitive exports.
Farmers in Brazil have sowed 7.9% of the estimated soy area through Oct. 15, according to a report from consultancy AgRural, more than doubling the area planted last week; but in spite of advancing 4.5 percentage points in the weekly comparison, planting has progressed at the slowest pace in one decade as a drought made sowing riskier at the start of the season, AgRural said.
The sowing of Brazil’s summer corn, in turn, reached 44% of the area in the Center-South region, up from 39% a week earlier; although the work progressed relatively well, persistent dry weather in Rio Grande do Sul and Santa Catarina could cause a drop in corn yields
Selected highlights from a report issued by a U.S. Department of Agriculture attache in Brasilia:
On Oct. 16, Brazil announced that it would suspend the import tariffs on corn, soybeans, soy meal, and soy oil from countries outside the Mercosur trade bloc; the tariff on corn and soy imports from outside Mercosur is currently 8%, 6% for soy meal, and 10% for soy oil; Post anticipates that the decision will be published in the Brazilian Federal Register in the next couple of days and will come into force the same day; the import tariff waiver will apply to soybean and soy products until Jan. 15, 2021, and for corn imports until March 31, 2021; the waiver will apply to all incoming imports with no quota; Post sees several hurdles to substantial imports from the United States due to current price spreads and several regulatory and logistical challenges.
Argentina’s oilseed workers union will hold a 24-hour strike to start late Monday afternoon, affecting the country’s main export hub of Rosario, to press for higher wages after several days of what the labor group called fruitless contract talks.
The Russian union of grain exporters said on Monday that the agriculture ministry is considering creating a state grain fund which would hold enough to cover two to four months of demand from flour millers; Russian wheat consumers have been concerned about recent growth in domestic prices, which hit a record high last week due to rising dollar export prices and a weak rouble.
Russian wheat export prices rose for the third consecutive week last week as Chicago wheat prices increased; Chicago prices were trading close to a six-year high on Monday as dry weather in several leading exporting countries, including Russia, raised concerns about supplies; however, rains over the weekend improved the situation in Russia slightly; Russian wheat with 12.5% protein loading from Black Sea ports and for supply in October was at $251 a ton free on board (FOB) at the end of last week, up $6 from the previous week, agriculture consultancy IKAR said; Sovecon, another Moscow consultancy, said wheat rose by $9 to $248 per ton
Ukraine’s grain exports have fallen to 13.84 million tons so far in the July 2020 to June 2021 season from 16.43 million tons in the same period last year because of much lower corn volumes, the economy ministry said; traders had sold 1.09 million tons of corn as of October 19 compared to 2.94 million tons exported by the same date last year; wheat exports have declined to 9.59 million tons from 10.20 million tons.
Euronext wheat rose to its highest in around two-years on Monday as dry weather in several wheat exporting countries fueled a rally in international prices; December milling wheat unofficially closed up 1.4% or 3.0 euros at 212.00 euros ($249.80) a ton, a new contract high and the highest spot price since August 2018.
Japan’s usage of corn in animal feed rose to 49.8% in August, compared with 48.8% in the year-ago period, preliminary data from the Ministry of Agriculture, Forestry and Fisheries showed
Egypt will not charge sellers of imported wheat fees for sieving and fumigation if dead insects are detected in their cargoes during the sieving process, according to a memo.
Exports of Malaysian palm oil products for October 1 – 20 rose 4.0 percent to 1,076,557 tons from 1,035,041 tons shipped during September 1 – 20, cargo surveyor Intertek Testing Services said
MALAYSIA’S OCT 1-20 PALM OIL EXPORTS SEEN AT 1,084,701 TONNES VERSUS SEPT 1-20 AT 1,040,085 TONNES – AMSPEC MALAYSIABack