Video and AM comments 082719

Our weekly video shows you Supply Demand updates, GDU’s needed to mature the crop, Aerial pictures coming in from the eastern leg,  a low cost hedge against insurance payout decline if there is a price rally. Low cost option ownership. Looking at some 2020 hedges and how to lock in a great storage carry on beans … just in case this pod count does not improve like we hope it will.



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By ADM Investor Services Research Team



Wheat prices overnight are down roughly 1 cent in the SRW Wheat, down 1 in HRW, and up 1 for HRS; Corn is down 1 cent; Soybeans down 7; Soymeal down $2.00, and; Soyoil down 20 points.


Chinese Ag futures (January) settled up 10 yuan in Soybeans, down 13 in Corn, down 25 in Soymeal, down 54 in Soyoil, and down 32 in Palm Oil.


The Malaysian Palm Oil market was down 29 ringgit at 2,240 (basis November) on ideas of slower India demand if they raise import taxes.


The U.S. Midwest weather forecast continues with close to average rainfall over the majority of the Midwest continuing the next 10 days; there is some difference in the models for the week with the GFS model wetter; next week has the models agreeing with rains favoring the north—temps look to continue to be running average to below average with no cold air threats seen.


The 11 to 16 Day Outlook has below average temps and close to average precip in all of the Midwest; close to average temps and average to below average precip is seen in the Plains.


The player sheet had funds net even in SRW Wheat; net sold 1,000 Corn; bought 7,000 soybeans; bought 3,000 lots of Soymeal, and; net sold 2,000 Soyoil.


We estimate Managed Money net long 9,000 contracts of SRW Wheat; net short 59,000 Corn; net short 75,000 contracts of Soybeans; net short 39,000 lots of Soymeal, and; net even in Soyoil.


Preliminary Open Interest saw SRW Wheat futures down roughly 6,600 contracts; HRW Wheat down 2,300; Corn down 14,900; Soybeans down 995 contracts; Soymeal down 2,200 lots, and; Soyoil down 120.


There were no changes in registrations—Registrations total ZERO contracts for SRW Wheat; ZERO Oats; Corn 1,251; Soybeans 702; Soyoil 1,879 lots; Soymeal 813; Rice 1,036; HRW Wheat 5, and; HRS Wheat 1,176 contracts.





In tender activity—-Egypt seeks optional-origin wheat—S. Korea seeks 30,000t U.S./Canadian wheat—


U.S. Winter Wheat harvested was 96% (trade estimate was 97%) versus 93% last week, 100% a year ago, 99% average.


U.S. Spring Wheat harvested was 38% (trade estimate was 29%) versus 16% last week, 75% a year ago, 65% average. Spring Wheat was rated 69% good to excellent (trade estimate was 70%) versus 70% last week, and 74% average


U.S. Corn denting was 27% versus 15% a week ago, 59% last year, and 46% average. Corn was rated 57% good to excellent (trade estimate was 57%) versus 56% last week, and 68% a year ago.


U.S. Oats harvested was 75% versus 60% a week ago, 88% last year, and 86% average.


Soybeans setting pods was 79% versus 68% a week ago, 94% last year, and 91% average. Soybeans were rated 55% good to excellent (trade estimate was 54%) versus 53% a week ago, and 66% a year ago.


Plentiful rain in most of the U.S. Crop Watch locations last week boosted expectations for corn yield to the highest levels of the season, though the prediction calls for just slightly above average results; the week ahead looks drier for most of the Crop Watch locations, which should be fine, but the temperatures will be a little cooler than is ideal, especially in northern areas that need heat to push the crops to the finish; however, the week should contain good stretches of much-needed sunshine.



The North Dakota producer left scores unchanged this week: corn condition 2.5, corn yield 2, soybean condition 3, and soybean yield 2.5. The fields received about 1 inch (25 mm) of rain over the weekend, which was beneficial for soybeans. However, the producer is growing concerned over whether the corn crop can finish. Cooler-than-normal temperatures have prevailed in North Dakota for much of the summer, and the near-term forecast does not contain much heat.



The Minnesota grower raised corn yield to 3.75 from 3.5 last week, but he left all other scores unchanged: corn condition 4.25, soybean condition 4.75, and soybean yield 4. More rain is needed as the fields received up to 0.2 inch (5 mm) of rain last week. The producer would prefer the temperatures to be a little warmer than is forecast, since his crops need until late September to reach full yield potential. The corn and soybeans on his farm were planted mostly on time.



The Nebraska grower increased corn yield to 4 from 3.5 but left all other scores unchanged: corn condition at 4, soybean condition at 4, and soybean yield at 3.5. The corn got 0.4 inch (10 mm) of rain last week and the soybeans got 0.7 inch (17.5 mm), and the forecast is for another 0.5 inch (13 mm) this week. The rain has bolstered crop expectations after several weeks of too-dry conditions, but now the producer would prefer slightly warmer temperatures than are predicted.



All scores remain the same as last week: soybean condition and yield at 3 and corn condition and yield at 2.5. The fields got 2.75 inches (69 mm) of rain last week, which could boost soybean potential, but will likely have little impact on corn, which is up to 12 days from maturity or black layer. The fields are OK on rain for now, but a little more would not hurt. Overly hot temperatures early last week gave way to cooler ones later on, and the milder, more favorable conditions look to continue this week.



The Iowa producer increased corn conditions to 4 from 3.75 last week, but he left all other scores unchanged: corn yield and soybean condition both at 4, and soybean yield at 3.5. The fields got 2 inches (51 mm) of rain last week and another 1.5 inches (38 mm) overnight into Monday, which is especially favorable for pod fill in the soybeans. The producer does not mind the upcoming cooler temperatures but notes the crops really need some sunshine to finish.



The Illinois grower raised corn yield to 3.5 from 2.75 and soybean yield to 3.5 from 3.25. Corn and soybean conditions remain at 4 and 3.75, respectively. The fields got 1.3 inches (33 mm) of rain last week and the mild temperatures all summer have boosted crop expectations to slightly above average after a very wet and frustrating start. The producer has also noticed that because of the favorable summer weather, the replanted part of the corn field has just as much, if not more, potential than the original planted corn.



The Indiana grower left ratings unchanged this week: corn condition and yield at 2.25 and soybean condition and yield at 2.75. The fields received more than 2 inches (51 mm) of rain last week, and that was after a prolonged dry stretch that may have permanently limited yields. However, the Indiana soybean field was the final Crop Watch field planted on June 14, so the plentiful rain should help the filling of pods.



The Ohio grower left all scores the same as the previous week: corn condition 3.75, corn yield 3.5, soybean condition 3.5, and soybean yield 2.75. About 0.5 inch (13 mm) of rain fell last week, and the milder temperatures were very favorable after a streak of hotter weather that nicked the crops. More rain is in the forecast, which is ideal. Corn is about two to three weeks from black layer and the soybeans continue to add pods at a slow pace.


Yesterday’s U.S. weekly export inspections had

—Wheat exports running 24% ahead of a year ago (25% last week) with the USDA currently forecasting a 4% increase on the year

—Corn 17% behind a year ago (16% last week) with the USDA down 14% for the season

—Soybeans 20% behind a year ago (20% last week) with the USDA having a 20% decline forecasted on the year


Despite saying earlier this month that Chinese agriculture buyers can no longer purchase goods from the US — a punitive move in reaction to new tariffs announced by President Trump — the USDA is still recording data showing that soybeans destined for China are still being inspected en masse before being exported; according to the USDA’s grain export sales data report, China is the final destination for the roughly 613,000 metric tons of soybeans expected to be shipped by the US this week


Despite being caught in the middle of the US-China trade war, farmers have remained some of President Trump’s most stalwart supporters–though a Farm Journal survey suggests that’s starting to ebb; about 71% of 1,153 farmers queried in August said they either somewhat or strongly approved of Trump’s performance, versus 79% in July


A big surplus of U.S. biofuel blending credits would likely blunt potential price increases in the market if the Trump administration follows through on its proposal to boost blending volumes mandates; prices for the credits known as Renewable Identification Numbers, or RINs, tanked this month after the Environmental Protection Agency decided to grant 31 biofuel waivers to oil refiners, exempting them from their obligation to blend ethanol into their gasoline; the administration has since sought to quell anger over the waivers in the agricultural industry and is considering boosting next year’s blending volumes mandates to compensate for the impact of the waivers.


Chinese pork meat imports are projected to sharply rise from 2.1 million tons in 2018 to 3.3 million tons in 2019 and 4.2 million tons in 2020, because of the African swine fever outbreak, consultancy INTL FCStone said; estimated that China’s pork meat production will fall to 38 million tons in 2019 from 54 million tons in 2018; it expects the production to fall further to 34 million tons in 2020, as the country will continue to struggle to control the devastating disease.


Countries like Ireland and France “overreact” when they link the recent fires ravaging the Amazon rainforest to the final approval of a trade agreement between the European Union and Mercosur bloc, Brazil Agriculture Minister told reporters; she hoped Brazil’s farm products do not suffer any trade embargos due to environmental issues.


Beijing’s additional 5% tariff on US soybeans not only hurts farmers in the US Midwest, but has the potential to worsen deforestation in the Amazon rainforest; China’s tariffs and desire to diversify away from US farmers has spurred an investment surge in Brazil’s agribusiness sector, which is focused on expanding the arable land of the Cerrado savanna, where more than half of Brazil’s soy is grown; historically, the expansion of Brazil’s arable land has come at the expense of the rainforest and China’s rising dependence on Brazil’s soy could slow progress in ending deforestation.


Export prices for Russian wheat fell last week due to a decline in Chicago grain futures, a global benchmark for the market, and stiff competition with other producers, analysts said; Black Sea prices for wheat with 12.5% protein content fell $3 to $190 a ton on a free on board (FOB) basis by the end of last week, Russian agricultural consultancy IKAR said; SovEcon, another Moscow consultancy, pegged wheat at $191 a ton, down $2.


Ukrainian grain exports from sea ports during the week of Aug. 17-23 remained at a high level of around 1.4 million tons, preliminary data from APK-Inform consultancy showed; wheat exports rose to 1.16 million tons from 1.09 million tons the previous week, while barley shipments fell to 181,000 tons from 261,000 tons


Ukraine has exported 5.3 million tons of sunoil so far in the 2018/19 September-August season, analyst APK-Inform said; sunoil exports totaled 4.82 million tons in the same period in 2017/18


The European Union’s crop monitoring service, MARS, on Monday cut its forecast for EU maize and sugar beet yields this year, citing damage from hot and dry weather in western and northern-central Europe; maize (corn) and sugar beet, mostly harvested in the autumn, have endured record-breaking temperatures together with drought conditions in June and late July in many parts of the bloc; at EU level, the overall yield outlook for grain maize has fallen by almost 2%, mainly due to substantial downward revisions for France, Italy and Poland; MARS cut its forecast for the EU 2019 maize yield to 7.93 tons per hectare (t/ha) from 8.08 t/ha forecast last month; that would be 5% below last year but still 4.1% above the average of the past five years.


South Africa’s 2019 maize harvest forecast is expected to be 4% lower than July’s estimate after delayed plantings and lower grades from the Free State and North West provinces curbed yields, a Reuters survey showed; the government’s Crop Estimates Committee (CEC) is expected to peg the harvest at 10.56 million tons, lower than its July estimate of 10.97 million tons.


India’s trade ministry has recommended raising the tax on refined palm oil imports from Malaysia to 50% from 45% to curb cheaper purchases of the commodity, a government document said; the ministry has recommended raising the import tax for six months; India currently imposes a 40% import tax on crude palm oil (CPO) and 50% on refined palm oils; but shipments of refined palm oils from Malaysia have since January been taxed at 45%, under an agreement with Malaysia.


Malaysia’s palm-oil exports during the Aug. 1-25 period are estimated to have risen 19.9% on month to 1,379,471 metric tons, cargo surveyor SGS (Malaysia) Bhd. said