TODAY – EXPORT SALES
Wheat prices overnight are down 16 3/4 in SRW, down 12 3/4 in HRW, down 23 3/4 in HRS; Corn is down 14 1/4; Soybeans down 24 3/4; Soymeal down $0.50; Soyoil down 1.09.
For the week so far wheat prices are up 1 1/2 in SRW, up 4 1/2 in HRW, down 43 1/4 in HRS; Corn is up 2; Soybeans down 26 3/4; Soymeal up $0.28; Soyoil down 3.53.
For the month to date wheat prices are up 14 1/2 in SRW, down 3 in HRW, up 24 1/4 in HRS; Corn is down 34 1/4; Soybeans down 34; Soymeal down $12.70; Soyoil down 1.07.
Chinese Ag futures (SEP 21) Soybeans down 33 yuan ; Soymeal down 39; Soyoil down 72; Palm oil down 56; Corn down 5 — Malasyian Palm is down 28. Malaysian palm oil prices overnight were down 28 ringgit (-0.67%) at 4121 on losses in soybean oil and concerns about weaker exports from second-biggest grower Malaysia.
Midwest corn, soybean and winter wheat forecasts: West: Isolated showers north Wednesday-Thursday. Mostly dry Friday. Scattered showers Saturday. Mostly dry Sunday. Temperatures near to above normal through Friday, above normal Saturday-Sunday. East: Isolated showers northwest Wednesday-Thursday. Scattered showers east Friday. Scattered showers Saturday, mostly north. Isolated showers Sunday. Temperatures near to below normal Wednesday-Thursday, near normal Friday, near to above normal Saturday, above normal Sunday. 6 to 10 day outlook: Scattered showers Monday-Friday. Temperatures above normal Monday-Friday.
The player sheet for 7/21 had funds: net buyers of 4,500 contracts of SRW wheat, buyers of 4,000 corn, buyers of 0 soybeans, buyers of 3,000 soymeal, and sellers of 4,000 soyoil.
There were no changes in registrations. Registration total: 0 SRW Wheat contracts; 0 Oats; 0 Corn; 13 Soybeans; 388 Soyoil; 175 Soymeal; 1,288 HRW Wheat.
Preliminary changes in futures Open Interest as of July 21 were: SRW Wheat up 1,573 contracts, HRW Wheat up 4,287, Corn up 430, Soybeans down 1,743, Soymeal up 893, Soyoil down 4,721.
TENDERS
- CORN AUCTION: China will auction 23,488 tonnes of corn imported from Ukraine at an auction on July 23, according to the country’s grain stockpiler Sinograin.
- NO PURCHASE IN WHEAT TENDER: Thailand-based feed producers’ association TFMA is believed to have rejected all offers and made no purchase in an international tender for up to 138,000 tonnes of animal feed wheat which closed on Wednesday
PENDING TENDERS
- WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
- WHEAT TENDER: Bangladesh’s state grains buyer issued another international tender to purchase 50,000 tonnes of milling wheat,
- WHEAT TENDER: The Ethiopian government issued an international tender to buy about 400,000 tonnes of optional-origin milling wheat,
- SOYBEAN TENDER: South Korea’s Agro-Fisheries & Food Trade Corp. issued an international tender to purchase around 7,600 tonnes of soybeans free of genetically modified organisms for arrival between Aug. 20 and Oct. 20. Deadline for price offers is July 21.
- WHEAT TENDER: A government agency in Pakistan has issued an international tender to purchase and import 500,000 tonnes of wheat,
DOE: U.S. Ethanol Stocks Rise 6.5% to 22.518M Bbl
According to the U.S. Department of Energy’s weekly petroleum report.
- Analysts were expecting 21.377 mln bbl
- Plant production at 1.028m b/d, compared to survey avg of 1.042m
- The following compares latest DOE figures to a Bloomberg surveyconducted before the release:
GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report
The USDA is scheduled to release its export sales report on Thursday for week ending July 15.
- Corn est. range 200k – 700k tons, with avg of 408k
- Soybean est. range 100k – 650k tons, with avg of 370k
LIVESTOCK SURVEY: U.S. Cattle on Feed Herd Seen Down 1% Y/y
July 1 herd seen falling y/y to 11.319m, according to a Bloomberg survey of eight analysts.
- Marketings seen rising 2.2% y/y
- June placements seen down 6% y/y
India Corn and Rice Export Estimates for 2020-21 Raised by U.S.
USDA’s Foreign Agricultural Service raised its estimate for Indian corn exports in market year 2020-21 to 2.8m metric tons, based on India’s official estimates.
- NOTE: USDA’s official corn-export forecast is 1.8m
- The USDA attache in New Delhi also lifted its estimate for Indian rice exports in the same time period to 19m tons because of India’s “competitive export prices,” according to a statement posted on the U.S. agency’s website
- India’s recent record harvests and government procurement of rice and wheat led to the “ballooning of government grain stocks” to a record high of 109m tons in June: USDA
- The report also noted that progress of monsoon in the second and third week of July “is critical for rainfed coarse grains, pulses, and oilseeds, that go largely unirrigated”
Canadian crop debacle may force a reroute of wheat, canola trade
Severe drought has slashed expected U.S. spring wheat output to a three-decade low and across the border on the Canadian Prairies, crops are in similarly tough shape. With little relief in sight, production forecasts should fall, and other global export markets will likely have to pick up Canada’s slack.
A significant amount of Canada’s annual wheat and canola output go to exports, and those products are important on the world stage. Top customer China is among those that may need to seek supplies elsewhere, and trade rival Australia could be a good candidate to help fill that gap.
Brazil 2021/2022 soy output seen at 144.7 mln T, up 6%, as area expands – Pátria Agronegócios
- BRAZIL’S 2021/2022 SOYBEAN PRODUCTION ESTIMATED AT 144.7 MILLION TNS, UP 6% FROM PREVIOUS CYCLE – PÁTRIA AGRONEGÓCIOS
- BRAZIL’S 2021/2022 SOYBEAN PLANTED AREA SEEN GROWING BY 6.7% TO 40.85 MILLION HECTARES – PÁTRICA AGRONEGÓCIOS
Devaluation of live pig reduces purchase power of Brazilian pig farmers
The steep price drops for live pig in the Brazilian independent market in early July reduced the purchase power of pig farmers against the major inputs consumed in the activity: corn and soybean meal. This decrease in the month average (until July 20) interrupted the recovery of farmers’ purchase power, which had been observed since June.
LIVESTOCK SURVEY: U.S. Cattle Herd Seen at 101.8 Million Head
The U.S. cattle herd as of July 1 seen falling by 443,000 head from the same time a year ago, according to the avg in a Bloomberg survey of three analysts.
- That would be another year-over-year decline after falling by 0.2% in Jan.
- Beef cows seen down 342,000 head, while milk cows seen rising by 90,000
2021/22 ARGENTINA WHEAT PRODUCTION: 20.8 [18.9–22.6] MILLION TONS, UP <1% FROM LAST UPDATE
Rapid planting pace and healthy soil moisture throughout core areas of the Pampas fractionally increase 2021/22 Argentina wheat production to 20.8 [18.9–22.6] million tons. In July’s WASDE (12 July) USDA placed Argentina wheat production at 20.5 million tons, unchanged from its last update. Our current estimate puts planted area at 6.8 million hectares, up 1.4% from last season, largely in line with 6.5 and 6.8 million hectares reported by Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario, respectively.
Plantings are nationally 93% complete according to the Ministry of Agriculture, and 96% complete according to Bolsa de Cereales in Buenos Aires, ahead of last year’s 90% and the five-year average of 88%. The August-October outlook by Refinitiv Weather Research is currently favoring higher confidence for cool/wet weather across Argentina’s major crop regions. If materialized, barring excessive wetness or frost events, Argentina should see new record highs in wheat yield.
India Corn and Rice Export Estimates for 2020-21 Raised by U.S.
USDA’s Foreign Agricultural Service raised its estimate for Indian corn exports in market year 2020-21 to 2.8m metric tons, based on India’s official estimates.
- NOTE: USDA’s official corn-export forecast is 1.8m
- The USDA attache in New Delhi also lifted its estimate for Indian rice exports in the same time period to 19m tons because of India’s “competitive export prices,” according to a statement posted on the U.S. agency’s website
- India’s recent record harvests and government procurement of rice and wheat led to the “ballooning of government grain stocks” to a record high of 109m tons in June: USDA
- The report also noted that progress of monsoon in the second and third week of July “is critical for rainfed coarse grains, pulses, and oilseeds, that go largely unirrigated”
USDA FAS Sees EU Wheat Crop Topping Estimate; May Rise Further
EU wheat production in the 2021-22 season is now seen at 138.4m tons, above an official USDA estimate of 138.2m tons, the agency’s Foreign Agricultural Service said in a report posted this week.
- Sizable crops expected across the EU’s leading producers, especially Romania and Bulgaria
- Some fields suffered from thunderstorms and hail in June, but damage wasn’t widespread
- Output estimate may rise further if there are no July heatwaves
- Exports seen at 33.4m tons, below the official USDA estimate of 34m tons
- Due to problems with Brazil’s second-crop corn, EU feed-grain consumers are expected to rely more heavily on domestic grain supply and intra-bloc trade at start of the season
- If Ukraine’s grain harvest ends up as expected, shipments from the country “could help to ease” tightness in the EU grain market from the fourth quarter
France’s Rouen Grain Exports Double in Week to July 21: Port
Grain shipments from France’s Rouen port totaled 65,529 tons in the week to July 21, compared with 27,702 tons a week earlier, according to an emailed report.
- Loadings by destination (in tons):
- Feed barley
- China 43,054
- Morocco 6,600
- Soft wheat
- Gabon 12,700
- Durum wheat
- U.K. 3,175
China Expects Henan Floods to Have Only Minor Impact on Corn
Persistent rainfall in the central province of Henan has flooded some corn fields and damaged a small amount of crops, but the overall impact on production is “not significant,” the National Meteorological Center said.
- Acreage affected accounts for just 12% of total area sown in Henan
- A small amount of corn was flattened as the plant height was low
- Heavy rain in most parts of Henan will end in the next 3 days
- All localities are urged to drain water from the flooded corn and peanut fields and promote recovery of crops
- High humidity after the rain is conducive for pest outbreaks and the situation should be monitored closely
Rainfall, Floods in China Henan Cause 542.3m Yuan Loss in Crops
Heavy rainfall and floods in central China’s Henan province starting July 16 have damaged 75,000 hectares of crops, according to a briefing by the provincial government Wednesday.
- The rainstorm has affected 1.24m people and 164,710 people have been relocated
- Food supply in Zhengzhou, the provincial capital worst-hit by the disaster, is ample and prices stable: city official
- Heavy rainfall is expected in parts of Henan on Thursday, including Zhengzhou, according to an official with provincial meteorological service
Kazakh Grain Union Urges Delay on Work to Limit Grain Exports
The Kazakh Grain Union called for the government to stop until Aug. 15 work on plans to restrict grain shipments, it said in a statement on its website.
- Proposes for a group to be formed under the agriculture ministry with representatives from the industry in response to the export plans
- Said any measures to regulate the market should take place 30 days after the industry is notified
- READ: Kazakhs to Limit Soft Wheat, Forage Exports in Aug.: APK-Inform
- The country’s soft-wheat output is seen at 10.6m tons in the 2021-22 season, down from 12m tons a year earlier
- Pegs harvest area at 11.4m ha with an average yield at 10.4 centners/ha
- Imports of Russian wheat seen rising to 2m tons in 2021-22, up from 1.1m tons a year earlier
- NOTE: Kazakhstan’s grain belt received some rain this month, after being hit by drought since April, according to the USDA
Soy Oil Traders Jostle to Decipher Argentine Export Potential
- Biodiesel tweak may boost shipments from world’s top supplier
- Move could ease concerns about global vegetable oil shortages
Traders dealing in vegetable oil are scurrying to get a read on expectations that the world’s biggest supplier of soybean oil could ramp upexports by almost 10%.
Argentina’s biofuels industry anticipates an additional 500,000 metric tons of soy oil being freed up for export after the South American nation approved a new law last week that cut the blend mandate in diesel fuel in half. That could impact the global market and Argentina, which shipped 5.36 million tons of the soybean extract last year:
- The shift could lead to lower soy oil prices, according to Terry Reilly, senior commodities analyst at Futures International LLC in Chicago. Contracts for December delivery are already down about 4% this week. Lower prices would benefit India, Argentina’s biggest customer
- There’ll now be fewer concerns about global vegetable oil shortages as a drought cripples Canada’s canola crop and food demand increases, said John Baize, an independent analyst who advises the U.S. Soybean Export Council
- The move will increase Argentina’s soy oil exports by about 8% annually, predicts Rich Nelson, chief strategist at Allendale Inc. in Illinois. “Combined with expectations for increased palm oil next year, it will add to the perception of lower prices in 2022,” Nelson said in an email, adding that he doesn’t see a near-term impact on U.S. pricing
There’s one caveat: Argentina hasn’t complied with the old 10% biodiesel mandate in the last 18 months, according to Claudio Molina, head of the Argentine Association of Biofuels and Hydrogen. Blending has averaged out at 4% as manufacturers struggle to be profitable amid a commodities rally and high inflation. The government also temporarily cut the mandate in the first quarter to ease pressure on fuel prices.
Romanian 2021 Wheat Output Could Reach a Record 12m Tons: ZF
Romania’s wheat production could reach a record-high this year of 12 million tons as the first estimates show a good-quality harvest, Ziarul Financiar reports, citing preliminary data from the agriculture ministry.
- The value of the production is estimated at over 2.3 billion euros ($2.71 billion) with the best harvest seen in the west of the country
Vancouver Port Grain Deliveries Slump in Early July on Wildfires
The number of rail cars unloading grain at the Port of Vancouver in the first week of July fell 77% below the same period a year ago as wildfires hindered movement, a report showed Wednesday.
- In week 49 of the 2020-21 marketing year, the number of rail cars unloading grain at the Vancouver port was 62% below the four-week average, grain transportation monitoring company Quorum Corp. says in weekly report
- Extreme heat and wildfires throughout British Columbia have caused ongoing rail line outages, significantly impacting volume at Vancouver terminals since week 48
- Stocks at elevators in Western Canada rose to 58% of working capacity vs 57% the week prior
- Grain stocks at Western Canada terminal elevators dropped to 48% working capacity vs 53% the previous week
- NOTE: Vancouver Port Operations Back to Normal After Rail Halt: Hapag
Four Ukrainian ports restrict grain operations due to poor weather
Four major Ukrainian Black Sea ports have restricted grain loading operations due to poor weather, the state seaport authority said on Thursday. The restrictions applied to the ports of Odessa, Chornomorsk, Mykolayiv and Pivdeny, the authority said without elaborating.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
Latest News & Market Commentary
ADM & Industry News
Cocoa Market Remains Weather Sensitive
September 6, 2024
Crude Oil Subdued Reaction to Jobs Data
September 6, 2024