ADMIS AM Commentary 072919

By ADM Investor Services Research Team

Wheat prices overnight are up roughly 6 cents in the SRW Wheat, up 5 in HRW, and up 1 for HRS; Corn is up 3 cent; Soybeans up 3; Soymeal up $2.00, and; Soyoil unchanged.

For the week, Winter Wheat prices were down roughly 9 cents for Soft Red Winter, down 9 in the Hard Red Winter, and down 6 for Hard Red Spring; Corn was down 11 cents; Soybeans down 18; Soymeal down $8.00, and; Soyoil up 45 points (crushing margins were up 6 cents at $0.99, oil-share was unchanged at 31%).

Chinese Ag futures (September) settled up 8 yuan in Soybeans, up 8 in Corn, down 3 in Soymeal, up 46 in Soyoil, and up 34 in Palm Oil.

The Malaysian Palm Oil market was down 6 ringgit at 2,061 (basis October) at midsession.

The U.S. Midwest weather forecast calls for below average temps over the next week to ten days; a cold front finishes up moving through the region today with less than .50”; the rest of the week looks dry and for the weekend; a front is seen again next Tuesday/Wednesday bringing rain chances to the region.

The Southern U.S. Plains has things mainly dry over the next 10 days.

The Northern U.S. Plains looks to have close to average precip with temps running average to below in the far east and average to above in the west.

The 11 to 16 Day Outlook for the Midwest is mixed with the European model seeing weak ridging causing below average precip and above average temps; the GFS model has the ridge out west offering average to below average precip and below average temps.

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

We estimate Managed Money net long 19,000 contracts of SRW Wheat; net long 126,000 Corn; net short 42,000 contracts of Soybeans; net short 35,000 lots of Soymeal, and; net short 31,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures down roughly 2,500 contracts; HRW Wheat up 755; Corn up 485; Soybeans down 19,600 contracts; Soymeal down 2,600 lots, and; Soyoil up 2,800.

There were no changes in registrations—Registrations total ZERO contracts for SRW Wheat; ZERO Oats; Corn 1,251; Soybeans 10; Soyoil 3,322 lots; Soymeal 745; Rice 1,036; HRW Wheat 5, and; HRS Wheat 1,176 contracts.

TODAY—–EXPORT INSPECTIONS—CROP PROGRESS/CONDITIONS—

In tender activity—Algeria seeks 50,000t optional-origin wheat—S. Korea bought 51,000t optional-origin corn—Egypt seeks optional-origin soy, sunoil—

President Trump took aim at China again ahead of trade talks in Shanghai next week, pressing the World Trade Organization to change how it defines developing countries — which he says gives China and other countries an unfair advantage; “The WTO is BROKEN when the world’s RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment. NO more!!!” Mr. Trump wrote in a tweet; “Today I directed the U.S. Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA!”

Millions of tons of American soybeans have been shipped out to China, the latest progress in the purchase of U.S. agricultural products by Chinese enterprises after a June meeting of the two heads of state in Osaka, official sources said Sunday; meanwhile, the U.S. administration has announced the exemption of additional tariffs imposed on 110 items of Chinese industrial products and expressed its willingness to prompt the U.S. businesses to continue providing supplies for related Chinese enterprises.

The U.S. ethanol industry is about to break under the weight of the Trump Administration’s trade war with China and the surge in the number of small refineries exempted from the nation’s biofuel laws, said CEO of Green Plains; the U.S. ethanol industry was preparing for growth in recent years, but the momentum has stalled in the face of President Donald Trump’s trade war with China, a major buyer, and his administration’s decision to align itself with the oil industry on demand-cutting waivers from biofuel laws.

‘Oil World’

Vegetable Oil Prices Have Started to Recover

Global production deficit projected for 2019/20

—Our forecast of world soybean production has been reduced for 2019/20, down from a month and from a year earlier

—In China we now estimate soybean crushings in Oct/Sept 2018/19 at a 3-year low

—Tight rapeseed supplies in the EU-28 and in China will contrast with burdensome supplies in

Canada in 2019/20

—In 2019/20 we expect a slowdown of the growth in world production of palm oil

—A further reduction of the production growth of 8 oils next season will require adjustments of consumption

—In 2019/20 diminishing growth in output of seven other oilmeals is likely to contrast with a pronounced recovery of soya meal production

—Following a setback of 3.2 Mn T this season, we forecast world consumption of soya meal to recover in 2019/20

Total 2019-crop wheat quantity outstanding into the government’s 9-month price support loan program are 1.182 million bushels, an increase of 0.684 million bushels during the week ended Jly 22

—Total 2018-crop corn quantity outstanding was 331.612 million bushels, a decrease of 32.774 million bushels during the week ended Jly 22

—Total 2018-crop soybean quantity outstanding into the government’s 9-month price support loan program 92.945 million bushels, a decrease of 6.425 million bushels during the week ended Jly 22

Accuweather’s Chief Weighs In on Sea Levels, the Corn Crop, and Wildfires in the West

Barron’s: What’s the weather forecast for the foreseeable future and how might it affect the markets?

Joel Myers: Obviously, all the rain in the Midwest has affected the corn and soybean crops so prices are somewhat elevated. This year, we were well ahead of the USDA in cutting our estimate of the corn crop size. They’re still too high at 13.88 billion bushels of corn. We’re at 13.03 billion.

On soybeans, we’re practically the same. In the Great Lakes, Midwest and Northeast, we expect a lot of rain in late September and October and an incursion of cold air in October that could cause frost earlier than usual. To get the full yield they want the cold and rain to hold off, but in Missouri, illinois, Indiana, Iowa, where the heart of the growing is done, that will not happen.

CHINA SELLS 1,000 TONNES OF SOYBEAN, OR 0.73% OF TOTAL OFFER, AT AUCTION OF STATE RESERVES – TRADE CENTRE; AVERAGE SELLING PRICE OF SOYBEAN IS 3,000 YUAN PER TONNE – TRADE CENTRE

China has approved wheat imports from the Russian region of Kurgan, the Chinese customs office said on Friday, bringing Russia a step closer to its goal of dramatically increasing grain exports; it also approved soybean imports from all parts of Russia, the General Administration of Customs said in a separate statement on its website, having all but halted U.S. soy imports as the trade dispute between Beijing and Washington deepened.

China’s duck farmers cash in as disease slashes pork output

Demand grows for duck meat as alternative to pork
Farmers boost output as both prices, costs rise
Rapid expansion has risks when pork output recovers

Argentine wheat farmers are preparing for a record harvest, even as global rivals see crop yield prospects cut amid floods in the United States, searing heat in Europe and drought in Australia; the country’s grains exchanges and analysts predict a wheat harvest of around 21-22 million tons, beating the previous season’s record 19 million tons of the crop; Argentina’s share of global wheat exports is forecast to grow to 7.7% in the 2019/20 season, an eight-year high, USDA data shows; Russia, meanwhile, will see its share hit a three-year low and Australia will post its second lowest in 12 years.

Russia’s IKAR agriculture consultancy said on Monday it had raised its forecast for the country’s 2019 wheat crop to 76.4 million tons from 76.1 million tons.

Ukrainian grain exports from sea ports during the week of July 20-26 decreased to 724,000 tons from 970,000 tons a week earlier due to a smaller corn shipments, preliminary data from APK-Inform consultancy showed; corn exports fell to 79,000 tons from 405,000 tons the previous week, while wheat shipments increased to 392,000 tons from 390,000 tons.

Ukraine, the world’s largest exporter of sunflower oil, has exported 5.02 million tons of the commodity so far in the 2018/19 season which runs from September to August, analyst APK-Inform said; sunoil exports totaled 4.47 million tons in the same period in 2017/18.

Consultancy Strategie Grains has cut its monthly forecast of the 2019 rapeseed harvest in the European Union to 17.40 million tons from 17.81 million a month ago; that compares with an estimated 2018 crop of 19.95 million tons.

France should harvest between 38 and 39 million tons of soft wheat this summer with quality levels meeting export standards, Soufflet, one of the country’s largest grain exporters, said; market estimates for the French 2019 soft wheat crop was at around 38 million tons about a week ago; the farm ministry forecast 37 million tons early this month; France harvested 34 million tons of soft wheat last year.