Notice that since the emotional response to the tariffs have passed, the reality is that these tariffs should have no impact on AG since China is not buying from US anyway. China will have to come up with a different response to Trump (like corporate warfare targeting things like Apple), or decide to start working toward an agreement.
We are waiting for a chart reversal to buy value.
By ADM Investor Services Research Team
Wheat prices overnight are up roughly 3 cents in the SRW Wheat, up 3 in HRW, and up 1 for HRS; Corn is up 2 cents; Soybeans up 6; Soymeal up $2.50, and; Soyoil up 10 points.
For the week, Winter Wheat prices are down roughly 20 cents for Soft Red Winter, down 13 in the Hard Red Winter, and down 3 for Hard Red Spring; Corn is down 19 cents; Soybeans down 30; Soymeal down $7.00, and; Soyoil down 75 points (crushing margins are up 5 cents at $1.04, oil-share is unchanged at 31%).
Chinese Ag futures (January) settled unchanged in Soybeans, unchanged in Corn, up 13 yuan in Soymeal, up 24 in Soyoil, and up 12 in Palm Oil.
The Malaysian Palm Oil market was down 3 ringgit at 2,061 (basis October) on trade war rhetoric.
The U.S. Midwest weather forecast has below average temps over the next 10 days with less than average rainfall; organized rainfall for the end of next week has been removed.
The U.S. Delta and Southeastern states has much of the region seeing timely showers and thunderstorms during the next week; coverage of significant rain will be erratically distributed, however, and rainfall totals through Wednesday will vary; the erratic nature of the rain will lead to drying in some areas.
The 11 to 16 Day Outlook for the Midwest continues with ridging in the west; the flow of weather across the Midwest will be flat bringing average to above average temps and less than average rainfall for all of the region but, not totally dry weather.
In deliveries, Soymeal totaled 620 lots; Soyoil 611; and; Soybeans 1,218 contracts.
The player sheet had funds net sellers of 9,000 contracts of SRW Wheat; sold 29,000 Corn; net sold 13,000 soybeans; sold 5,000 Soymeal, and; net sold 3,000 lots of Soyoil.
We estimate Managed Money net long 7,000 contracts of SRW Wheat; net long 73,000 Corn; net short 66,000 contracts of Soybeans; net short 44,000 lots of Soymeal, and; net short 44,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 9,500 contracts; HRW Wheat down 40; Corn up 12,700; Soybeans up 4,200 contracts; Soymeal up 2,500 lots, and; Soyoil up 2,800.
There were changes in registrations (Soymeal up 75)—Registrations total ZERO contracts for SRW Wheat; ZERO Oats; Corn 1,251; Soybeans 1,232; Soyoil 3,322 lots; Soymeal 820; Rice 1,036; HRW Wheat 5, and; HRS Wheat 1,176 contracts.
TODAY—–MONTHLY EXPORTS—COMMITMENT OF TRADERS—
In tender activity—–Jordan seeks 120,000t optional-origin wheat—India considers offers for GMO-free corn—S. Korea bought 85,000t U.S. wheat—S. Korea bought 31,700t Canadian wheat—S. Korea bought 69,000t optional-origin corn—Egypt cancels tender for 30,000t optional-origin soyoil, 10,000t sunoil—
U.S. President Donald Trump said on Thursday he would impose an additional 10% tariff on $300 billion worth of Chinese imports starting Sept. 1, as talks aimed at easing tensions between the world’s two largest economies continue; trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country; this does not include the 250 Billion Dollars already Tariffed at 25%; in a string of tweets, Trump also faulted China for not following through on promises to buy more American agricultural products and personally criticized Chinese President Xi Jinping for failing to do more to stem sales of the synthetic opioid fentanyl
—China on Friday said it would not be blackmailed and warned of retaliation after U.S. President Donald Trump vowed to slap a 10% tariff on $300 billion of Chinese imports from next month, sharply escalating a trade row
For the week ended July 25th, U.S. All Wheat sales are running 24% ahead of a year ago, shipments up 27% with the USDA forecasting a 2% increase on the year
U.S. Corn sales are running 16% behind a year ago, shipments 9% behind with the USDA forecasting a 14% decline on the year
U.S. Soybean sales are running 16% behind a year ago, shipments 22% behind with the USDA forecasting a 20% decline on the year
—Soymeal sales 3% behind on the year, shipments 5% behind with a 1% decline forecasted
—Soyoil sales 17% behind a year ago, shipments 17% behind with a 16% decline forecasted
- USDA SAYS 4.73 MILLION TONS (158 MILLION BUSHELS) OF U.S. SOYBEANS CRUSHED IN JUNE
The USDA June soybean crush was 158 mil bu (trade estimate was 159.4 mil bu) versus 165 mil a month ago and 170 mil last year
June soymeal stocks totaled 376,000t versus 276,000t a month ago and 360,000t a year ago
June soyoil stocks totaled 1.974 bil lbs (trade estimate was 1.946 bil lbs) versus 2.019 bil a month ago and 2.305 bil last year
- USDA SAYS 456.6 MILLION BUSHELS OF CORN USED FOR FUEL ALCOHOL IN JUNE, DOWN FROM 462.7 MILLION A YEAR AGO
- USDA SAYS 1.957 MILLION TONS OF DDGS PRODUCED IN JUNE, DOWN FROM 2.021 MILLION A YEAR AGO
The June corn crush for fuel alcohol was 457 mil bu versus 459 mil bu a month ago and 463 mil a year ago
DDG production totaled 1.957 mt versus 1.943 mil tons a month ago and 2.021 mt a year ago
FCStone projected U.S. 2019 corn production at 13.992 billion bushels, with an average yield of 167.4 bushels per acre (bpa)
—The company forecast this year’s U.S. soybean harvest at 3.743 billion bushels, with an average yield of 47.2 bpa.
—The estimates are what the company predicts will be final production, not what its expects the U.S. Department of Agriculture to say in a monthly supply and demand report due Aug. 12.
Wire story reports record-breaking rains continue to vex the agricultural industry, adding hundreds of millions of dollars in costs for grain traders and crop-seed suppliers; millions of corn and soybean acres were left unplanted after continuous springtime storms, leading to product returns and swelling inventories for seed and pesticide makers including Corteva Inc. and Bayer AG.
The U.S. and Japan are working to hammer out a limited trade pact that would pave the way for more U.S. farm exports to Japan, while dropping the threat of U.S. tariffs on Japanese cars; such an accord with Japan would give President Trump a modest win amid diminished expectations for a landmark deal with China and uncertainty over congressional ratification of the administration’s updated deal with Mexico and Canada.
Canadian farmers are likely to reap a smaller canola crop in 2019-20 due to reduced plantings and dry conditions, consultancy FarmLink Marketing Solutions said after a crop tour of the prairie provinces; the Grain World tour on Tuesday and Wednesday visited fields in Alberta, Saskatchewan and Manitoba to observe conditions and calculate yield estimates; dry conditions parched soils across much of the Canadian Prairies for three years, raising fears about this year’s crops surviving, until rains fell in June and July
—estimated an average Canadian canola yield of 39.9 bushels per acre in 2019-20, up slightly from 39.8 bushels a year earlier; the crop may produce 19 million tons, down from 20.3 million a year ago, after farmers planted less
—the crop tour estimated an average Canadian wheat yield, excluding durum, of 52.1 bushels per acre, the same as last year
- CANADA CANOLA YIELD FOR 2019/20 SEEN 39.9 BU/ACRE, OUTPUT 19 MLN TONNES
- CANADA ALL WHEAT EX DURUM YIELD SEEN 52.1 BU/ACRE, OUTPUT 26.9 MLN TONNES
- CANADA DURUM YIELD SEEN 40.8 BU/ACRE, OUTPUT 5.6 MLN TONNES
- CANADA OAT YIELD SEEN 91 BU/ACRE, OUTPUT 4.2 MLN TONNES
- CANADA BARLEY YIELD SEEN 67.6 BU/ACRE, PRODUCTION 9.8 MLN TONNES
China’s soymeal futures 1.6% in early trade on Friday following a U.S. plan to impose tariffs on additional Chinese imports
Brazil’s government published on Thursday export data for the month of July
Commodity July 2019 June 2019 July 2018
ETHANOL (LTR) 206,707,283 169,398,386 180,685,275
SOYBEANS (TNS) 7,820,596 9,066,511 10,198,036
- BRAZIL EXPORTS 7.82 MLN T SOYBEANS IN JULY VS 9.07 MLN T IN JUNE AND 10.20 MLN T YR AGO
- BRAZIL EXPORTS 1.50 MLN T SOY MEAL IN JULY VS 1.53 MLN T IN JUNE AND 1.73 MLN T YR AGO
- BRAZIL EXPORTS 124,500 T SOY OIL IN JULY VS 140,230 T IN JUNE AND 210,904 T YR AGO
- BRAZIL EXPORTS 59,826 T PORK IN JULY VS 55,657 T IN JUNE AND 57,055 T YR AGO
- BRAZIL EXPORTS 129,090 T BEEF IN JULY VS 111,511 T IN JUNE AND 130,887 T YR AGO
- BRAZIL EXPORTS 357,243 T POULTRY IN JULY VS 357,744 T IN JUNE AND 438,562 T YR AGO
- BRAZIL EXPORTS 6,316,629 T CORN IN JULY VS 1,368,783 T IN JUNE AND 1,170,123 T YR AGO
- BRAZIL EXPORTS 206.71 MLN LITERS ETHANOL IN JULY VS 169.40 MLN LTR IN JUNE AND 180.69 MLN LTR YR AGO
Brazilian corn exports hit a monthly high of 6.317 million tons in July, the highest on record since December 2015, according to government data; with a bumper crop estimated at around 100 million tons this season, Brazil is likely to export about 40 million tons of the cereal this year.
—Brazil’s soybean exports fell in July due to weaker demand from the world’s largest importer, China; soybean exports from the world’s largest supplier fell by 23% to 7.82 million tons last month
Ukraine, which expects its 2019 grain crop to be in line with last year’s level of around 70 million tons, had harvested 32.9 million tons of early grains by Aug. 1, the agriculture ministry said; the harvested volume includes 24.1 million tons of wheat and around 7.8 million tons of barley.
The condition of the French grain maize crop, which has faced a heatwave and dry conditions this summer, continued to worsen in the week to July 29, with 61% in good/excellent condition against 67% a week earlier, FranceAgriMer said
—The soft wheat harvest had reached 87% by July 29 against 63% the previous week and 99% by the same stage last year
Australian bulk grain handler GrainCorp Ltd said it expects to report its first loss in a decade in 2019 as it struggles with drought, knocking its shares down by 10%; severe dry weather has threatened grain production across Australia’s east coast, where GrainCorp derives nearly all its income, slashing revenues from crop storage and export; the downgrade comes just a day after pesticides and crop seeds producer Nufarm Ltd cut its annual earnings guidance, citing the drought as a major cause.
India’s federal government is mulling a free one-time distribution of food grains or at a nominal cost of one rupee per kilogram to the poor to help deplete part of the excess stock it carries as buffer, a senior official aware of the development said; the plan is to distribute or sell at nominal cost 20 million metric tons of accumulated stock of food grains to make space for fresh arrival of grains when next harvest season begins in October-November.