Global Ag News for July 27th
USDA CROP PROGRESS: Corn Conditions 64% G/E, Soybeans 58%
Wheat prices overnight are down 1 1/2 in SRW, up 1 1/2 in HRW, up 7 1/2 in HRS; Corn is up 6 3/4; Soybeans up 15 3/4; Soymeal up $0.50; Soyoil up 0.10.
For the week so far wheat prices are down 8 1/2 in SRW, down 5 1/2 in HRW, up 2 3/4 in HRS; Corn is up 10 3/4; Soybeans up 21 3/4; Soymeal up $0.39; Soyoil up 0.94.
For the month to date wheat prices are down 4 in SRW, down 18 1/2 in HRW, up 36 1/2 in HRS; Corn is down 35; Soybeans down 25 1/2; Soymeal down $21.60; Soyoil up 1.41.
Chinese Ag futures (SEP 21) Soybeans up 31 yuan ; Soymeal down 6; Soyoil up 170; Palm oil up 192; Corn up 17 — Malasyian Palm is up 38. Malaysian palm oil prices overnight were up 38 ringgit (+0.87%) at 4421 extending to the highest level in two months amid signs of sustained weakness in Malaysia’s production.
Midwest corn, soybean and winter wheat forecasts: West: Scattered showers north through Wednesday. Isolated showers south Thursday-Friday. Temperatures near to above normal Monday, above normal Tuesday-Thursday, near normal Friday. East: Scattered showers north Monday-Tuesday. Isolated showers Wednesday. Scattered showers Thursday, southwest Friday. Temperatures above normal through Thursday, near normal Friday. 6 to 10 day outlook: Scattered showers Saturday-Sunday. Mostly dry Monday-Tuesday. Scattered showers Wednesday. Temperatures near normal Saturday, near to below normal Sunday-Wednesday.
The player sheet for 7/26 had funds: net sellers of 5,000 contracts of SRW wheat, buyers of 2,500 corn, sellers of 6,500 soybeans, sellers of 1,000 soymeal, and buyers of 4,000 soyoil.
Preliminary changes in futures Open Interest as of July 26 were: SRW Wheat up 142 contracts, HRW Wheat down 142, Corn down 4,144, Soybeans down 7,631, Soymeal down 697, Soyoil down 5,661.
There were no changes in registrations. Registration total: 0 SRW Wheat contracts; 0 Oats; 0 Corn; 0 Soybeans; 388 Soyoil; 175 Soymeal; 1,288 HRW Wheat.
- WHEAT TENDER: Egypt’s General Authority for Supply Commodities (GASC) set a tender to buy an unspecified amount of wheat from global suppliers for shipment from Sept. 20-30 for payment using 180-day letters of credit.
- 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
- WHEAT TENDER: A government agency in Pakistan has issued an international tender to purchase and import 500,000 tonnes of wheat
- WHEAT TENDER: Turkish Grain Board is seeking to buy 395,000 tons of red milling wheat in a tender that closes Aug. 4
- WHEAT TENDER: Egypt’s state import agency said late Monday that it is seeking to buy an unspecified amount of wheat for delivery between Sept. 20 and Sept. 30.
USDA CROP PROGRESS: Corn Conditions 64% G/E, Soybeans 58%
Highlights from the report:
- Corn 64% G/E vs 65% last week, and 72% a year ago
- Corn dough 18% vs 8% last week, and 20% a year ago
- Corn silking 79% vs 56% last week, and 79% a year ago
- Soybeans 58% G/E vs 60% last week, and 72% a year ago
- Soybeans blooming 76% G/E vs 63% last week, and 74% a year ago
- Spring wheat 9% G/E vs 11% last week, and 70% a year ago
- Spring wheat harvest 3% G/E vs 1% a year ago
- Winter wheat harvest 84% vs 73% last week, and 80% a year ago
- Cotton 61% G/E vs 60% last week, and 49% a year ago
- Sorghum 66% G/E vs 68% last week, and 53% a year ago
U.S. Inspected 1.037m Tons of Corn for Export, 242k of Soybean
In week ending July 22, according to the USDA’s weekly inspections report.
- Soybeans: 242k tons vs 144k the previous wk, 505k a yr ago
- Wheat: 478k tons vs 533k the previous wk, 544k a yr ago
- Corn: 1,037k tons vs 1,077k the previous wk, 841k a yr ago
Argentina 2021-22 Soy Planting Seen Falling by 1.5%: Rosario
Soybean planting is forecast to fall y/y to 16.7m hectares (41.3m acres), the lowest in 15 years, as farmers continue to swap beans out for other crops, especially corn, the Rosario Board of Trade says in a reportwith preliminary estimates for next season.
- “The tendency seen in the last few years for crop participation is here to stay. Corn and wheat grow year after year while the queen of Argentine farms, soy, loses ground.”
- Argentine soy, which starts getting planted in October, could see 2022 production increase 9.1% from the last drought-hit season to 49m metric tons
- Corn planting seen expanding 4.6% y/y to 7.7m hectares
- Wheat production may jump 19% y/y to 20.2m tons
Brazil corn exports slumped along with production losses while Argentina exports stayed high
2020/21 Brazil corn export season started at the slowest pace over the past six years. According to Refinitiv trade flows, Brazil shipped only 89 thousand tons of corn in June. In July, 1.5 million tons of corn were delivered as of 21 July, compared to 3.1 million tons for last July during the time. Refinitiv agriculture research estimated 2020/21 Brazil corn production at 90 million tons due to severe drought in southern Brazil. After taking into account low beginning stock and slightly decreasing domestic use, we estimated 2020/21 Brazil corn exports at 25 million tons, 3 million tons below USDA’s July estimate.
In Argentina, Refinitiv trade flows tracked 2.7 million tons of corn exports in June, lower than last year’s record high, but nearly 50% above the 5-year average. In July, 1.75 million tons of corn shipments were tracked as of 21 July, compared to 1.97 million tons for last year during the time. Taken with Refinitiv’s 2020/21 Argentina corn production estimate (46 million tons) and current corn export pace, we estimated 2020/21 Argentina corn exports at 31.75 million tons, lower than USDA’s July estimate of 35.5 million tons.
Brazil C-S Winter Corn Harvest 39% Done as of July 22: Agrural
Compares with 30% a week earlier and 53% a year before, consulting firm AgRural says in an emailed report.
- Pace is still accelerated in Mato Grosso, and progresses well in Sao Paulo, Goias and Minas Gerais, AgRural says
- Frost seen on July 19 and 20 didn’t affect harvest as much as it did 3 weeks earlier
- AgRural to present a revised estimate for winter corn crop by end of July/early August
WHEAT/CEPEA: Low temperatures concern, and prices rise in Brazil
The frosts from recent weeks and the possibility of steep temperature decreases this week and in the first fortnight of August are concerning agents about the effects on the wheat crops in Brazil – it is important to highlight that the damages caused by the recent frosts have not been assessed yet. Although wheat crops are less vulnerable to temperature decreases, majorly at the initial and intermediate stages of development, many areas were previously hit by frosts.
Strategie Grains Sees French Wheat Harvest at About 37.5 MT
Soft-wheat production in the EU’s top grower is seen at 36.6-37.9m tons for 2021, and will likely be at 37-37.5m tons, according to Strategie Grains analyst Vincent Braak said in an email.
- That’s a 10-14% increase above the five-year average, in line with a French Agriculture Ministry estimate
- Soft-wheat yields could rise 7-10% versus last year and the 2016-2020 average
- Crops are expected to rise 25-31% above last year’s output to as much as 37.9m tons
- “The final number would also depend on final regional acreage estimates would is likely to significantly change until September,” Strategie Grains analyst Vincent Braak said
Morocco Revises Up 2021 Wheat Harvest Estimate to 7.54M Tons
The kingdom’s second-biggest grains harvest on record included 5.06m tons of soft wheat and 2.48m tons of durum wheat, the agriculture ministry said in a statement carried by state news agency MAP.
- Barley harvest totaled 2.78m tons: ministry
- Average yield across all grain varieties came to 2.37 tons/hectare
- This year’s grains harvest is the biggest on record after 2015
Russian Wheat Exports Fall 38% so Far This Season: Agency
Wheat shipments for the 2021/2022 season totaled 1m tons as of July 22, the Federal Center of Quality and Safety Assurance for Grain and Grain Products said on its website, citing inspections before exports.
- This means that wheat exports totaled about 600k tons in week to July 22, compared with about 400k tons a week beforeThat compares with about 400k tons a week before
- Exports of all grains are at 1.5m tons in the season
- NOTE: Data are preliminary and include exports to the Eurasian Economic Union, which is a customs union of countries that includes Russia
USDA FAS Sees Australia Wheat Crop at 29.5M Tons on Good Rains
Australia wheat production in the 2021-22 season that starts in October is now seen at 29.5m tons, above the official USDA estimate of 28.5m tons, the agency’s Foreign Agricultural Service said in a report posted Friday.
- That would be the fourth-largest crop on record and could boost exports to 21.5m tons in the marketing year, versus official estimate of 20.5m tons
- Rainfall overall has been very good for wheat and barley in the early growth period from April to June
Argentina Wheat Exports Seen Reaching All-Time High: USDA FAS
Wheat exports in the 2021-22 season that starts in December are estimated at 14m tons, the highest on record, USDA’s Foreign Agricultural Service says in a report posted Friday.
- That tops an official USDA estimate of 13.5m tons
- Production seen at 20.8m tons, versus official USDA estimate of 20.5m tons
- Wheat planting will finish this month, and soil moisture is adequate in most provinces, aside from north-central Cordoba
- Argentina’s government has imposed export controls on products including beef, in an effort to tame domestic food prices
Grain Rail Delivery at Vancouver Port Jumps to Pre-Fire Levels
The number of grain rail cars unloaded at the Port of Vancouver reached a 4.5-week high on Sunday, AG Transport Coalition data showed Monday.
- More than 900 rail cars carrying grain were unloaded in Vancouver, the highest since June 23
- Indicates that CN Rail and CP Rail are returning to more normal operations in the Vancouver corridor after a June 30 wildfire damaged tracks
China, U.S. Head to Arbitration in WTO Agriculture Dispute
China said the U.S. overstated the level of retaliation it’s seeking related to a World Trade Organization dispute ruling over import restrictions on American agricultural exports, according to a Geneva-based trade official.
- The dispute centers on China’s WTO 2001 commitment to set quota levels for wheat, corn and rice that impose a lower tariff rate to imports up to a certain quantity
- The U.S. won a 2019 WTO dispute that said China failed to adhere to its agricultural quota commitments; China did not appeal the ruling and agreed to bring its measures into WTO compliance by June 29, 2021
- The U.S. now alleges that China didn’t comply with the ruling and is seeking to retaliate against an undisclosed amount of Chinese goods
- China disagrees with the level of retaliation proposed by the U.S. and disagrees with the U.S. claim that China has failed to comply with the WTO ruling
- The matter will now be referred to WTO arbitration
- The U.S. Department of Agriculture previously said that Beijing’s actions prevented an additional $3.5 billion worth of crops being imported into China
- Separately, China says it complied with the 2019 ruling and asked a WTO panel to resolve the dispute in its favor
Heavy Rain in Parts of Europe Could Hamper Grain Quality: MARS
Exceptionally high rains in much of France, Germany, Romania and Ukraine will likely hurt grain quality rather than yields, the EU’s Monitoring Agricultural Resources unit wrote Monday in a report.
- Most of France had twice the usual amount of rainfall during the analysis period, from June 1-July 20
- Better corn-yield prospects are seen for Romania and Bulgaria, but may be partly offset by downward revisions in Hungary and other parts of south-central Europe
- Much warmer-than-usual weather in the Baltic countries and Finland accelerated development of winter and spring crops, cutting yield expectations
- See table with latest forecasts for 2021; yields in tons/hectare:
India Cumulative Monsoon Rainfall 1% Below Normal as of July 26
India has so far received 398.4 millimeters of rains during the current monsoon season, which runs from June through September, compared with a normal of 403.9 millimeters, according to data published by the India Meteorological Department on July 26.
- The eastern and northeastern region got 17% below normal rains
- Rainfall in the southern peninsular region was at 26% above normal
- Cumulative seasonal rainfall data is compiled by the IMD
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.