Global Ag News for May 13th
TODAY—WEEKLY EXPORT SALES—
Overnight trade has SRW Wheat down roughly 7 cents; HRW down 9 cents; HRS Wheat down 4, Corn is down 12 to 7 cents; Soybeans down 16; Soymeal down $5.50, and Soyoil down 25 points.
Chinese Ag futures for (September) settled up 5 yuan in soybeans (at U.S. $26.30), down 34 in Corn (at $11.12), down 54 in Soymeal (at $521), up 114 in Soyoil (at 64.30 cents), and up 112 in Palm Oil.
Malaysian palm oil market is on holiday until Monday.
U.S. Weather Forecast: Last evening’s GFS model run shifted some areas of rainfall around compared to the midday GFS model run; however, it was similar in showing significant and frequent rain throughout a majority of the next two weeks in the central part of the U.S. from central Texas into the Corn Belt. Frequent rain is expected and will include the western Delta and central and eastern parts of the Hard Red Winter Wheat Region as well and extending into West Texas at times.
South America Weather Forecast: Last evening’s GFS model run was similar to the midday GFS model in showing some meaningful rain in Safrinha Corn areas of Brazil May 23 – 24.
The player sheet had funds net sellers of 9,000 contracts of SRW Wheat; sold 32,000 Corn; bought 10,000 Soybeans; net bought 5,000 Soymeal, and; bought 6,000 in Soyoil.
We estimate Managed Money net long 7,000 contracts of SRW Wheat; net long 346,000 Corn; long 222,000 Soybeans; long 67,000t Soymeal, and; net long 97,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 3,900 contracts; HRW Wheat up 2,300; Corn down 3,100; Soybeans up 17,100 contracts; Soymeal up 1,900 lots, and; Soyoil up 9,300.
Deliveries were ZERO Soymeal; ZERO Soyoil; 47 Rice; ZERO Corn; 5 HRW Wheat; ZERO Oat; 124 Soybeans; 15 SRW Wheat, and; ZERO HRS Wheat.
There were changes in registrations (SRW Wheat up 15; Rice up 10; HRW Wheat down 6)—Registrations total 83 contracts for SRW Wheat; 16 Oats; Corn ZERO; Soybeans 143; Soyoil 1,055 lots; Soymeal 210; Rice 1,556; HRW Wheat 1,277, and; HRS 521.
Strong domestic demand will keep U.S. stockpiles of corn and soybeans near seven-year lows even after farmers harvest the crops they are currently seeding, the government said. The stocks estimates were in line with market expectations but the report showed that the recent gains in ag commodities, highlighted by soybean futures to a nearly nine-year high this week, are likely to continue.
Wire story reported Chicago corn futures are trading at multi-year highs after major harvests came up short and China burst on to the import scene, but the U.S. government thinks the situation will be more manageable throughout the next year than market participants might have expected. The key to this supply boost is a substantial recovery in production, though confidence in that is a long way off and inventory is expected to remain historically tight. The outcome of the U.S. crop will be among the first checkpoints, and a strong result could kick off a move toward lower prices.
For the week ended May 7th, ethanol production was 979,000 barrels per day, up 2.8% versus a week ago, up 59.0% versus a year ago.
Stocks were 19.4 mil barrels, down 5.1% versus last week, down 19.8% versus last year.
Corn used was 98.9 mil bu versus 96.2 mil last week and versus the 97.4 mil needed to meet USDA projections.
Improved sowing weather raises U.S. corn crop outlooks – Refinitiv Commodities Research
—2021/22 US CORN PRODUCTION: 392 [353–429] MILLION TONS. Improved sowing conditions and favorable weather outlooks fractionally raise 2021/22 U.S. corn production to 15.44 [13.9–16.9] billion bushels. The next USDA survey-based estimate of acreage will be released in the 30 June Acreage report.
More than 400 barges were delayed on the lower Mississippi River on Wednesday after a bridge crack prompted the U.S. Coast Guard to halt vessel traffic on a portion of the waterway crucial for shipping crops to export markets. The disruption hit as strong demand for U.S. corn and soybeans has tightened inventories and pushed crop prices to their highest in more than eight years. Also, U.S. President Joe Biden is seeking to have Congress approve a $2.25 trillion infrastructure bill. The Coast Guard stopped all traffic on the Mississippi River near Memphis – between mile markers 736 and 737 – after a crack was discovered in the Hernando de Soto Bridge that spans the river
USDA Broiler/Egg Set-Chicks Placed Report – May 12
Broiler-Type Eggs Set in the United States Up 7 Percent
Broiler-Type Chicks Placed in the United States Up 14 Percent
Influential Chinese agricultural data provider Cofeed has suspended operations without explanation, leaving a gap in highly valued information on grain and oilseed supplies in the world’s biggest soybean buyer. The company, officially known as Beijing TianxiaLiangchang Technology Co Ltd, stopped updating its website with data and analysis on April 29. It has also stopped supplying daily and weekly data to Refinitiv, the financial data company, which published an advisory for clients using its Eikon platform. “We are still investigating the reasons for why the source has not sent this data.
China Weighs New Economic Envoy to U.S. Beijing is considering whether to replace Vice Premier Liu He as its top economic envoy with Washington, a decision that Biden administration officials say will indicate the depth of China’s interest in economic cooperation. Under this scenario, these officials said, Mr. Liu, who has spent decades working on economic reform, would be succeeded by Hu Chunhua, a younger vice premier who made his mark overseeing the restive Tibet region and running the trade-reliant coastal province of Guangdong but who has little experience in U.S.-China relations. The deliberation is part of a wider personnel shuffle as China recalibrates its approach to the new U.S. administration.
Fast spring planting pace raises China corn sown area and production – Refinitiv Commodities Research
Satellite imagery and dry upcoming weather further lowers Brazil corn production – Refinitiv Commodities Research
—2020/21 BRAZIL CORN PRODUCTION: 102.1 [92.0–106] MILLION TOns, down 2% from last update. After continued dryness lowers vegetation density in southern second crop areas, 2020/21 total Brazil corn production is lowered to 102.1 [92-106] million tons.
Dry weather and poorly timed planting are weighing on Brazil’s second corn crop this year, reviving fears of another surge in feed prices like the one that battered big meatpackers after a 2016 drought. Soaring prices convinced Brazilian farmers to plant their second corn crop outside the ideal climate window this year. But the crop was hit by the country’s worst drought in five years, reducing yields. Given surging demand in global grains markets, a corn shortage could squeeze profit margins in Brazil for some of the world’s biggest protein producers, including JBS SA and BRF SA. JBS and BRF, which report earnings later on Wednesday, declined to comment on margin pressure from rising feed costs. JBS’s net income plunged 92% in 2016, in part due to surging Brazilian feed costs, and BRF’s annual results swung to a loss.
Argentine farmers have sold 17.3 million tonnes of soybeans from the 2020/21 season, after transactions were registered for 886,100 tonnes in the week ending on May 15, the Agriculture Ministry said. Ministry data showed the pace of soy sales lagged that of the previous season. Growers said that they had been hoarding crops as a hedge against the weakening local peso. Last year they had sold 21.4 million tonnes by this date. Argentine growers are currently harvesting 2020/21 soy.
The ministry said 26.3 million tonnes of corn had been sold by Argentine farmers through May 5, 3.4 million tonnes more than had been sold at the same point last year.
Argentina corn production slightly down on continued delay in harvest – Refinitiv Commodities Research
Paraguay soybean production unchanged as main crop harvests nearly complete – Refinitiv Commodities Research
—2020/21 Paraguay soybean production: 9.9 [9.0–10.2] million tons, unchanged from last update
Russian exports of wheat increased to 8.7 million tonnes in the first three months of 2021 from 7.3 million tonnes a year ago, official customs data showed.
Farm office FranceAgriMer cut its forecasts of French wheat, barley and maize stocks at the end of this season to the lowest levels in years, underscoring tight grain supply as attention turns to harvest prospects. For soft wheat, France’s main cereal crop, stocks at the close of the 2020/21 season on June 30 are now expected at 2.6 million tonnes, down from 2.7 million projected last month. The new stocks forecast was down more than 13% from 3.0 million tonnes at the end of 2019/20, and would be the smallest volume since 2013/14, it said.
Euronext wheat edged lower on Wednesday as cereal markets consolidated after a recent rally and traders assessed U.S. government crop forecasts. September milling wheat settled down 1.25 euros, or 0.6%, at 225.50 euros ($272.16) a tonne.
Egyptian authorities have so far procured 2.2 million tonnes of local wheat this season, the supply minister said. Egypt is expecting to procure a total of 3.4 million tonnes of local wheat from this year’s harvest.
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