Global Ag News for Sept 1st
TODAY – WEEKLY EIA ENERGY REPORT
Wheat prices overnight are up 4 1/2 in SRW, up 5 1/4 in HRW, up 6 1/2 in HRS; Corn is down 3 1/2; Soybeans down 8 1/4; Soymeal down $0.15; Soyoil down 0.42.
For the week so far wheat prices are down 5 3/4 in SRW, down 6 3/4 in HRW, down 7 3/4 in HRS; Corn is down 23; Soybeans down 39; Soymeal down $0.83; Soyoil down 2.01.
Chinese Ag futures (JAN 22) Soybeans down 17 yuan ; Soymeal down 9; Soyoil down 74; Palm oil down 106; Corn down 9 — Malasyian Palm is down 68. Malaysian palm oil prices overnight were down 68 ringgit (-1.60%) at 4186 on concerns that dwindling exports may boost stockpiles in second-largest grower Malaysia, and weaker soyoil will cut demand for the tropical commodity in food and fuel.
Midwest corn, soybean and winter wheat forecasts: West: Scattered showers south Tuesday-Wednesday. Scattered showers Thursday-Friday. Isolated showers Saturday. Temperatures near to above normal through Saturday. East: Isolated to scattered showers south through Wednesday, could be heavy. Mostly dry Thursday. Isolated showers Friday-Saturday. Temperatures near to above normal Tuesday, near normal Wednesday-Friday, near to above normal Saturday. 6 to 10 day outlook: Isolated to scattered showers Sunday-Thursday. Temperatures near to above normal Sunday, near normal Monday-Tuesday, near to below normal Wednesday-Thursday.
The player sheet for Aug. 31 had funds: net sellers of 2,500 contracts of SRW wheat, sellers of 12,500 corn, sellers of 6,500 soybeans, sellers of 1,000 soymeal, and sellers of 3,000 soyoil.
Preliminary changes in futures Open Interest as of August 31 were: SRW Wheat up 564 contracts, HRW Wheat up 2,314, Corn down 1,279, Soybeans up 5,982, Soymeal up 2,482, Soyoil up 1,510.
There were changes in registrations (6 Oats). Registration total: 1,000 SRW Wheat contracts; 53 Oats; 0 Corn; 0 Soybeans; 249 Soyoil; 1 Soymeal; 1,288 HRW Wheat.
- WHEAT SALE: Iranian state agency the Government Trading Corporation is believed to have purchased around 180,000 tonnes to 240,000 tonnes of milling wheat in the past two weeks as strong import demand from the country continued
- CORN SALE: Taiwan’s MFIG purchasing group bought about 65,000 tonnes of animal feed corn expected to be sourced from Argentina in an international tender that closed on Tuesday
- WHEAT TENDER: Algeria Seen Buying totaling at least 390,000 tons of wheat wear $355/ton
- FEED WHEAT TENDER: An importer in the Philippines is tendering to purchase an estimated 60,000 tonnes of animal feed wheat
- WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy milling wheat to be sourced from optional origins
- WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
- WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
- WHEAT TENDER: Turkey’s state grain board TMO issued an international tender to purchase about 300,000 tonnes of milling wheat
- WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase 48,875 tonnes of grade 1 milling wheat to be sourced from the United States
- WHEAT FLOUR TENDER: The state purchasing agency in Mauritius issued an international tender to buy 47,000 tonnes of wheat flour to be sourced from optional origins
- SOYBEAN OIL TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities is seeking at least 30,000 tons of soybean oil and 10,000 tons of sunflower oil
ETHANOL: U.S. Weekly Production Survey Before EIA Report
Output and stockpile projections for the week ending Aug. 27 are based on nine analyst estimates compiled by Bloomberg.
- Production seen lower than last week at 926k b/d
- Would be the eighth straight weekly decline
- Stockpile avg est. 21.146m bbl vs 21.223m a week ago
Ida Crop Damage Might Only Be Measured Next Week
Only next week traders will be able to get a sense of the damage Tropical Storm Ida may have caused on crops, AgriVisor says. “The initial reaction is that little damage took place, but given current stocks to use estimates, any loss may be excessive.” Despite the potential toll on the supply side, futures are down since Ida made landfall in the weekend, as the bullish impact is offset by bearish factors, including potential damage to infrastructure that can make it harder for grains to hit export markets via the Gulf ports.
SovEcon Cuts Russia Wheat Crop Estimate 1% on Heat, Dryness
Russia’s 2021 wheat harvest is now seen at 75.4m tons, down from a prior estimate for 76.2m tons, due to low spring wheat yields, consultant SovEcon said in an emailed note.
- Crops in the Urals and Volga Valley regions suffered from a very hot, dry summer
- Urals may harvest its smallest crop since 2012 and Volga Valley the lowest since 2014
- Both areas had only 50-80% of normal rain over the last three months and temperatures 3-5C above normal
- The downgrades there were partially offset by larger crop expectations for the Center, South and Siberia regions
EU Soft-Wheat Exports Rose 12% in Season Through Aug. 29
Soft-wheat shipments during the season that began July 1 amounted to 3.68m tons as of Aug. 29, versus 3.28m tons in a similar period a year earlier, the European Commission said Tuesday on its website.
- NOTE: Data for the prior season include trade for the U.K. until Dec. 31, 2020, when the country departed the EU customs union
- Top soft-wheat destinations were Algeria (539k tons), South Korea (428k tons) and Jordan (283k tons)
- EU barley exports totaled 2.12m tons, compared with 1.6m tons a year earlier
- China is the top market at 600k tons
- EU corn imports reached 2.44m tons, against 2.6m tons a year earlier
CHS Diverts River Traffic as Ida Shutters La. Export Terminal
CHS is working to divert vessels scheduled for loading at its Myrtle Grove, La., export terminal through Sept. after the facility was closed ahead of Hurricane Ida making landfall.
- The top U.S. farm cooperative can’t yet safely access the terminal because of flooded roads, John Griffith, EVP, CHS Global Grain & Processing, says in emailed statement
- Electric power is down and “best estimates” as to when it will be restored are in the two-to-four week range: Griffith
- Minnesota-based CHS is attempting to connect with all workers to ensure their safety: Griffith
Brazil August soy exports seen reaching 5.785 mln T – Anec
- BRAZIL SOY EXPORTS SEEN REACHING 5.785 MILLION TNS IN AUGUST VERSUS 5.986 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
- BRAZIL CORN EXPORTS SEEN REACHING 4.344 MILLION TNS IN AUGUST VERSUS 4.737 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
Manitoba Soil Moisture Improves But Wetness Hurts Cereal Crops
Cool and wet weather delayed harvesting in the Canadian Prairie province and will affect the quality of cereal crops still in the field, Manitoba government says Tuesday.
- Harvest is 35% complete, weekly crop report says
- Winter wheat and fall rye are completely harvested, spring wheat is 69% complete
- Canola is 7% harvested, with barley at 78%, oats at 70%, field peas at 98%
- Winter wheat and fall rye are completely harvested, spring wheat is 69% complete
- Soil moisture improved rapidly with top 30 cm (12 inches) “optimal to wet”
- Subsoil moisture improved slightly
- Substantial rains helped hay and pastureland turn green for fall grazing
- Cereal and canola straw are being baled and moved from fields for animal feed
- Some producers are considering turning late-green canola into silage due to lack of good seeds
Biggest Soy Supplier Hangs on to Beans After Missing Last Rally
- Brazil soy growers have slowed pace of sales versus last year
- Farmers are waiting even with local prices near all-time highs
Soybean growers in Brazil, the largest shipper of the oilseed, are holding off on forward sales even as local prices approach all-time highs and a bumper crop is on the way. About 28% of Brazilian soy to be harvested next year has been pre-sold compared with 44% a year earlier, according to MD Commodities in Chicago.
Farmers are more reluctant to lock in prices after last year selling a significant part of their future crop just before commodity prices took off, said Daniele Siqueira, an analyst at AgRural. For example, growers in the Sorriso municipality of Mato Grosso state sold their past crop at an average of 100 reais ($19.50) per 60-kilogram bag versus today’s price of 165 reais, according to the consulting firm.
Canadian Farm Income in First Half Jumps 12% on Higher Sales
Farm cash receipts rose in the first half of 2021, with higher crop and livestock sales more than offsetting lower direct payments to producers, Statistics Canada says Tuesday.
- Farm cash receipts totaled C$38.2b ($30.2b) in first six months, up 12% from year-earlier period
- 2Q receipts totaled C$18.5b, up 9.8% y/y
- Crop and livestock sales rose though direct payments tumbled 45% on lower insurance payments
- Cannabis receipts dropped by 11%
- China was a major buyer of Canadian grains and oilseeds and bought 17% of its exported wheat, more than any other country
- Livestock receipts rose largely due to gains in hog sales, which made up more than half the growth due to higher prices and strong demand
- The number of hogs slaughtered dropped
- Hog exports soared 92% on strong U.S. demand and labor disruptions in the Canadian pork sector
- Crop and livestock production suffered due to high temperatures, drought conditions, wildfires and higher feed costs since data was collected
- Full impacts will be clearer in future reports
Cargill’s Damaged Grain Elevator Exported 9% of Key U.S. Crops
A grain elevator damaged by Hurricane Ida in Reserve, Louisiana is responsible for nearly 9% of America’s bulk seaborne exports of corn, soybeans and wheat so far in 2021, according to Bloomberg’s analysis of U.S. Department of Agriculture data.
USDA shipments show a total of 6.45 million tons of agricultural product loaded at the Cargill terminal, with 5.3 million tons of corn topping the list. The primary recipient of crops through the elevator this year has been China, receiving 47% of its output including 2.5 million tons of corn and 485,000 tons of soybeans.
The last two vessels visiting the elevator have remained same place, with one possibly aground, Bloomberg’s vessel data showed.
Malaysia’s August Palm Oil Exports 1,219,166 Tons: AmSpec
Shipments decline 14.6% m/m from 1,427,997 tons exported during July 1-31, according to AmSpec Agri on Wednesday.
Corteva Scores Exclusive License For Sustainable Biofungicide
Corteva Inc. to expand partnership with life sciences company Elemental Enzymes to include exclusive license to a new biofungicide for row crops, company says in statement Tuesday.
- Biofungicide is for soybeans, cereals, corn, oilseeds, rice, sugarcane, turf and ornamental applications
- Helps plant protect itself from fungal diseases like Asian soybean rust, wheat head scab
- Corteva anticipates global launch of new biofungicide brand to begin in Latin America in 2022, U.S. in 2023
CSRC’s Fang Says China Will Further Open Up Futures Market: News
China is seeking more influence in pricing of soybean, palm oil, PTA and crude oil, while further opening up the futures markets, Shanghai Securities News reports.
- China Securities Regulatory Commission Vice Chairman Fang Xinghai told an online forum that CSRC will also strengthen cross-border regulatory supervision cooperation on futures market
- Futures model can be used to project potential inflation and offer forward-looking guidance for the country’s macroeconomic policies
India’s monsoon rains forecast to be above average in September
India is likely to receive above average rainfall in September, the state-run weather office said on Wednesday, helping millions of farmers who had to endure patchy rains in July and August.
- Monsoon rains were 10% above average in June.
- “According to critical weather parameters, rains are most likely to be above normal in September this year,” Mrutyunjay Mohapatra, Director General of the India Meteorological Department (IMD), told a news conference.
- The IMD defines average, or normal, rainfall as between 96% and 104% of a 50-year average of 88 cms (34 inches) for the four-month season beginning in June.
- After lashing the southernmost Kerala coast on June 3, the monsoon spread to two-thirds of India by the end of the first half of the month, nearly 15 days earlier than expected. And then it tapered off in the third week of June.
- Despite a brief revival, monsoon rains continued to be weak in July and August.
Big names in India’s palm oil industry are chalking out plans for expansion of palm oil plantation
The big names in India’s palm oil industry are chalking out plans for expansion of oil palm plantation and processing, encouraged by the government’s move to boost oilseed production and reduce the country’s reliance on imports for its cooking oil needs.
Of the four main companies in this sector, the leading two– Godrej Agrovet and 3F Oil Palm—are considering investing about Rs 500 crore each over the next five years for expansion of oil palm cultivation, after the government earlier this month said Rs 11,000 crore will be invested under the National Edible Oil Mission–Oil Palm to boost oilseed production.
New Atlantic Storm Takes Shape Off Africa Coast Near Cabo Verde
- Storm likely to become Hurricane Larry later this week
- System will still be far from land in mid-ocean by Sunday
A new tropical depression has formed off Africa’s coast, and it will likely remain deep in the central Atlantic as it becomes a hurricane by Friday.
The storm has 35-mile-per-hour winds and was located 335 miles (540 kilometers) southeast of the Cabo Verde Islands moving west-northwest at 16 mph, the National Hurricane Center said in a 5 p.m. New York time advisory. It will likely be named Larry overnight and become at least a Category 2 hurricane on the five-step Saffir Simpson scale. Even by Sunday the storm will be far from land in the central Atlantic. So far in 2021, 12 storms have formed including Ida, which just struck Louisiana days ago with 150 mph winds.
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.