Global Ag News Headlines for May 8

by ADMIS Research Team

Overnight trade has SRW down roughly 2 cents, HRW down 2; HRS Wheat up 1, Corn is up 1 cent; Soybeans up 5, Soymeal up $1.00, and Soyoil up 20 points.

For the week, SRW Wheat prices are up roughly 4 cents; HRW down 6; HRS up 5; Corn is up 1 cent; Soybeans unchanged; Soymeal down $4.00, and; Soyoil unchanged; Crushing margins are down 8 cents; Oil share unchanged.

Chinese Ag futures (Sep) settled up 7 yuan in Soybeans, down 18 in Corn, down 1 in Soymeal, up 38 in Soyoil, and up 48 in Palm Oil.

Malaysian palm oil prices were up 45 ringgit at 1,991 (basis July) at midsession.

U.S. Weather Forecast

Freezes are still expected in portions of the Corn Belt Friday through Tuesday; Ohio, Indiana, Michigan, Wisconsin, northern and eastern Iowa, and northern and eastern Illinois will be coldest, in general, with the greatest threat of some crop damage

Some soft wheat in Ohio and immediate neighboring areas may be permanently damaged as a result; freezes in Nebraska, northeastern Colorado, and far northwestern Kansas will cause burn back of vegetative growth but is unlikely to cause permanent damage.

South America Weather Forecast

A rain event is still likely to occur again in Brazil’s southern and center west crop areas Monday into Friday of next week

The player sheet had funds net buyers of 5,000 contracts of SRW Wheat; net bought 12,000 Corn; were net buyers of 10,000 Soybeans; net even in Soymeal, and; net bought 3,000 lots of Soyoil.

We estimate Managed Money net long 17,000 contracts of SRW Wheat; net short 149,000 Corn; net long 14,000 Soybeans; net short 8,000 lots of Soymeal, and; net short 8,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures down roughly 1,700 contracts; HRW Wheat down 2,800; Corn down 140; Soybeans up 17,000 contracts; Soymeal up 6,100 lots, and; Soyoil up 3,800.

Deliveries were ZERO Soymeal; 56 Soyoil; 50 Rice; ZERO Corn; ZERO HRW Wheat; ZERO Oats; ZERO Soybeans, and; ZERO SRW

There were changes in registrations (Rice down 18; HRS down 2)—Registrations total 11 contracts for SRW Wheat; ZERO Oats; Corn 7; Soybeans 1; Soyoil 3,495 lots; Soymeal 547; Rice 227; HRW Wheat 10, and; HRS Wheat 488 contracts.

TODAY—COMMITMENT OF TRADERS— 

Tender Activity—S. Korea bought 138,000t South American corn—Tunisia seeks 69,000t optional-origin vegoil—

For the week ended April 30th, U.S. All Wheat sales are running 2% ahead of a year ago, shipments up 5% with the USDA forecasting a 5% increase on the year

—By class, HRW wheat sales are up 6%, shipments 15% ahead with a USDA forecast of a 15% increase

—SRW sales 29% behind, shipments unchanged with a 26% decline seen

—HRS sales 11% ahead, shipments up 6% with a 6% increase seen

For the week ended April 30th, U.S. Corn sales are running 19% behind a year ago, shipments 33% behind with the USDA forecasting a 16% decline.

For the week ended April 30th, U.S. Soybean sales are running 11% behind a year ago, shipments 4% ahead with the USDA forecasting a 2% increase on the year

—Soymeal sales 8% behind on the year, shipments down 3% with a 1% decrease forecasted

—Soyoil sales 48% ahead of a year ago, shipments 38% ahead with a 24% increase forecasted

U.S. soybean exports have been historically sluggish in recent months, but although industry expectations are already low, full-year shipments are in danger of falling even further without more bookings from China; based on data published on Tuesday by the U.S. Census Bureau, the United States shipped 2.57 million tons of soybeans in March, a five-year low for the month and down 31% from last year’s record; shipments to China totaled just 208,505 tons, the lightest for March since 2002 and the lowest volume for any month since December 2018; that brought combined February and March exports to China to the lowest for the period since 1999.

U.S. corn exports totaled 4.62 million tons in March, the largest monthly total since May 2019 but below the recent March average; inspections imply that April shipments were just as good, if not slightly better than in March, and the best-case scenario for April would place cumulative 2019-20 exports at 25.4 million tons or about 1 billion bushels, with the low-end scenario some 2% less.

World food prices fell for a third consecutive month in April, hit by the economic and logistical impact of the coronavirus pandemic, the United Nations food agency said; the Food and Agriculture Organization (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 165.5 points last month, down 3.4% on March

—The FAO sugar price index fell to a 13-year low, plunging 14.6% from March, with the coronavirus crisis hitting demand and tumbling crude oil prices also reducing the need for sugarcane to produce ethanol

—The vegetable oil price index fell 5.2%, hit by falling palm, soy and rapeseed oil values, while the dairy index dropped 3.6%, with butter and milk powder prices posting double-digit declines

—The meat index shed 2.7%, with a partial recovery in import demand from China failing to balance a slump in imports elsewhere

CME Raises Live Cattle Futures Margin by 4.7% – Reuters

  • RAISES LIVE CATTLE FUTURES (LC) MARGINS BY 4.7% TO $2,250 PER CONTRACT FROM $2,150
  • SAYS RATES WILL BE EFFECTIVE AFTER THE CLOSE OF BUSINESS ON MAY 8, 2020

Saskatchewan crop report

—Seeding is underway in many parts of the province this week, with seven per cent of the 2020 crop now in the ground; this is just below the five-year average (2015-2019) of nine per cent for this time of year; a slow start to spring has delayed field operations in areas of the province, but most producers have indicated they will be out in the field within the next few weeks as fields dry up and soil temperatures rise

Canadian farmers plan to seed less canola and more wheat in 2020, Statistics Canada said on Thursday, but noted the coronavirus crisis meant the agency’s survey data was collected under “exceptional circumstances” that resulted in a lower response from farmers

—Canola plantings are likely to reach 20.6 million acres, down 1.6% from last year, the lowest seeded area since 2013, Statscan said; that figure is below the average trade guess of 21.1 million acres

—All-wheat seeding intentions were pegged at 25.4 million acres, up 3.3% from last year, and just slightly above the average trade expectation of 25.3 million acres; meanwhile, durum wheat acreages were up 6.8%, to 5.2 million acres.

—In a separate release, Statscan said total wheat stocks were up 1.6%, to 17.8 million tonnes from last year’s 17.5 million

—Canola stocks declined 12.3%, to 8.9 million tonnes from 10.2 million tonnes a year earlier.

BRAZIL 2020 SOYBEAN EXPORT FORECAST INCREASED TO 77 MILLION TNS VERSUS 75.3 MILLION TNS IN APRIL FORECAST – ABIOVE OILSEEDS GROUP

BRAZIL FINAL SOYBEAN STOCKS IN 2020 ESTIMATED AT 1.87 MILLION TNS VERSUS 3.6 MILLION TNS IN PREVIOUS FORECAST – ABIOVE

Brazil’s Itaqui port, from where more than 10% of the country’s soybeans were exported last year, has not been affected by lockdown measures imposed this week in Maranhão state due to the novel coronavirus, an official said; port activity is considered exempt from the order and personnel, rail services and trucks continue to have normal access to the port area

The condition of French soft wheat was stable in the week to May 4, with 57% of crops rated good or excellent, unchanged from the previous week, farm office FranceAgriMer said

—The stable rating suggests crops drew some benefit from the return of rain after a very dry spell during which FranceAgriMer’s cereal crop ratings declined

—Progress in sowing grain maize slowed, however, with 77% of the crop planted by May 4 compared with 70% a week earlier

Morocco extended its suspension of import duties on soft wheat to December 31, to ensure price stability and regular supply amid low domestic output, the government said

—The decision was adopted by the government council to keep the quintal price at 260 dirhams.

—Morocco expects a cereal output of 3 million tons, down 42% from last season due to low and irregular rainfall

—This year’s harvest includes 1.65 million tons of soft wheat, 0.75 million tons of durum and 0.5 million tons of barley

Iran hunts for grains as coronavirus compounds economic woes – Reuters News

  • State wheat purchases may not be enough despite bumper crop
  • Iran tapping market for wheat, corn outside formal tenders
  • Smaller suppliers sought as payment delays burn bigger players

Malaysia crude palm oil output to dip 1% in 2020- state agency

  • Malaysia crude palm oil out to fall 1% from 2019 -MPOC
  • Malaysia end-2020 palm oil stocks likely at 1.9 mln ton

—Crude palm oil output in Malaysia will drop in 2020 by 1% from a year earlier because of drier weather last year limiting yields and the country’s lockdowns this year to prevent the spread of the coronavirus

—Output this year is expected to drop to 19.7 million tonnes from a year earlier

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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.

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