TODAY
Wheat prices overnight are down 1 in SRW, up 4 in HRW, down 1 in HRS; Corn is unchanged; Soybeans down 4 1/2; Soymeal down $0.12; Soyoil up 0.34.
For the week so far wheat prices are up 1 3/4 in SRW, up 7 1/4 in HRW, down 3 3/4 in HRS; Corn is down 2 1/4; Soybeans up 1 3/4; Soymeal up $0.56; Soyoil down 0.62. For the month to date wheat prices are down 10 1/2 in SRW, down 5 in HRW, up 8 3/4 in HRS; Corn is up 23 1/2; Soybeans up 63 3/4; Soymeal up $41.00; Soyoil down 1.97.
Chinese Ag futures (MAY 22) Soybeans down 41 yuan ; Soymeal up 5; Soyoil down 30; Palm oil down 4; Corn down 10 — Malasyian Palm is up 89. Malaysian palm oil prices overnight were up 89 ringgit (+2.07%) at 4384.
There were no changes in registrations. Registration total: 1,900 SRW Wheat contracts; 39 Oats; 50 Corn; 244 Soybeans; 143 Soyoil; 0 Soymeal; 92 HRW Wheat.
Preliminary changes in futures Open Interest as of December 20 were: SRW Wheat up 170 contracts, HRW Wheat up 890, Corn up 2,732, Soybeans up 7,974, Soymeal up 4,742, Soyoil up 1,689.
Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Isolated showers through Wednesday. Mostly dry Thursday-Friday. Temperatures near to above normal through Wednesday, near normal Thursday-Friday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers through Friday. Temperatures near normal through Friday.
Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Isolated showers Monday-Tuesday. Mostly dry Wednesday-Thursday. Isolated showers east Friday. Temperatures near to above normal through Friday. La Pampa, Southern Buenos Aires Forecast: Isolated showers Monday-Tuesday. Mostly dry Wednesday-Thursday. Isolated showers east Friday. Temperatures near to above normal through Friday.
The player sheet for Dec. 20 had funds: net buyers of 1,000 contracts of SRW wheat, sellers of 2,500 corn, buyers of 3,500 soybeans, buyers of 3,000 soymeal, and sellers of 3,500 soyoil.
TENDERS
- WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat, which can be sourced from optional origins
- DURUM WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy durum wheat for shipment in February.
PENDING TENDERS
- WHEAT TENDER: Turkey’s state grain board TMO has issued an international tender to purchase about 320,000 tonnes of milling wheat
- FEED BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley
- WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase 110,000 tonnes of grade 1 milling wheat to be sourced from the United States
U.S. Inspected 1.002m Tons of Corn for Export, 1.679m of Soybean
In week ending Dec. 16, according to the USDA’s weekly inspections report.
- Wheat: 212k tons vs 269k the previous wk, 392k a yr ago
- Corn: 1,002k tons vs 917k the previous wk, 770k a yr ago
- Soybeans: 1,679k tons vs 1,747k the previous wk, 2,857k a yr ago
Argentina Publishes Export Quotas for Corn and Wheat
Quota for the 2021-22 wheat crop currently being harvested is 12.5m metric tons, according to note sent to exporters by the Undersecretariat of Agricultural Markets and seen by Bloomberg.
- Quota for 2020-21 corn that was harvested earlier in the year is 41.6m tons
- For 2021-22 corn that’s currently being planted and starts getting harvested at the end of March, the preliminary quota is 25m tons
- For next season’s wheat crop that’ll be harvested at the end of 2022, the preliminary quota is 2m tons
SovEcon Raises 2022 Wheat Crop Estimates for Russia, Ukraine
Russia’s wheat harvest in 2022 may reach 81.3m tons, up from an earlier estimate of 80.7m tons, consultant SovEcon says Monday in an emailed note.
- Crop conditions are largely favorable across the country, including substantially better-than-average conditions in the south after ample autumn precipitation
- That should offset a decline in winter-wheat plantings
- Ukraine wheat crop in 2022 now seen at 29.1m tons, up 2m tons from prior estimate, on larger plantings and improving conditions from recent rain
-
- Farmers were able to plant wheat late amid warm weather
-
Ukraine’s Wheat Harvest Jumped 29.4% to 32.7M Tons in 2021
Ukraine’s grain harvest rose 33.5% in 2021 to 84.57 million tons as yields improved, the nation’s state-run statistics office said Monday.
- Corn crop climbed 42% to a record 39.82m tons
- Barley harvest increased 23.2% to 9.65m tons
- Sunflower seeds crop rose 25.1% to 16.44m tons
India Extends Unrestricted Import of Refined Palm Oil for a Year
India extended unrestricted import of refined palm and palmolein oils for a year until Dec. 31, 2022, according to a notification by commerce ministry.
Imports are not permitted through any port in Kerala.
India Cuts Base Import Duty on RBD Palmolein to 12.5% from 17.5%
Effective duty on RBD Palmolein, including other taxes, will be 13.75%, lower than 19.25% earlier, according to a govt notification.
Malaysia Keeps Crude Palm Oil Export Duty at 8% for January
Gazetted price for crude palm oil at 5,302.01 ringgit a ton, which incurs the maximum export tax of 8%, according to a statement from the customs department posted on the Malaysian Palm Oil Board’s website.
- NOTE: Tax has been kept at 8% since Jan. 2021, following government exemption in July-December 2020
- NOTE: Export duty structure starts at 3% when FOB prices for CPO are in the 2,250-2,400 ringgit per ton range
- Maximum tax rate is 8% when prices are above 3,450 ringgit per ton
UAC Ups Ukraine Corn-Crop Est., Sees Exports to China Picking Up
The 2021 corn crop is now seen reaching 39.2m tons, up from a November estimate of 38.5m tons, based on the latest harvest progress and yield data, researcher UkrAgroConsult said in a report.
- “An expansion of planted areas combined with a good yield level resulted in a bumper crop”
- Corn export outlook also raised 0.7m tons to 32.7m tons
- Late harvesting caused a delay in early-season exports
- “As of today, the purchases by Egypt and China lag behind last year. However, judging by the lineup, China will catch up with last year promptly”
- As much as 711k tons was shipped to China from Dec. 1-9, with another 942k tons scheduled for later in the month
- Iran and Turkey are also active buyers, but a weaker Turkish lira may hamper the country’s purchasing power
U.S. overpaid corn farmers $3 bln in Trump trade aid -GAO
The Department of Agriculture overpaid U.S. corn farmers in 2019 by around $3 billion for impacts from former President Donald J. Trump’s trade policies, in part because the agency over-estimated the value of their lost export business, according to a nonpartisan government agency report released Monday.
The Market Facilitation Program in 2018 and 2019 distributed $23 billion in payments to farmers under the USDA’s Farm Service Agency to help offset the heavy blows farmers faced in the wake of Trump’s trade war with China and other top export markets.
Payments to corn farmers were approximately $3 billion more than USDA’s final estimated damages from the trade war, while soybean, sorghum, and cotton farmers received less than the estimated trade damage, the report from the U.S. Government Accountability Office (GAO) found.
The report, requested by the U.S. Senate Agriculture Committee, also found that the way USDA distributed payments led to producers in different regions receiving different payments for the same crop.
Farmers in the South benefited the most, according to the report, while farmers in the Northeast and West received the least amount in payments.
At the time, the widely varying payouts confused and irritated farmers, as well as local USDA employees who received limited training on the program and struggled to process applications and payments.
“We recommended better reviews and greater transparency in USDA analyses” going forward, the GAO said in a statement on Monday announcing the report.
The GAO recommended that USDA’s Office of the Chief Economist (OCE) be more transparent in its methodology process, as well as revise its processes for assessing the baselines by which farmers are granted aid.
OCE disagreed with the report’s findings and said its team did their job; that GAO’s recommendations should not be aimed at OCE; and that the problem was with policy decisions in which it was not involved, according to an Oct. 21 letter it sent to the GAO.
“The role of USDA’s Office of the Chief Economist is to provide data-driven analysis. They did that,” a USDA spokesperson said in a statement to Reuters. “What happened from that point on was in the hands of President Trump’s political appointees.”
WHEAT/CEPEA: Liquidity is low in the Brazilian market
Cepea, December 20 – Wheat sales have been low in the Brazilian market. While purchasers reported to have wheat enough until mid-January, farmers have no cash flow needs. Despite higher supply as the harvesting ended in Brazil, prices continue to rise, influenced by the dollar appreciation against the Real and the high import parity compared to neighbor countries.
IMPORTS – According to data from Secex, in the second week of December, wheat imports averaged 21.78 thousand tons per day, against 12.88 thousand tons in Dec/2020, a staggering 69% up. Import values averaged USD 292.1/ton FOB origin, 23.8% higher than that in the same period of 2020 (USD 236.0/ton).
Based on data from Conab (Brazil’s National Company for Food Supply), between December 6 and 10, the import parity price for the wheat from Argentina was at USD 327.94/ton (for the product delivered to Paraná State). Considering the average of the US dollar in that period, at BRL 5.5906, the wheat imported was sold at BRL 1,833.41/ton, while for the Brazilian wheat traded in Paraná, the average was lower, at BRL 1,639.90/ton, according to data from Cepea. In Rio Grande do Sul, the import parity for the product from Argentina would be of USD 307.70/ton (BRL 1,720.25/ton), against BRL 1,539.80/ton on the average of the state surveyed by Cepea.
Brazil’s Petrobras to start testing renewable diesel with customers in January
Brazil’s state-run oil company Petrobras PETR4.SA will start testing new renewable diesel based on co-processed edible oils with customers in January, while awaiting regulatory approval to sell it commercially, the company’s refining director told Reuters.
The tests are expected to take about six months and will be backed by a fuel distributor and a bus fleet owner, whose names are yet to be revealed, Petrobras’ refining director, Rodrigo Costa, said.
The oil giant had successfully tested the renewable diesel production system at its Repar refinery in mid-2020, but it sees the new testing phase as important in confirming its effectiveness.
Repar is currently capable of producing 114,000 tonnes per year of renewable fuel based on co-processed soybean oil.
LIVESTOCK SURVEY: U.S. Cattle on Feed Placements Seen Up 3.4%
November placements onto feedlots seen rising y/y to 1.97m head, according to a Bloomberg survey of ten analysts.
- That would be the second straight y/y increase after rising by 2.4% in October
- Marketings seen up by 4.4% y/y, following four straight months of declines
- Feedlot herd as of Dec. 1 seen mostly unchanged from a year ago at 12.04m head
- The USDA is scheduled to release its cattle on feed report at 3pm on Dec. 23
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.