Canola Jumps By Exchange Limit for Third Day on Parched Prairies
Wheat prices overnight are down 6 3/4 in SRW, down 9 3/4 in HRW, down 3 1/4 in HRS; Corn is down 1 1/2; Soybeans up 1 1/4; Soymeal down $0.68; Soyoil up 1.66.
For the week so far wheat prices are up 19 in SRW, up 11 1/2 in HRW, up 39 3/4 in HRS; Corn is up 14 1/2; Soybeans up 22 1/4; Soymeal down $0.32; Soyoil up 3.09.
For the month to date wheat prices are down 45 1/2 in SRW, down 53 1/2 in HRW, up 4 1/4 in HRS; Corn is down 57; Soybeans down 47 1/2; Soymeal down $26.00; Soyoil up 1.26.
Chinese Ag futures (SEP 21) Soybeans up 12 yuan ; Soymeal up 24; Soyoil up 56; Palm oil down 24; Corn up 17 — Malasyian Palm is up 109. Malaysian palm oil prices overnight were up 109 ringgit (+2.82%) at 3972 advancing to its highest close in five weeks, with tight global supplies of edible oils and a lower production outlook from Malaysia, the second-largest grower, supporting the market.
Midwest corn, soybean and winter wheat forecasts: West: Scattered showers south Monday. Isolated showers north Tuesday. Scattered showers Wednesday-Thursday, south Friday. Temperatures near to below normal through Friday. East: Scattered showers through Friday. Temperatures near to below normal Monday, near to below normal west and near to above normal east Tuesday, near to above normal Wednesday-Friday. 6 to 10 day outlook: Scattered showers south Saturday-Monday. Mostly dry Tuesday-Wednesday. Temperatures near to above normal Saturday-Wednesday.
The player sheet for 7/12 had funds: net buyers of 14,500 contracts of SRW wheat, buyers of 13,000 corn, buyers of 11,000 soybeans, buyers of 2,000 soymeal, and buyers of 5,500 soyoil.
Preliminary changes in futures Open Interest as of July 12 were: SRW Wheat up 2,326 contracts, HRW Wheat up 3,309, Corn down 2,857, Soybeans down 465, Soymeal down 927, Soyoil down 853.
There were no changes in registrations. Registration total: 20 SRW Wheat contracts; 0 Oats; 0 Corn; 13 Soybeans; 388 Soyoil; 407 Soymeal; 1,288 HRW Wheat.
TENDERS
- WHEAT PURCHASE: Saudi Arabia’s main state wheat buying agency the Saudi Grains Organization purchased around 505,000 tonnes of wheat in an international tender for an average price of $287.00 a tonne c&f.
- CORN PURCHASE: South Korea’s Nonghyup Feed Inc. (NOFI) is believed to have purchased around 68,000 tonnes of feed corn in an international tender. It was bought at an estimated premium of 237.39 U.S. cents c&f over the Chicago December corn contract CZ1 plus a $1.75 a tonne surcharge for additional port unloading.
- CORN, WHEAT PURCHASE: South Korea’s Major Feedmill Group purchased an estimated 69,000 tonnes of corn and 65,000 tonnes of animal feed wheat in a private deal. (Full Story)
- CORN TENDER UPDATE: The Korea Feed Association is believed to have rejected all offers and made no purchase in a tender on Monday to buy up to 69,000 tonnes of corn.
- CORN TENDER UPDATE: South Korea’s Major Feedmill Group is believed to have rejected all offers and made no purchase in an international tender to buy up to 140,000 tonnes of corn.
- WHEAT TENDER PASS: A group of importers in the Philippines is believed to have rejected all offers and made no purchase in a tender for up to 200,000 tonnes of animal feed wheat which closed on Thursday
PENDING TENDERS
- WHEAT TENDER: Turkey’s state grain board TMO has issued an international tender to purchase a total of about 395,000 tonnes of milling wheat
- FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday that it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by Oct. 31 and arrive in Japan by Dec. 23, via a simultaneous buy and sell (SBS) auction that will be held on July 14.
- 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: The Taiwan Flour Millers’ Association has issued an international tender to purchase about 55,000 tonnes of grade 1 milling wheat to be sourced from the United States, European traders said on Tuesday.
China June Soybean Imports 10.722m Tons: Customs
General Administration of Customs says on website.
- Soybean imports YTD rose 8.7% y/y to 48.955m tons
- Edible vegetable oil imports in June 1.016m tons
- Edible vegetable oil imports YTD rose 32.2% y/y to 5.794m tons
- Meat (including offal) imports in June 743,000 tons
- Meat (including offal) imports YTD rose 7% y/y to 5.078m tons
USDA CROP PROGRESS: Corn Conditions 65% G/E, Soybeans 59%
Highlights from the report:
- Corn 65% G/E vs 64% last week, and 69% a year ago
- Corn dough 3% vs 3% a year ago
- Corn silking 26% vs 10% last week, and 26% a year ago
- Soybeans 59% G/E vs 59% last week, and 68% a year ago
- Soybeans blooming 46% G/E vs 29% last week, and 46% a year ago
- Spring wheat 16% G/E vs 16% last week, and 68% a year ago
- Winter wheat harvest 59% vs 45% last week, and 66% a year ago
- Cotton 56% G/E vs 52% last week, and 44% a year ago
- Sorghum 70% G/E vs 72% last week, and 46% a year ago
Canola Jumps By Exchange Limit for Third Day on Parched Prairies
- Futures surge 20% in five days on concern over Canadian crop
- Wheat and corn retreat in Chicago following USDA report
Canola futures climbed the most allowed by the exchange for a third straight session as hot, dry weather bakes fields in top grower Canada.
Prices on ICE Futures U.S. have jumped 20% in five days and reached C$949 ($761) per ton on Tuesday, a record for a most-active contract. There’s a chance for light showers in parts of Manitoba and Alberta this week, but heat and arid weather otherwise will keep “significant stress” on Canada’s canola and spring wheat, forecaster Maxar said in a note. European futures for rapeseed, a similar crop, are also nearing a fresh all-time high.
Drought Hurts Wheat; China Soy Demand Takes Hit: WASDE Takeaways
- GREAT DIVIDE: Spring wheat and canola are surging while corn and soybeans are lagging those gains. That’s because areas of the northern U.S. Plains and the Canadian Prairies, where spring wheat and canola are grown, are stuck in a hot drought while rains have continued to benefit much of the corn- and soybean-growing areas in the Midwest. This dynamic has been true for weeks and USDA didn’t change that course with its report Monday. In U.S. grain trading, spring wheat in Minneapolis was the biggest gainer while canola traded on the ICE Futures U.S. exchange are again at the highest price since at least 1982.
- MORE ON WHEAT: Global supplies are tightening up more than analysts had expected, with smaller crops in the U.S., Russia and Kazakhstan partly to blame as thirsty spring varieties of the grain battle lack of rain.
- RICE: USDA also cited drought as having an impact on rice in California, pointing to a fairly steep drop in acreage in the state from the planting report in June. Still, rice futures on the CBOT are fairly flat.
- CHINA BEAN DEMAND: USDA reduced its forecast for China soybean imports, a “negative surprise,” said Pedro Dejneka, partner at MD Commodities in Chicago.
- CORN APPETITE: The corn-export outlook for the U.S. was raised 50 million bushels from last month to 2.5 billion bushels, with “sharply lower exports expected for Brazil” amid drought and frost in the South American country.
USDA Cuts Production Forecast for Spring Wheat Due to Drought
Spring wheat is the biggest gainer after the U.S. Department of Agriculture released its monthly WASDE report, up over 4%.
- Production of “other” spring wheat, which is mainly what’s traded on the Minneapolis exchange, is expected to be down 41% from a year ago, per USDA:
- “Based on July 1 conditions, yields are expected to average 30.7 bushels per harvested acre, down 17.9 bushels from 2020. If realized, this would be the lowest yield since 2002 for the United States.”
- The big reason for the lower output of the wheat used in pizza dough is the severe drought conditions affecting the Northern Plains, the USDA said. “Partially offsetting this decrease is higher winter wheat production, both on increased harvested acreage and a higher yield,” the agency said in the report.
- It’s not just the U.S. — global supplies are tightening up more than analysts had expected. That’s partially due to smaller crops in Russia and Kazakhstan — where spring varieties are all grappling with drought.
U.S. Inspected 994k Tons of Corn for Export, 201k of Soybean
In week ending July 8, according to the USDA’s weekly inspections report.
- Corn: 994k tons vs 1,236k the previous wk, 918k a yr ago
- Wheat: 424k tons vs 362k the previous wk, 660k a yr ago
- Soybeans: 201k tons vs 208k the previous wk, 483k a yr ago
U.S. Corn, Soybean, Wheat Inspections by Country: July 8
Following is a summary of USDA inspections for week ending July 8 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.
- China was the top destination for corn inspections
- Indonesia was the top destination for soybeans, Japan led in wheat
USDA’s FAS Cuts Argentina Soybean Crop Estimate to 44.5m Tons
The outlook for the 2020-21 Argentina soybean crop is 2.5m tons below the USDA’s official estimate, the agency’s Foreign Agricultural Service says in a report posted Friday.
- Export forecast is lowered to 5m tons, 1.35m tons below the USDA’s official estimate
- “Logistical difficulties, the return of the differential export tax between soybeans and soy products, and producers’ desire to stockpile beans will continue to reduce the competitiveness of Argentine whole soybeans versus other origins”
- For the 2021-22 season, soybean crop is seen at 51.2m tons, below official USDA estimate of 52m tons
French Soft-Wheat Sales Outside the EU to Rise 40% Y/y: AgriMer
France’s exports of soft-wheat to non-EU nations are estimated at 10.5m tons in the season that started this month, crops office FranceAgriMer said in its first outlook for the 2021-22 year.
- That compares with 7.5m tons in the prior season and would be a two-year high
- Total exports seen at 17.9m tons
- End-of season stockpiles are seen at 3.68m tons, up 39% y/y and the biggest in at least eight years
- BARLEY
- Exports outside the EU seen at 3.3m tons, up 3.1% y/y
- Total exports pegged at 5.82m tons, up 3.3%
- Stockpiles estimated at 1.34m tons, up 16% and a two-year high
- CORN
- Stockpiles in 2020-21 are seen at 1.86 tons, up from a June estimate for 1.8m tons
- No outlook yet given for the 2021-22 year
Ospraie Chief Says Crop Rally Likely Over Barring Weather Jolt
Corn and soybeans aren’t likely to reach new price heights anytime soon unless serious bad farm weather swoops in, according to Dwight Anderson, founder of New York-based asset management firm Ospraie Management LLC.
Russia boosts grain exports 14% in past farming year to 49.8 mln tonnes – Grain Quality Assessment Center
Russia exported 49.8 million tons of grain crops last year (July 2020-June 2021), which is 14% more than a year earlier, the Grain Quality Assessment Center (part of Rosselkhoznadzor) said, citing Center head Yulia Koroleva.
On the whole, exports including processed products were up 10% to 58.7 million tons.
As reported, the Agriculture Ministry is forecasting grain export in the past farming year at more than 48 million tons. According to preliminary data, as of July 1, grain exports (excluding EAEU countries for May-June) amounted to 47.8 million tons, which is 12.7% more than in the same period of the previous season (42.4 million tons). As for wheat, the indicator reached 37.2 million tons (up 10%), barley – 6.1 million tons (up 37.8%) and corn – 4 million tons (up 2.9%). In the current farming year, exports are estimated at 51 million tons.
Ukraine exports 575,000 tonnes of grains and legumes since early 2021/2022MY – Ukraine General Newswire
Ukraine since the beginning of the 2021/2022 marketing year (MY, July-June) and as of July 12 had exported 575,000 tonnes of grain and leguminous crops, which is 20% less than on the same date of the previous MY.
According to the information and analytical portal of the agro-industrial complex of Ukraine, to date, 210,000 tonnes of wheat (32% more compared to the same date 2020/2021MY), 340,000 tonnes of corn (8.1% less), 18,000 tonnes of barley (10.3 times less), and 2,700 tonnes of flour (four times less) have been exported.
According to preliminary data of the Ministry of Agrarian Policy, Ukraine exported 44.63 million tonnes of grain and leguminous crops in the 2020/2021MY, which is 21.3% less than in the 2019/2020 MY. Exports of wheat over the specified period decreased by 18.9%, to 16.44 million tonnes, corn – by 23.9%, to 23.06 million tonnes, barley – by 17.1%, to 4.21 million tonnes, flour – 2.6 times, to 126,000 tonnes.
According to the Ministry of Agrarian Policy, Ukraine exported 56.72 million tonnes of grain and legumes in the 2019/2020 MY.
UkrAgroConsult Raises Ukraine Wheat Outlook; Concerns for Corn
Ukraine’s wheat harvest this year is now seen at 29.5m tons, up from last month’s estimate of 28.8m tons, Kyiv-based analyst UkrAgroConsult says in an emailed report.
- Outlook for barley production also raised to 8.8m tons, from 8.4m tons
- Precipitation has helped crops, but excess rains in some areas could herald a larger proportion of feed-quality wheat
- For corn, crops will enter the key pollination phase in 2H July and some regions are expected to lack moisture, which could weigh on yields
- High global corn prices also means local consumption of the grain will likely ebb, in favor of cheaper wheat and barley
- UAC cuts outlook for 2021-22 wheat exports to 20.8m tons, from 21.2m tons
Calls mount for Indonesia to extend oil palm moratorium – The Jakarta Post
Environmentalists and farmers are urging President Joko “Jokowi” Widodo to extend the moratorium on new oil palm plantation permits as part of the country’s efforts to manage the commodity more sustainably.
The moratorium was established through a Presidential Instruction (Inpres) issued in September 2018. It required government agencies to stop granting new licenses for oil palm concessions and to review existing plantations.
The policy was expected to improve palm oil governance, including by clearing up uncertainties about smallholders’ rights and boosting productivity on existing plantations. The moratorium is slated to expire in September of this year.
Environmental group Greenpeace Indonesia said it was important for the government to extend the ban because the world still questioned palm oil’s environmental impact and sustainability.
India’s Palm Oil Imports in June Slump 23.7% M/m, Group Says
Purchases by the world’s biggest palm oil importer fell to 587,467 tons from 769,602 tons in May, according to the Solvent Extractors’ Association of India.
- Soybean oil imports dropped to 206,262 tons from 267,781 tons
- Purchases of sunflower oil little changed at 175,702 tons
- Total vegetable oil imports, including non-edible oil, fell to 996,014 tons from 1.25m tons in May
- Edible oil stockpiles on July 1 totaled 1.99m tons, compared with 1.96m tons at the start of June
Palm oil prices in India rise even after government cut import tax: SEA – Accord Fintech (India)
Trade body of Indian vegetable oil refiners and traders — the Solvent Extractors’ Association of India’s (SEA’s) executive director B.V. Mehta said palm oil prices in India have risen more than 6% even after the government cut import tax and allowed shipments of refined palm oil as its price overseas jumped in anticipation of strong demand from the world’s biggest buyer. Higher palm oil prices could weigh on Indian demand and may prompt the government to refrain from cutting import taxes further as the price rise highlighted the limitation of duty reduction.
According to data compiled by the SEA, landed cost of crude palm oil in India have risen to $1,085 per tonne from $1,020 per tonne on June 29. During the period, prices of refined palm oil went up to $1,055 per tonne from $1,020 per tonne. India cut import tax on CPO as domestic prices nearly doubled in the past year, hitting consumers already stung by record fuel prices and reduced incomes amid the COVID-19 pandemic.
Drought Pushes U.S. Oat Crop to Lowest in Records Back to 1866
As drought conditions bake the upper reaches of the U.S. Plains, American farmers are now expected to harvest their smallest oats crop in records that go back to 1866.
- Heat and dry weather are sapping yield potential in key growing states. This year’s U.S. harvest is estimated at 41.3 million bushels, the smallest ever, Department of Agriculture data showed Monday. The outlook is down from the agency’s June estimate of about 53 million bushels.
- The USDA’s downgrade to the oats harvest is the latest example of abnormally hot and dry weather taking a toll on food production. Wheat futures have been surging and canola prices notched all-time highs amid a lack of rain in growing regions running along the U.S.-Canada border.
- The dry conditions come after years of falling oats acreage as U.S. grain growers swapped it out for more profitable crops such as corn. This year’s low harvest compares with a peak of 1.15 billion bushels back in the 1960-61 season.
- With the U.S. growing fewer oats, buyers are heavily dependent on imports, mostly from Canada. But that country is also suffering from dryness. Canada’s oat harvest this year could total about 268.7 million bushels, down nearly 15% from a year ago.
- One saving grace might be more consumers going back to restaurants for breakfast, instead of preparing oats at home, as restrictions ease from the coronavirus pandemic.
Water Is Biggest Challenge to Food Security, Calif. Ag Sec. Says
Global water availability is the biggest challenge to food security as we look at the next decades of agricultural production, California Agriculture Secretary Karen Ross says Monday at the Agri-Pulse Ag & Food Policy Summit West.
Monsoon Rains Cover Entire India Five Days Later Than Normal
The southwest monsoon has advanced into the remaining parts of India, including Delhi, Uttar Pradesh and Punjab, according to the India Meteorological Department.
- Normal date for the monsoon to cover the entire country is July 8, the weather department said in a statement
- Last year, monsoon rains had reached to all parts of the country by June 26
Extreme Weather in China Could Damage Corn and Rice Crops in 2H
China is expected to witness extreme weather conditions in the second half of 2021, with frequent floods and droughts seen damaging autumn grain crops, including corn, rice and soybeans, according to an official report Tuesday.
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.