Information produced by ADM Investor Services, Inc. and distributed by Stewart-Peterson Inc.
Wheat prices overnight are down 6 1/4 in SRW, down 5 1/2 in HRW, down 4 in HRS; Corn is down 3 3/4; Soybeans up 1 3/4; Soymeal up $0.47; Soyoil down 0.30.
Markets finished last week with wheat prices down 53 in SRW, down 43 1/2 in HRW, down 39 1/2 in HRS; Corn is down 8 3/4; Soybeans down 6 1/2; Soymeal up $0.19; Soyoil down 1.59.
For the month to date wheat prices are down 61 in SRW, down 40 in HRW, down 35 1/2 in HRS; Corn is down 1/2; Soybeans down 62 3/4; Soymeal down $11.50; Soyoil down 0.26.
Year-To-Date nearby futures are down -3% in SRW, up 5% in HRW, down -11% in HRS; Corn is up 5%; Soybeans up 12%; Soymeal up 11%; Soyoil up 20%.
Like what you’re reading?
Sign up for our other free daily TFM Market Updates and stay in the know!
Chinese Ag futures (JAN 23) Soybeans up 37 yuan; Soymeal up 19; Soyoil up 130; Palm oil up 178; Corn up 1 — Malaysian palm oil prices overnight were up 69 ringgit (+1.69%) at 4162.
There were changes in registrations (-50 Soyoil). Registration total: 2,653 SRW Wheat contracts; 0 Oats; 0 Corn; 0 Soybeans; 85 Soyoil; 71 Soymeal; 1 HRW Wheat.
Preliminary changes in futures Open Interest as of August 19 were: SRW Wheat up 339 contracts, HRW Wheat up 1,023, Corn up 1,691, Soybeans up 2,798, Soymeal up 1,699, Soyoil up 4,408.
The player sheet for Aug. 19 had funds: net buyers of 5,500 contracts of SRW wheat, buyers of 4,500 corn, buyers of 2,500 soybeans, sellers of 5,000 soymeal, and buyers of 3,000 soyoil.
- WHEAT PURCHASE: Japan will import 13,400 tonnes of feed-quality wheat for livestock use via a simultaneous buy and sell (SBS) auction that closed late on Friday, the Ministry of Agriculture, Forestry and Fisheries (MAFF) said. The ministry had sought 70,000 tonnes of feed wheat and 40,000 tones of feed barley to be loaded by Nov. 30 and arrive in Japan by Jan. 26, 2023.
- WHEAT TENDER: Iranian state agency Government Trading Corporation issued an international tender to purchase about 60,000 tonnes of milling wheat
- WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase 34,025 tonnes of grade 1 milling wheat to be sourced from the United States
- WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat.
- Basis bids for soybeans and corn shipped by barge to the U.S. Gulf Coast rose on Friday as exporters worked to extend coverage while rains threatened to delay the early harvest in the Mississippi River Delta, and China appeared to be booking U.S. soybeans, traders said.
- Forecasts called for above-normal precipitation south of Memphis, Tennessee, over the next 10 days.
- A late-week jump in barge freight costs supported the CIF basis for both crops. Empty barges on the Mississippi River at St. Louis for this week were offered Thursday at 450% of tariff, up from 410% a day earlier. Values were unchanged on Friday.
- For soybeans, CIF barges loaded in August traded Friday at 280 cents over November futures and were re-bid at 270 cents over futures, up 5 cents from Thursday’s last bid.
- September soy barges traded at 180 cents over futures and were re-bid at 175 cents over futures, up a nickel from Thursday. November soy barges traded at 121 cents over futures.
- FOB export premiums for first-half October soybean loadings, the first available delivery period, were around 200 cents over November, up 5 cents from Thursday, and last-half October premiums were around 175 cents over futures.
- For corn, CIF barges loaded in August were bid at 120 cents over CBOT September, up 6 cents from Thursday. September corn barges were bid around 103 cents over futures, up 2 cents.
- FOB corn export premiums for September loadings at the Gulf were nominally offered at around 135 cents over September, and October premiums held at around 143 cents over December, both unchanged from Thursday.
- CIF basis bids for hard red winter wheat at the Texas Gulf for August fell to 152 cents over K.C. September wheat KWU2 futures, down 5 cents from Thursday.
- China was believed to be buying U.S. soybeans from the Pacific Northwest as well as the Gulf, traders said. The U.S. Department of Agriculture on Thursday said China booked 779,000 tonnes of new-crop U.S. soybeans and 80,836 tonnes of old-crop soy in the week ended Aug. 11, their biggest weekly tally since April.
- Spot basis bids for soybeans delivered to crushing plants around the U.S. Midwest were mostly steady to higher on Friday on rising demand for spot supplies in some areas, while bids at soybean elevators were mostly flat, grain dealers said.
- The spot soybean basis rose by 25 cents a bushel at a processor in Lafayette, Indiana. The bid, for soybeans delivered by Sept. 2, was at least 55 cents a bushel higher than the bid for deliveries later next month.
- A corn processor in Blair, Nebraska, dropped its spot corn basis bid by 15 cents a bushel. The plant also lowered its basis by 15 cents on Thursday.
- Farmers and grain traders are looking ahead to a large Midwest crop tour next week for a glimpse at how summer weather has impacted corn and soybean harvest prospects in the U.S. farm belt.
- Spot basis bids for corn delivered to processing plants around the U.S. Midwest were mostly steady to lower on Friday, while bids at interior and river elevators were steady to firmer, dealers said.
- Spot soybean and wheat basis bids were mostly unchanged.
- Farmer sales of corn and soybeans remained muted on Friday as recent futures market declines have dragged prices below many growers’ targeted levels. Corn prices are about 20 cents a bushel below last week’s highs, while soybeans are down about 4% this week.
- The approaching Midwest harvest has weighed on corn basis values this week, particularly at ethanol facilities and processing plants. Spot corn basis bids at ethanol plants were down as much as 35 cents a bushel this week, and down 50 cents or more at other processors.
- Soybean processor basis values were mixed in the week as some plants boosted bids to attract spot supplies while others lowered bids amid a slowdown in crushing.
- Farmers and grain traders are looking ahead to a large Midwest crop tour next week for a glimpse at how summer weather has impacted corn and soybean harvest prospects in the U.S. farm belt.
- Spot basis bids for hard red winter wheat were mostly steady around the southern U.S. Plains on Friday as futures prices rebounded from a six-month low but farmer selling remained muted, grain dealers said.
- Spot basis bids for wheat delivered by rail to the Texas Gulf Coast for export were weaker amid a sluggish export pace.
- Southern Plains wheat belt farmers have sold a sizable share of their latest harvest earlier in the summer when prices were near multi-year peaks.
- The 2022 HRW harvest has average test weight and protein about 1% above last year, according to an analysis by Plains Grains Inc.
- Growers are preparing to plant their next crop beginning in about a month and some areas are in dire need of rain, particularly in Texas and western sections of Kansas and Oklahoma.
- Protein premiums for wheat delivered by rail to or through Kansas City were unchanged for all protein grades, according to the latest CME Group data.
- U.S. spot cash millfeed prices were unchanged on Friday after firming this week in several Midwest and Plains markets as a shortage of growth on grazing pastures continued to spur demand for supplemental livestock feed, dealers said.
- High costs for scarce supplies of freight restricted the amount of millfeed available for shipment from the eastern half of the country to western regions.
- Spot basis offers for soymeal delivered by rail or truck around the U.S. Midwest were mostly steady to weaker on Friday on rising supplies in spots as some processors resumed crushing after recent seasonal maintenance downtime, dealers said.
- A steeply inverted soymeal futures market has kept a lid on spot basis offers as the September contract nears its delivery period and processors prepare to roll their basis to the October contract, a dealer said.
CFTC Money Managers’ Commodity Positions for Aug. 16
U.S. Cattle on Feed Rose to 11.22M Head on Aug. 1
India says not planning to import wheat
India has sufficient stocks of wheat and there is no plan to import the grain, the government clarified on Sunday after some media outlets reported New Delhi was planning to import wheat.
Local wheat prices jumped to a record 24,453 rupees ($305.97) per tonne on Friday.
That was up nearly 16% from recent lows that followed the government’s surprise ban on exports on May 14, ending hopes India could fill the market gap left by missing Ukraine grain.
The rally in local prices has prompted traders to speculate that New Delhi would allow imports to augment supplies, which dwindled after the production was hit by a heatwave.
But Department of Food & Public Distribution in a Tweet said “There is no such plan to import wheat into India. Country has sufficient stocks to meet our domestic requirements and Food Corporation of India has enough stock for public distribution.”
India’s wheat procurement in 2022 fell 57% from a year ago to 18.8 million tonnes.
Wheat imports into India currently attract a 40% import duty. The overseas buying is not possible until government scraps the import tax, traders said.
Two Grain Ships Set to Leave Ukraine, More Are Inbound: JCC
Two more grain vessels are authorized to leave Ukrainian ports on Monday, the Joint Coordination Centre said Sunday in an emailed statement.
- The Great Arsenal will carry 25.5k tons of wheat to Egypt and the Maranta will carry 5.3k tons of corn to Greece
- Five inbound vessels were inspected on Sunday (Karteria, Safety Aga, Seajoy, Melarossa and DS Sophia), and three more inbound ships are due for inspection Monday (I Maria, Zumrut Ana and Ocean S)
- Total volume of Ukraine foodstuffs exported through the crop-export corridor, which began operating this month, now stands at 689,649 tons
Malaysia Aug. 1-20 Palm Oil Exports +9.09% M/m: Intertek
Malaysia’s palm oil exports rose 9.09% m/m during Aug. 1-20, according to Intertek Testing Services.
- Total exports for Aug. 1-20: 728,165 tons
- Crude palm oil exports: 161,065 tons, 22.1% of total
- EU led all destinations for total exports: 219,500 tons
China plans cloud seeding to protect grain crop from drought
The government says it will try to protect China’s grain harvest from record-setting drought by using chemicals to generate rain, while factories in the southwest waited Sunday to see whether they might be shut down for another week due to shortages of water to generate hydropower.
China says it will try to protect its grain harvest from record-setting drought by using chemicals to generate rain, while factories in the southwest waited Sunday to see whether they would be shut down for another week due to shortages of water to generate hydropower.
The hottest, driest summer since the government began recording rainfall and temperature 61 years ago has wilted crops and left reservoirs at half their normal water level. Factories in Sichuan province were shut down last week to save power for homes as air conditioning demand surged, with temperatures as high as 45 degrees Celsius (113 degrees Fahrenheit).
The coming 10 days are a “key period of damage resistance” for southern China’s rice crop, said Agriculture Minister Tang Renjian, according to the newspaper Global Times.
Authorities will take emergency steps to “ensure the autumn grain harvest,” which is 75% of China’s annual total, Tang said Friday, according to the report.
U.N. chief says Russian food and fertilizer must get to market
U.N. Secretary-General Antonio Guterres said on Saturday that governments and the private sector should cooperate to bring Russian food and fertilizers as well as Ukrainian grain to world markets under a deal agreed last month.
“The other part of this package deal is the unimpeded access to the global markets of Russian food and fertilizer, which are not subject to sanctions,” Guterres told a news conference in Istanbul. “It is important that all governments and the private sector cooperate to bring them to market.
“Getting more food and fertilizer out of Ukraine and Russia is crucial to further calm commodity markets and lower prices for consumers.”
SOYBEAN/CEPEA: Exports decrease raises stocks and presses down values
Soybean prices have faded in both the United States and Brazil this week. Devaluations are linked to a decrease in international trades, which resulted in higher ending stocks (2021/22 season) compared to the amount estimated last month. Besides, recent rains in the Northern Hemisphere have favored developing crops, bringing some relief to farmers.
According to a report from the USDA released on August 12, ending stocks (2021/22 season) in the USA were revised up to 6.12 million tons, 4.67% down from that forecast last month but still 12.47% up from that last season. It is important to highlight that the season ends this month in the USA.
American exports (between Sept/21 and late August/22) are estimated at 58.78 million tons, 2% down from that forecast last month and 4.67% below the volume shipped last season.
In Brazil, the USDA estimates the ending stocks in the 2021/22 season (which ends in October/22) at 22.7 million tons, a steep 22.77% down from that last season but still 1.1% up from that estimated in July. This is because of the lower exports estimates for Brazil this season, forecast at 80 million tons, 1.2% lower than that estimates last month and 2% below the volume exported in the 2020/21 season.
Lower trades in the international market are linked to the decrease in the demand from China, which is expected to import 90 million tons of soybean in the 2021/22 season, almost 10% down from that last crop and the lowest volume in the last three crops. The European Union is also expected to import the lowest amount in the last three seasons, estimated by the USDA at 14.6 million tons.
PRICES – In the Brazilian spot market, the ESALQ/BM&FBovespa Index Paranaguá (PR) and the CEPEA/ESALQ Index Paraná dropped by 2.7% and 2.1% between August 11 and 18, closing at BRL 184.38 (USD 35.64)/60-kilo bag and at BRL 179.27 (USD 34.65)/bag on August 18. It is important to consider that both Indexes are at the lowest levels since April, when the harvesting ends in Brazil. On the average of the regions surveyed by Cepea, prices decreased by 2.5% in the over-the-counter market (paid to farmers) and by 1.7% in the wholesale market (deals between processors).
CORN/CEPEA: High exports raise prices in BR, but supply constrains valuations
Corn prices have fluctuated in the Brazilian market this week. First, values increased in many of the regions surveyed by Cepea, influenced by valuations at ports and the good exports performance. However, price rises were constrained by the high availability of the second crop of corn. Besides, many consumers still have the product stocked.
Although sellers have high volumes to trade, they asked higher prices in some periods, aware of the corn valuations at ports, the slower harvesting in some regions – because of rains – and due to more room to stock the cereal.
Thus, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) rose by 0.2% between August 11 and 18, closing at BRL 82.10 (USD 15.87)/bag on Thursday, 18. On the average of the regions surveyed by Cepea, values dropped by 0.3% in the over-the-counter market (paid to farmers), but increased by 0.1% in the wholesale market (deals between processors).
PORTS – Between August 11 and 18, corn quotations decreased by 0.7% at the port of Paranaguá (PR), but rose by 0.9% at the port of Santos (SP). The 0.2% appreciation of the US dollar against the Real this week helped to underpin prices at the port of Santos. Some deals have been closed at around BRL 90.00/bag this week.
Currently, Conab estimates the second crop of corn to total 87.4 million tons, 44% higher than that last season. Exports are forecast at 37.5 million tons (Feb/22 – Jan/23) – so far, Brazil has shipped 10.9 million tons of corn, according to data from Secex.
CROPS – Despite the recent rains in most corn-producing regions, the harvesting is in progress, having totaled slightly over 86% by August 13, against 79.8% in the previous week and 68.5% in the same period of 2021, according to data from Conab.
Egypt to End Local Wheat Purchases by End of August
Egypt has bought about 4m tons of local wheat for the current season, the country’s supply minister said.
- The country has enough wheat to last seven months
- Sugar stockpiles are sufficient for six months and rice for about three months
Swelling Global Potash Inventories Signal Supply-Chain Refill
Global potash prices, already down 13% from 2Q’s record, may slip further in 4Q as farmers curb consumption and inventories continue to build. Prices will still be historically elevated, supporting efforts by Mosaic, K+S and Nutrien to boost capacity as western sanctions keep Belarus out of the market.
North American Potash Inventory Swells to Record
A growing potash glut in North America should push prices lower in 2H. Farmer margins are stretched by rising input costs as crop prices fail to keep pace. Cutting back on new potash purchases by turning to potash in the soil from previous applications is a strategy to reduce costs and improve profitability. North American potash inventory in June rose to 3.6 million K20 tons, 27% above average. Potash producers will pivot sales to Brazil, where they can get a $150-a-metric-ton premium to the North American market, easing the global supply gap left by sanctioned Belarus. This year, we expect Belarus to export 4.5 million tons of potash, down about 60% from 2020’s 11.8 million. Western sanctions on Belarus have eliminated the main export route.
Fertilizer Price Relief on the Horizon as Farmers Assess 4Q Use
Most nitrogen prices are up after aggressive summer fills yet are down sharply from spring highs, portending relief ahead of the US fall season. Corn Belt retail ammonia costs are down 30% since July 1, while corn prices are strengthening, which should fuel robust fall application. Brazilian urea, phosphate and potash prices are down on full warehouses and muted demand.
European Gas Takes Center Stage
European natural gas was in the spotlight this week as it settled at a record high for a second day on Aug. 19 after Russia’s Gazprom said it will stop the key Nord Stream pipeline for three days of maintenance. Though the news heightens concerns that more of Europe’s ammonia production will go offline, prices on the continent have remained stable amid reliance on cheaper imports. The lack of a urea tender from India pressured that market. US pricing was stable-to-soft for urea, phosphate and potash, yet it plummeted in Brazil, which has attracted plentiful imports due to its high prices.
Phosphate price weakness was also apparent internationally, with declines in China, India, Brazil and the Arab Gulf.
Brazil Urea Prices Drop as Producers Compete for Demand
After increasing 16% in recent weeks, nitrogen prices in Brazil dipped as much as 9% in mid-August as international suppliers fight for demand. The decline neutralized high natural gas prices that have exerted upward pressure on nitrogen markets. Brazil’s potash and phosphate prices also fell further as buyers pull back on imports due to oversupply.
Urea Plunges on Oversupply; Phosphate Imports Slow
Urea prices plunged in Brazil this week amid slow demand and signs of oversupply, neutralizing natural gas price hikes and supply constraints that threaten Europe’s ammonia production. Urea’s drop of $60 a metric ton partly offsets a 16% gain in the past three weeks, as international suppliers compete for Brazilian demand. India’s tender expectations were postponed to early September and Brazil’s port inventories are high — a favorable scenario to pursue discounts. Potash and phosphates prices are also dropping, with additional discounts likely as importers pull back on purchases. MAP weekly imports slid more than 60% in August vs. June-July arrivals.
The soybean-planting season starts in September, and logistics bottlenecks are a key concern. Winter preparations for corn will likely be delayed until 4Q.
US Pork Production Up 2.7% This Week, Beef Rises: USDA
US federally inspected pork production rises to 505m pounds for the week ending Aug. 20 from 491m in the previous week, according to USDA estimates published on the agency’s website.
- Hog slaughter up 3% from a week ago to 2.395m head
- Beef production up 2.2% from a week ago, cattle slaughter rises 2.2%
- For the year, beef production is 0.9% above last year’s level at this time, and pork is 2.9% below
This commentary is provided by ADM Investor Services, a futures brokerage firm and wholly owned subsidiary of ADM Company. ADMIS has provided expert market analysis and price risk management strategies to commercial, institutional and individual traders for more than 50 years. Please visit us at www.admis.com or contact us at firstname.lastname@example.org to learn more.
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 Archer Daniels Midland Company. 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.
This message may contain confidential or privileged information, or information that is otherwise exempt from disclosure. If you are not the intended recipient, you should promptly delete it and should not disclose, copy or distribute it to others.