Information produced by ADM Investor Services, Inc. and distributed by Stewart-Peterson Inc.

 

Wheat prices overnight are down 10 in SRW, down 8 1/4 in HRW, down 7 1/2 in HRS; Corn is down 5 1/4; Soybeans down 13 1/2; Soymeal down $0.20; Soyoil down 0.73.

Markets finished last week with wheat prices down 19 3/4 in SRW, down 12 in HRW, down 1 1/4 in HRS; Corn is down 4 1/4; Soybeans down 1 1/4; Soymeal up $0.50; Soyoil up 3.95.

For the month to date wheat prices are down 80 3/4 in SRW, down 51 1/2 in HRW, down 28 in HRS; Corn is up 1 1/2; Soybeans up 15 1/2; Soymeal up $12.90; Soyoil up 9.21.

Year-To-Date nearby futures are up 9% in SRW, up 17% in HRW, down -3% in HRS; Corn is up 14%; Soybeans up 4%; Soymeal up 1%; Soyoil up 26%.

 

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 down 31 yuan; Soymeal down 12; Soyoil up 4; Palm oil down 86; Corn up 12 — Malaysian palm oil prices overnight were up 5 ringgit (+0.12%) at 4101.

There were no changes in registrations. Registration total: 3,080 SRW Wheat contracts; 0 Oats; 0 Corn; 5 Soybeans; 96 Soyoil; 296 Soymeal; 40 HRW Wheat.

Preliminary changes in futures Open Interest as of October 21 were: SRW Wheat up 600 contracts, HRW Wheat up 429, Corn up 8,814, Soybeans down 20,081, Soymeal up 2,998, Soyoil up 4,966.

Northern Plains Forecast: A system started to move into the region over the weekend with increasing winds and areas of precipitation, turning to snow across Montana and the western Dakotas. The system will continue through Monday with winds and mixed precipitation. An active pattern will bring through occasional rounds of showers and systems with strong winds at times for the next couple of weeks. The remaining harvest may have some difficulty.

Central/Southern Plains Forecast: Winds increased substantially on Sunday as a low-pressure system moved out of the Rockies and into the Northern Plains. Wind gusts of 50-60 mph were common across eastern Colorado and Kansas, with slightly lower wind gusts elsewhere. The winds likely caused some blowing dirt and sand, which may have buried newly planted wheat. The system has yet to bring about much precipitation, but will ingest the remnants of Hurricane Roslyn which will make for heavier precipitation across eastern areas Monday into Tuesday. Western areas stay drier. Another system will move through later this week with scattered showers that could offer some benefits to wheat, including western areas. An active pattern continues for the next two weeks with occasional periods of showers moving through, which may be helpful.

Western Midwest Forecast: Warm and dry conditions over the weekend turn much more active as a system over the Plains moves its cold front through the region Sunday night through Wednesday. While not very cold, temperatures will fall back toward normal and scattered showers and thunderstorms will move through, which may disrupt the remaining harvest. This is the start of a more active period for the next two weeks with periods of showers moving through.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Mostly dry Monday-Tuesday. Isolated showers Wednesday-Thursday. Mostly dry Friday. Temperatures near to below normal through Tuesday, near to above normal Wednesday-Friday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers north through Wednesday. Scattered showers Thursday-Friday. Temperatures near to below normal through Friday.

Argentina Grains & Oilseeds Forecast: A front brought a few showers to southeastern areas of the country over the weekend, but amounts were light. Despite a couple of systems moving through over the next week with scattered showers, the drought continues to have a huge influence on winter wheat and corn and soybean planting and establishment.

The player sheet for Oct. 21 had funds: sellers of 2,500 soybeans, buyers of 2,000 soymeal, and  buyers of 4,500 soyoil.

TENDERS

• WHEAT SALE: The Turkish Grain Board bought 495k tons of red milling wheat in a tender that closed Friday, according to traders who asked not to be identified.
• WHEAT PURCHASE: Saudi Grains Organization buys 566K tons of hard milling wheat (12.5% protein) for arrival in March–April . Total average price $384.75 CIF.
• FEED WHEAT TENDER: A group of importers in Thailand has issued an international tender to purchase up to 180,000 tonnes of animal feed wheat, European traders said. The deadline for submission of price offers in the tender is Oct. 21. Offers have now been submitted and are being considered, they said.

PENDING TENDERS

• RICE TENDER: South Korea’s Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 90,100 tonnes of rice sourced from the United States, Vietnam and other origins, European traders said. The deadline for submissions of price offers in the tender is Oct. 19, they said.
• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat, an official source said. The deadline for submission of price offers in the tender is Oct. 25.
• WHEAT TENDER: A government agency in Pakistan has issued a new international tender to purchase and import 500,000 tonnes of wheat, European traders said. The deadline for submission of price offers in the tender from the Trading Corporation of Pakistan is Oct. 26.
• BARLEY TENDER: Jordan’s state grain buyer is seeking 120,000 tonnes of barley in an international tender with the deadline set for Oct. 26, a government source said.
• WHEAT TENDER: Algeria’s state grains agency is seeking 50k tons of soft wheat for Mostaganem or Tenes ports, according to a copy of the tender document seen by Bloomberg.
• WHEAT TENDER: Iraq’s state grains buyer has issued a tender to buy a nominal 50,000 tonnes of hard milling wheat, European traders said. The deadline for submission of price offers in the tender is believed to be Oct. 24 with traders saying offers will remain valid until Oct. 27.

US BASIS/CASH

• Basis bids for corn and soybeans shipped by barge to U.S. Gulf export terminals were steady to higher on Friday due to limited spot supplies and higher freight costs, traders said.
  • Historically low water on the lower Mississippi River has halted grain barge shipments at times as dredging operations attempt to deepen the navigation channel to prevent boats from getting stuck on the river bottom. The disruptions have limited the amount of grain available to Gulf exporters and driven up export costs to uncompetitive levels.
  • Spot river freight rates jumped on Friday on tight spot supplies of empty barges and fresh demand to move soybeans to the Gulf after active buying by China this week for export in November and December. BG/US
  • Many exporters are not willing to sell any additional export grain for October and November as supplies were likely to be limited. Costs for December exports have also spiked.
  • Some exporters are tapping rail-delivered grain or moving supplies through other ports until river shipping woes abate.
  • Soybean barges loaded in October were bid around 255 cents over November futures, up about 30 cents from late Thursday. November barges were bid 15 cents higher at 220 cents over futures.
  • Basis bids for October barge loadings of corn were 20 cents higher at 230 cents over December futures. November corn barges were bid 20 cents higher at 190 cents over.
  • Export premiums for soybeans shipped in first-half December were up 15 cents at around 250 cents over November futures, and last-half shipments were 235 cents over futures, up 5 cents.
  • Early December corn shipments were nominally quoted around 225 cents over futures, while last-half December loadings were 195 cents over, both up 10 cents.
• Spot basis bids for corn and soybeans were mostly steady to firmer in the U.S. Midwest on Friday, supported by strong processor demand as farmers continued to harvest both crops, dealers said.
  • The corn basis firmed by a nickel at Blair, Nebraska, site of a large processor, as end-users competed for bushels with rail markets and elevators steering grain to the drought-hit Plains cattle feeding market. The corn basis rose by 15 cents a day earlier at Decatur, Illinois, another processing hub.
  • The soybean basis firmed by 10 cents at Lafayette, Indiana, site of a soy crushing facility, reflecting brisk demand for soybeans from processors taking advantage of historically high crush margins.
  • The exception to the firm trend was Morris, Illinois, on the Illinois River, where the corn basis weakened by 5 cents, after firming by the same amount a day ago.
  • Low water levels on the Mississippi River are likely to persist this winter as drier-than-normal weather is expected across the southern United States and Gulf Coast, U.S. government forecasters said. Low water has slowed the movement of river barges carrying of grain, fertilizer and other commodities this autumn.
• Spot basis bids for hard red winter (HRW) wheat held steady in the southern U.S. Plains on Friday while protein premiums firmed, dealers said.
  • Farmer sales of wheat were light this week as producers focused on harvesting fall crops including corn, soybeans and sorghum while planting the 2023 winter wheat crop into drought-hit soils.
  • Forecasts for rains in portions of the Plains over the next 10 days could improve growth in nearly two-thirds of the production belt, the Commodity Weather Group said in a daily note.
  • Premiums for wheat delivered by rail to or through Kansas City rose by 4 to 5 cents per bushel for wheat with “ordinary” protein up to 11.4% protein, and premiums rose by 10 cents for wheat with 11.6% through 12.6% protein. Premiums were unchanged for wheat with higher protein levels.
• Spot basis bids for corn were mostly steady to firmer on Friday, rising at ethanol plants and at the Decatur, Illinois, grain hub as processors competed for bushels with rail markets and elevators steering corn to the drought-hit Plains cattle feeding market, dealers said.
  • Farmer sales of corn and soy have been generally active this month as the U.S. harvest advances, although supplies fell short of demand in some areas.
  • One exception to the firm trend was a corn processing plant at Cedar Rapids, Iowa, where the spot basis weakened for a fourth straight day, to 25 cents under December futures contract. The basis at the plant started the week at 5 cents over futures.
  • For soybeans, basis bids were steady to higher this week, supported by demand from domestic soy processors who need replacement soybeans to take advantage of surging crush margins.
  • Meanwhile, low water levels continues to slow barge traffic on the Mississippi River, and problems are likely to persist this winter as drier-than-normal weather is expected across the southern United States and Gulf Coast, U.S. government forecasters said on Thursday.
• Spot cash millfeed values held mostly steady around the United States on Friday, amid slowing demand and rising supplies in some markets, dealers said.
  • Flour mills in the Midwest and Plains have stepped up operations after slower-than-normal run rates over recent weeks. The accelerated milling has boosted supplies of millfeed and pressured prices.
  • Demand from some end users has also slowed as elevated millfeed prices prompted some to switch to cheaper feed ingredients.
  • Deferred millfeed shipments were at a premium to spot shipments as supplies were expected to tighten around the holiday weeks in November and December.
• Spot basis offers for U.S. soymeal were steady to weaker in the Midwest interior on Friday as strong crush margins encouraged processors to churn out supplies, but basis bids and offers firmed at the Gulf Coast export market, dealers said.
  • The spread of bird flu in poultry flocks was curbing demand, one broker said this week. Soymeal is a key ingredient in poultry feed.
  • Soymeal basis offers fell by $3 per ton at a Decatur, Indiana, crushing plant. Basis offers for truckloads of soymeal fell earlier this week at competing crushing plants in Frankfort, Claypool and Lafayette, Indiana.

Meanwhile, CIF Gulf basis bids and FOB offers for soymeal firmed. Weekly U.S. soymeal export sales reported by the U.S. Department of Agriculture on Thursday, at 542,300 tonnes, were at the high end of trade expectations.

China’s September Agricultural Imports 

• Sept. Corn Imports 1.53M Tons, -56.6% Y/y
  • YTD corn imports fell 25.9% y/y to 18.46m tons
• Sept. wheat imports 370,000 tons, -42.2% y/y
  • YTD wheat imports fell 12.8% y/y to 6.62m tons
• Sept. sugar imports 780,000 tons, -10.7% y/y
  • YTD sugar imports fell 8.7% y/y to 3.5m tons
• Sept. cotton imports 90,000 tons, +19.4% y/y
  • YTD cotton imports fell 21.2% y/y to 1.46m tons
• Sept. edible palm oil imports 610,000 tons, +26.2% y/y
  • YTD edible palm oil imports fell 47.6% y/y to 1.79m tons
• Sept. rice imports 490,000 tons, +29% y/y
  • YTD rice imports rose 41.1% y/y to 5.05m tons
• Sept. barley imports 360,000 tons, -76% y/y
  • YTD barley imports fell 48.8% y/y to 4.41m tons
• Sept. sorghum imports 920,000 tons, +41.8% y/y
  • YTD sorghum imports rose 21.4% y/y to 8.93m tons
• Sept. pork imports 150,000 tons, -26.5% y/y
  • YTD pork imports fell 61.2% y/y to 1.22m tons
• Sept. beef imports 250,000 tons, +12.2% y/y
  • YTD beef imports rose 11.8% y/y to 1.94m tons
• Sept. fertilizer exports 3.14m tons, -5.8% y/y
  • YTD fertilizer exports fell 33.8% y/y to 17.27m tons

Argentina Wheat Exports Seen $1.2b Lower After Drought: Rosario

With a drought withering plants before the harvest, Argentina’s 2022-23 wheat exports are now set to be worth $3.1b, 28% less than the $4.3b forecast at the start of the season in July, the Rosario Board of Trade says in a weekly newsletter.

• NOTE: Wheat export dollars are a crucial bridge for central bank reserves until the second quarter, when hard currency from soybean shipments rolls in
• Wheat exports last season were $4.6b
• Production is estimated at 15m metric tons, which would be the least in seven years
• CORN:
  • Corn planting in Argentina has made its slowest start to any season on record, both in absolute and relative terms
  • Farmers have 6.6m hectares (16.4m acres), or 83%, of the crop left to plant
• NOTE: It’s been too dry for most growers to get “early” corn in the ground, so they’re switching to a “late” crop
  • Around 200,000 ha would also be turned over to soybeans, according to the Buenos Aires Grain Exchange
• SOY:
  • Soy shipments in October are on course to reach 5.2m tons, which would be the most for any October since 2007, after a temporary FX devaluation spurred farmer sales
  • Sales to exporters have slowed to a crawl since the measure expired on Sept. 30

Brazil 2022/23 Summer Corn Output Est. at 25.2M Mt: Safras

Estimate is above the 21.9m mt harvested in 2021/22, according to consulting firm Safras & Mercado.

• Total area for the 2022/23 summer crop seen at 4.2m ha, 4.3% lower than the in the previous season
  • Average productivity seen at 6,008 kilograms/ha
• The 2022/23 total output is seen at 126.3m mt, above the 119.5m mt harvested in 2021/22
  • Average productivity seen at 5,868 kilograms/ha
• Winter crop is seen at 87.8m mt, above the 84.4m mt in the previous season
  • Average productivity seen at 5,642 kilograms/ha

SOYBEAN/CEPEA: With farmers focused on crop activities, liquidity is low in BR

Liquidity has been low in the Brazilian soybean market this week, and prices are fading. Farmers are focused on sowing the 2022/23 crop and are trying not to sell the remaining of the 2021/22 crop. Besides, the dollar depreciation and the decreases in the export premiums constrained deals too. Also, some agents opted to wait and sell higher volumes after the presidential election in Brazil.

For the coming weeks, despite the arrival of the American crop at the market, Brazilian agents expect the national soybean exports to China to increase, based on the low processing in the Asian country and the higher need for soybean meal. On the other hand, trading companies reported that the deals for shipment in the two coming months are over.

In the national spot market, between October 13 and 20, the ESALQ/BM&FBovespa Index Paranaguá (PR) and the CEPEA/ESALQ Index Paraná dropped by 1.7% and 1.2%, closing at BRL 184.44/bag and at BRL 180.59/bag on Thursday, 20. On the average of the regions surveyed by Cepea, prices increased by a slight 0.1% in the over-the-counter market (paid to farmers) but decreased by 0.3% in the wholesale market (deals between processors). The US dollar dropped by 1% in the last seven days, to BRL 5.224 on Thursday.

CROPS – The rains from September heartened Brazilian soybean farmers, however, these agents are now concerned about the high moisture in southern and southwestern Brazil, reducing or even interrupting crop activities. In some areas in southeastern Paraná, some crops need to be replanted. According to Conab, 21.5% of the national soybean crop had been sown by October 15th, less than the 23.7% from the same period last season.

CORN/CEPEA: High volume exported underpins quotations in BR

Corn prices have been firm in the Brazilian market, majorly underpinned by the high volumes being exported, the disinterest of part of the sellers and the interest of some purchasers in replenishing stocks.

The demand from abroad for the national corn continues high, although the harvesting has been faster in the United States. These purchasers are aware of both the lower supply in the European Union and in China – which were hit by the drought and are facing logistic issues – and the worse situation in Ukraine, which may hamper the exports from the Black Sea. Besides, the lack of rains in Argentina may lower the productive potential of the local crops.

Between October 13 and 20, on the average of the regions surveyed by Cepea, values increased by 0.4% in the wholesale market (deals between processors) but dropped by 0.2% in the over-the-counter market (paid to farmers). This month, quotations have increased by 0.6% and 0.1%, respectively.

In Campinas (SP), the ESALQ/BM&FBovespa Index for corn rose by 0.9% between October 13 and 20, to BRL 85.21 per 60-kilo bag on Thursday, 20. This month, the corn Index has increased by 0.9% too.

PORTS – Early this week, corn sales were high at Brazilian ports, and prices were rising. However, both sales and prices faded in the following days, due to the dollar depreciation against the Real – by 1%, to BRL 5.224.

CROPS – Sowing of the summer crop has been slower this week because of the rains. According to Conab, by October 15th, 30.9% of the national crop had been sown.

Analyst APK-Inform cuts Ukraine 2022 grain harvest, improves wheat export outlook

• ANALYST APK-INFORM CUTS ITS UKRAINE 2022 GRAIN CROP FORECAST TO 53.2-53.6 MILLION T FROM PREVIOUS OUTLOOK OF 54.1-55.7 MILLION T
• UKRAINE’S 2022 HARVEST COULD INCLUDE 19 MILLION T WHEAT, UP TO 27.9 MILLION T CORN, 5.5 MILLION T BARLEY -APK-INFORM
• UKRAINE 2022/23 JULY-JUNE GRAIN EXPORTS COULD TOTAL 23.9 MILLION T TO 40 MILLION T, DEPENDING ON LOGISTICS SITUATION -APK-INFORM
• APK-INFORM INCREASES ITS UKRAINE 2022/23 WHEAT EXPORT FORECAST TO 7.8-13.4 MILLION T FROM PREVIOUS 6.5-12.0 MILLION T

Ukrainian Railways only reached 24% of planned grain transport despite export volumes nearing pre-war levels

Ukrainian Railways (UZ) has only fulfilled 24.1% of its planned grain transport across the Western border despite total grain exports now nearing pre-war levels, Ukraine Business News reported on October 21.

The state-owned company played a vital role in exporting Ukrainian agricultural goods after Russia blocked Ukraine’s Black Sea ports. However, since several ports resumed operations after the signing of the Black Sea Initiative, grain exports have been redirected towards the ports, resulting in a low volume of land crossings.

In addition to smaller grain supplies, sunflower oil only shipped at 35% of reserved volumes and meal at 44%. The issue is companies are not cancelling their land exports but rather opting for low volumes. Valery Tkachev, a top manager at UZ, therefore asked entrepreneurs to be more considerate when submitting applications so that others can make use of the land transport instead.

Overall, Ukraine’s total exports are increasing, with October’s grain exports just 2.4% lower than pre-war levels, Reuters reported. In the first 17 days of this month, Ukraine managed to export 2.12mn tonnes of grain compared with 2.17mn tonnes in the same period last year.

Last month, UZ transported 11.7mn tonnes of cargo, a rise of 8.4% on August and a significant increase of 41% on March. Of the total freight, UZ saw gains in grain of 63.2%, oil and oil products of 7.3%, ferrous metals of 13.8%, salt of 43.2%, coke of 12.6% and hard coal of 1.6%. However, construction materials dropped by 9.3%, as well as iron and manganese ore by 21.2%, in part due to Ukraine’s devastated metallurgical industry.

China sold 40,026 tonnes of wheat from reserves on Oct 19

China sold 40,026 tonnes of wheat, the entire volume offered, at an auction of state reserves on Oct. 19, said the National Grain Trade Center on Monday.

The wheat from the 2014, 2015 and 2016 crops was sold at an average price of 2,829 yuan ($390.75) per tonne.

Egypt Wheat Stocks Enough for 5.5 Months: Supply Minister

Vegetable oil inventories sufficient for 5.3 months, Supply Minister Aly El-Moselhy says.

US Cattle on Feed Fell to 11.45M Head on Oct. 1

The feedlot herd fell 0.9% from a year ago, according to the USDA’s monthly report. Analysts were expecting a drop of 1%

• Placements onto feedlots down 3.8% y/y to 2.08m head
• Cattle marketed from feedlots increased 4% to 1.86m head

US Beef Production Up 1.9% This Week, Pork Rises: USDA

US federally inspected beef production rises to 557m pounds for the week ending Oct. 22 from 547m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter up 2% from a week ago to 673m head
• Pork production up 1.3% from a week ago, hog slaughter rises 1%
• For the year, beef production is 1.4% above last year’s level at this time, and pork is 2.5% below

Ukraine says Russia is delaying passage of 150 grain-carrying ships

Ukrainian President Volodymyr Zelenskiy on Friday accused Russia of deliberately delaying the passage of ships carrying grain exports under a U.N. brokered-deal, and said 150 vessels were waiting to be loaded.

In a video address, Zelenskiy said the delay meant Ukraine had so far exported 3 million tonnes of grain less than expected, enough to feed 10 million people.

Low Water Levels Seen Throughout Lower Mississippi

The lower portion of the Mississippi River–which starts after Cairo, Illinois, south of St. Louis–remains severely low, with little rainfall expected in the remainder of this month. Photographs published by the American Commercial Barge Line this week shows significantly low water in parts of the river ranging from Cairo down to Memphis, Tenn.–with groundings due to the low water continuing to delay barge travel at intervals ranging from 12 to 36 hours. This week, the water level in Memphis dropped to a record low of 10.76 feet, according to the USDA. Ongoing delays have caused some exporters to delay orders until water levels improve, making a dent in demand for US grain exports.

 

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 sales@admis.com 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.

 

CONFIDENTIALITY NOTICE 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.