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

 

Wheat prices overnight are up 49 in SRW, up 44 in HRW, up 35 1/4 in HRS; Corn is up 16 1/2; Soybeans up 10 1/2; Soymeal up $0.40; Soyoil up 1.31.

Markets finished last week with wheat prices up 39 1/2 in SRW, up 31 in HRW, up 22 1/2 in HRS; Corn is up 15 3/4; Soybeans up 29 1/2; Soymeal up $2.07; Soyoil up 1.23.

For the month to date wheat prices are down 43 1/4 in SRW, down 22 1/2 in HRW, down 1 3/4 in HRS; Corn is up 19 3/4; Soybeans up 35 1/4; Soymeal up $26.40; Soyoil up 11.54.

Year-To-Date nearby futures are up 14% in SRW, up 21% in HRW, down 0% in HRS; Corn is up 18%; Soybeans up 5%; Soymeal up 4%; Soyoil up 30%.

 

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 8 yuan; Soymeal up 12; Soyoil down 152; Palm oil down 80; Corn up 9 — Malaysian palm oil prices overnight were up 58 ringgit (+1.45%) at 4047.

There were changes in registrations (440 Soybeans, -35 HRW Wheat). Registration total: 3,077 SRW Wheat contracts; 0 Oats; 0 Corn; 445 Soybeans; 39 Soyoil; 288 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of October 28 were: SRW Wheat up 3,978 contracts, HRW Wheat up 890, Corn up 2,432, Soybeans down 29,952, Soymeal up 3,020, Soyoil up 218.

Northern Plains Forecast: It was dry over the weekend with very warm temperatures for this time of year. That continues the next couple of days, but a cold front will slide through the region Wednesday and Thursday. More of the precipitation is likely to occur in Canada, but some showers may move through, which would be a mix of rain and snow. A stronger push of cold air comes through next weekend.

Central/Southern Plains Forecast: Showers moved out of the southeast on Saturday, replaced by dry air and mild temperatures. Temperatures will increase ahead of a cold front that will slowly slip into the region this week Wednesday and Thursday with scattered showers. There will be a system that forms along the front this weekend that will bring more widespread showers, possibly for western wheat areas.

Midwest Forecast: Showers moved into southern areas over the weekend and will move northeast on Monday. Dry weather continues afterward with rising temperatures that could approach records in some places in the middle of the week. A front will eventually find its way into western portions of the region Thursday and Friday with scattered showers. A storm system will develop along the front with more showers for the weekend. Eventually some cooler air will move into at least western areas but likely through the region behind the system next week.

Brazil Grains & Oilseeds Forecast: A strong front is moving through the country with widespread and heavy showers through Tuesday, but it will get very dry behind this front going through much of November. Showers will eventually work back into central Brazil next week, but will take longer for southern states. Soil moisture in the south continues to be very favorable and can withstand a period of dryness as long as it is not too severe for too long. Overall, conditions are still mostly favorable for corn and soybean establishment in most areas for now.

Argentina Grains & Oilseeds Forecast: Some isolated showers moved through over the weekend with a strong front, but it has turned drier behind it. The dryness is expected to last for at least a full week with isolated showers moving back into the country in the middle of next week. The long period of dryness continues to have a significant effect on filling wheat as well as corn and soybean planting and establishment.

The player sheet for Oct. 28 had funds: net sellers of 3,000 contracts of SRW wheat, sellers of 1,000 corn, sellers of 2,000 soybeans, buyers of 3,500 soymeal, and  sellers of 2,000 soyoil.

TENDERS

• SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 126,000 tonnes of U.S. soybeans to China and 198,000 tonnes to Spain, all for delivery during the 2022/23 marketing year that began Sept. 1, 2022.
• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 134,000 tonnes of animal feed corn in an international tender that closed on Friday
• SOYMEAL PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased about 120,000 tonnes of soymeal in a private deal on Thursday without an international tender being issued
• WHEAT PURCHASE: A government agency in Pakistan is believed to have bought about 385,000 tonnes of wheat in an international tender for up to 500,000 tonnes, European traders said on Sunday.

PENDING TENDERS

• WHEAT TENDER UPDATE: A second trading house was believed to have matched the lowest price of $373 a tonne c&f offered during negotiations on a tender from Pakistan to purchase 500,000 tonnes of wheat that closed on Wednesday
• SUGAR TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities, is seeking 50,000 tonnes of raw sugar of any origin on behalf of the Egyptian Sugar & Integrated Industries Company.
• WHEAT TENDER UPDATE: Iraq changed the closing date of its international tender for 50,000 tonnes of wheat to Oct. 30 from Oct. 24
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley, an official source said.

US BASIS/CASH

• Spot basis bids for soybeans and corn shipped by barge to U.S. Gulf export terminals ratcheted higher on Friday on exporter demand and reduced barge traffic due to low water on Midwest rivers, traders said.
  • The basis strengthened despite barge freight costs retreating in a few locations from historically high levels. Spot barges on the lower Ohio River were offered at 2,600% of tariff, down from 2,700% a day earlier. BG/US
  • Traders were fixated on forecasts for river gauges. The National Weather Service projected the Mississippi River to rise a bit at Memphis, Tennessee over the weekend, potentially allowing for increased barge movement toward the Gulf.
  • However, forecasts for showers in the Midwest late next week will “only allow a minor boost” to water levels on the Mississippi, the Commodity Weather Group said in a daily note.
  • CIF soybean barges loaded in October were bid around 260 cents over November, up 10 cents from Thursday, and November-loaded barges were bid at 227 cents over futures, up 12 cents.
  • Export premiums for soybeans shipped in last-half December were offered around 260 cents over November, up 15 cents from Thursday, while premiums for January shipments rose 15 cents to around 220 cents over futures.
  • For corn, barges loaded in October were bid around 225 cents over December, up 10 cents from Thursday. November corn barges were bid at 185 cents over, also up a dime.
  • First-half December corn export premiums were nominally quoted around 225 cents over futures, unchanged from Thursday, while January loadings held at around 160 cents over futures.
• Spot basis bids for corn and soybeans were unchanged at most elevators, processors and river terminals around the U.S. Midwest on Friday, grain dealers said.
  • Small spot sales of corn were noted as farmers progressed through the tail end of harvest, an Ohio dealer said.
  • The growers that were booking deals were concerned that prices could fall due to bearish demand and were happy to take cash price around $6.50 per bushel being offered.
  • Soybean sales on the cash market were light, with most growers content to keep the recently harvested supplies in storage bins.
  • Although the basis was mostly steady for both commodities, corn bids fell by 5 cents a bushel at a large processor in Decatur, Illinois.
• Spot basis bids for hard red winter wheat were unchanged at southern U.S. Plains truck and rail market elevators on Thursday, grain dealers said.
  • Elevators were seeking low-protein supplies to blend with high-protein wheat they had received from the 2022 harvest, an Oklahoma dealer said.
  • But country movement was light.
  • Some much-needed rain across this region this week boosted soil moisture and improved field conditions as the winter wheat crop heads toward dormancy.
  • Protein premiums for wheat delivered by rail to or through Kansas City fell by 15 cents a bushel for wheat with protein content of 11%, 11.2% or 11.4%, according to CME Group data. Premiums were unchanged for all other protein grades.
• Spot basis bids for soybeans were steady to weak at interior elevators and river terminals around the eastern U.S. Midwest on Friday morning.
  • The soy basis was steady to firm at processors east of the Mississippi River, rising by 20 cents a bushel in Decatur, Illinois.
  • Soybean bids were flat at locations in the western half of the Midwest.
  • Cash bids for corn were steady to firm at elevators but held steady at the region’s processors and river terminals.
  • The corn basis was steady to weak at ethanol plants.
  • Farmers were reluctant to commit to fresh sales at current cash prices but have been brining in newly harvested crops they had previously contracted to sell, dealers said.
• U.S. spot cash millfeed values held steady on Friday after softening in a few locations this week as increased flour mill output coupled with softer demand pressured bids and offers, dealers said.
  • Flour mill run-times have increased since early October, while seasonal demand for “creep feed,” used for weaning calves, has disappeared, anchoring values in the upper Midwest, one dealer said.
• Spot basis offers for U.S. soymeal were unchanged at most rail and truck market processors on Friday, dealers said.
  • Although the basis was mostly steady, offers fell by $5 per ton at a truck processor in Lafayette, Indiana.
  • The Lafayette plant had shut down earlier this week for maintenance but resumed operations on Thursday afternoon, a dealer said.
  • Demand has been steady this week, a Minnesota dealer said.
  • Most end users were content to wait for the previously booked November contracts instead of placing fresh orders on the spot market, dealers said.

TODAY

CFTC Money Managers’ Commodity Positions for Oct. 25

CROP SURVEY: US Soybean Crush and Corn for Ethanol

The following is from a Bloomberg survey of five anlaysts.

• Soybean crush seen at 167.9m bu in Sept., a 2.3% rise from a year ago
• Crude and once-refined soybean-oil reserves at end of September seen at 1.967b lbs, down from 2.131b
• Corn used in ethanol production seen down 3.1% y/y to 394.4m bu
• That would be the lowest since Feb. 2021

Crop Ships Are Leaving Ukraine Despite Russian Move to Halt Deal

• Wheat futures jumped as much as 7.7% early on Monday
• Russia remains a signatory to the agreement, UN says

Ships loaded with grain are beginning to leave Ukraine, as the United Nations and Turkey work to salvage the agreement to keep seaborne exports flowing even after Russia’s weekend announcement that it was suspending its involvement in the deal.

Wheat prices soared early Monday as traders watched for developments on exports, while tensions surged in Ukraine with Russia launching a massive wave of missile attacks across the country. Ukraine is one of the world’s biggest suppliers of wheat, corn and vegetable oil and the July agreement to open three Black Sea ports has been vital to help alleviate a global food crisis.

Russia has only temporarily suspended its participation in implementing the deal, which was brokered by Turkey and the UN, but is still a signatory to the agreement, Ismini Palla, a UN spokeswoman for the Black Sea Grain Initiative, said by phone at about 7am London time. Under the terms of the initiative, all parties agreed not to undertake attacks against merchant and civilian ships.

Palla confirmed at that time that outbound ships were moving and assembling near the entrance to the corridor.

The UN announced late Sunday that it had agreed with Ukraine and Turkey to have vessels carrying food from Ukrainian ports sail on Monday. Russian delegates have been informed, the UN statement said.

Russia suspended its participation in the deal on Saturday after drone strikes against its naval fleet, claiming without evidence that one of the drones might have come from a grain ship that’s part of the Black Sea initiative. Ukraine strongly denied the accusations.

Brazil to buy U.S., Canada and Russia wheat as Argentine supplies dwindle

Brazil will need to seek alternative wheat sellers because Argentina’s crop failure has curtailed production and compromised its ability to export, analysts said, pointing to the United States, Canada and even Russia as possible suppliers.

Brazil is a net wheat importer and neighboring Argentina, which is currently suffering a drought, is its most important source of the cereal.

“Generally, Brazil gets about 6 million tonnes from Argentina,” said StoneX risk management consultant Fabio Lima. But now, he expects between 1 and 1.5 million tonnes of imports coming from outside Mercosur, the South American trade bloc.

Brazil is one of the world’s largest wheat importers, with domestic consumption above 12 million tonnes per year, below its output capacity.

In the 2021 to 2022 commercial year that ended in July, Brazil imported only about 155,000 tonnes of wheat from countries outside the Mercosur. In turn, the year before, it purchased almost 900,000 tonnes from the United States, Canada and Russia, according to Brazilian government data.

Aside from the drought in Argentina, Brazil’s key producer Parana is facing excessive rains, also compromising domestic supplies.

The Mercosur Common External Tariff (TEC) is zero for imports of some products this year, including wheat. Brazil also has an annual 750,000-tonne wheat import quota that is exempt from the tariffs.

Lima said it is difficult to estimate how much wheat will come from outside Mercosur. He cited rumors of potential cargo from Russia, but could not elaborate.

Carlos Cogo, from Cogo Intelligence, cited the United States, Canada and Russia as potential alternative suppliers for Brazil. But he cautioned buying from them will be expensive, potentially fuelling domestic inflation.

According to Cogo data, Argentina has already sold almost 9 million tonnes from their 2022 to 2023 crop, leaving very little additional supplies and pushing prices higher.

China to auction 500,000 T of soybeans from state reserves on Nov 11

China will auction 500,000 tonnes of imported soybeans from its state reserves on Nov. 11, the National Grain Trade Center said in a statement on Friday.

The sale of beans from the 2019, 2020 and 2021 crop years comes amid tight supply of the oilseed in the world’s top buyer and consumer after reduced imports this year.

Midwest river woes may spur deliveries against CBOT Nov soy futures -traders

Deliveries against Chicago Board of Trade November soybean futures could be moderately heavy on Monday, first notice day, traders and analysts said on Friday, due to low water on Midwest rivers that has slowed movement of grain to U.S. Gulf export terminals.

The resulting backlogs of grain and soy at Midwest river elevators could encourage commercial grain handlers to deliver against futures, letting someone else own the grain and incur storage charges until the next futures delivery cycle, against the January 2023 futures SF3 contract.

“Most of our (CBOT soybean) delivery points are along the Illinois River, which feeds into the Mississippi. There are all sorts of ideas that soybeans are going to be backed up, so there should be big deliveries,” said Jack Scoville, market analyst at The Price Futures Group.

Expectations for deliveries against CBOT November SX2 soybean futures were mostly for zero to 500 contracts, although one analyst said soy deliveries could reach 1,000 contracts.

The exchange reported zero deliveries on first notice day for the last four CBOT soybean delivery cycles, including the September, August, July and May 2022 futures contracts. But a year ago, first-day deliveries against the November 2021 soybean contract totaled 1,318 lots. SOY/DEL

Firm domestic cash markets for soybeans, driven by robust profit margins for soy crushers, may prevent even more deliveries, trader said, encouraging grain handlers to retain ownership.

The CBOT reported that just five soybean futures contracts were registered for delivery as of Thursday night. However, commercial companies have until 4 p.m. CDT (2100 GMT) to register additional CBOT contracts for delivery.

Traders closely monitor deliveries. A large number of deliveries tends to pressure the price of a nearby futures contract, while a small number would tend to support prices.

During a contract’s delivery period, which lasts two to three weeks, the futures market acts like a cash market. Companies holding short positions in November futures can issue intentions to deliver the physical commodity. Traders holding the oldest-dated longs must accept delivery.

EU Animal Feed Output Seen Lower in 2022 on Disease, War: FEFAC

EU compound-feed production is expected to decline 3.5% y/y to 145m tons this year, animal-feed manufacturers’ group FEFAC said in a note.

• The spread of animal diseases and economic impact of the war in Ukraine are pushing down demand
• Pig feed sector to be affected the most, with production down 5.6% y/y
• Poultry feed output -3.4%, cattle -1.3%
• Disappointing corn harvest in the EU may lead to a switch in the feed ratio in favor of feed wheat

Bolivia Lifts Exports Suspension of Soybean Products: ABI

Bolivia’s Government lifted the export suspension of soybean and its by-products after verifying national supply is guaranteed, state news agency ABI reported.

• The decision was taken after an agreement reached between the Government and the National Chamber of Oilseeds Industries: ABI
• Exports suspension for sugar and beef are still in effect, Deputy Minister of Internal Trade Grover Lacoa said in interview with Radio Panamericana

Green-Fuel Boom Has CME Considering Futures Contract Change

• American farmers are now planting soybeans that yield more oil
• That affects the quality of soymeal, which trades in Chicago

The US renewable diesel push is prompting farmers to plant a different type of soybeans, a move that’s forcing the Chicago exchange to consider changes to one of its futures contracts.

Growers are turning to seeds that yield more vegetable oil, key to making the green fuel. The change is affecting the quality of meal — a co-product of soy processing — prompting CME Group Inc. to mull tweaks to its futures contract for the product used in animal feed, according to people familiar with the matter.

American renewable diesel production could jump by eight-fold in the four years to 2024 as countries around the world seeks to fight climate change, according to the US Energy Information Administration. The fuel has the very same properties of diesel, but is made from animal fats and vegetable oils, mostly from soybeans and canola.

CME, one of the world’s largest derivatives exchanges, is consulting with traders and brokers about lowering the protein content of its soybean meal futures, said the people, who asked not to be named because the information isn’t public. The change would be part of a regular review of contracts and take take the standard to 47% from 47.5% currently, matching the industry standard, the people said.

A CME spokeswoman confirmed the exchange was surveying market participants on soymeal, and added the exchange regularly seeks client feedback.

SOYBEAN/CEPEA: Soy oil price resumes rising in BR and hit the highest level of the month

Soy oil prices have resumed increasing in the Brazilian market, boosted by higher domestic demand, majorly for the production of biodiesel. This scenario raised the competition for the national by-product and hampered acquisitions by Brazilian food processors. Besides, the demand from abroad continues high – it is important to consider that the volume Brazil has exported this year is currently a record.

Thus, the price of the soy oil traded in São Paulo (with 12% ICMS included) rose by a staggering 8% in the last seven days, closing at BRL 7,674.51/ton on Oct. 27th. It is important to highlight that, on Wednesday, 26, oil prices hit the highest level since Sept. 5th.

The demand for soybean meal has been high in Brazil too. Domestic consumers increased purchases in the last days, buying larger amounts, according to agents consulted by Cepea.

Besides, the demand from abroad has been high, and Brazilian processors expect the demand for the Brazilian product to increase in the coming months. It is important to highlight that, so far, Brazil has exported 15.98 million tons of soybean meal, a record compared to that in the same period of previous years. Thus, on the average of the regions surveyed by Cepea, quotations increased by 1% in the last seven days.

With the valuations of by-products, processors’ crush margin rose by 22.5% in a week, considering the quotations for soybean, meal and oil in SP, to BRL 552.56/ton on Oct. 27th.

Domestic valuations were also influenced by price rises abroad. Considering soy oil, valuations were linked to the price rises for oil most of the week. This scenario encourages refineries to mix biodiesel to diesel oil, and soy oil is the major raw material used to produce biodiesel.

SOYBEAN – Amid higher demand for by-products, the competition for soybean between Brazilian purchasers and importers has increased this week, resulting in the narrowest spread between the ESALQ/BM&FBovespa Paranaguá (PR) Index and the CEPEA/ESALQ Paraná Index since May 25th. These Indexes rose by 1.1% and 1.4% between October20-27, to BRL 186.43/60-kilo bag and BRL 183.18/bag, respectively, on Thursday, 27.

On the average of the regions surveyed by Cepea, prices increased by 1.3% in both the over-the-counter market (paid to farmers) and the wholesale market (deals between processors). Domestic prices were also influenced by the dollar appreciation against the Real, which makes Brazilian products more attractive to importers. The US dollar rose by 1.4% in the last seven days, to BRL 5.299 on Thursday, 27.

CROPS – According to Conab, 34.1% of the Brazilian crop of soybean had been sown by Oct. 22nd, down from the 36.8% from the same period last season.

CORN/CEPEA: Corn sowing advances in BR, and prices continue to rise

With the firmer weather in Brazil in the last days, corn sowing advanced in most of the regions that produce the summer crops. Despite the progress of the activities, farmers resumed limiting supply, aware of the prices at the national ports. In that scenario, purchasers reported difficulties to buy new batches in the spot market and through term contracts.

Between October 20 and 27, the ESALQ/BM&FBovespa Index (Campinas, SP) rose by 0.2%, closing at BRL 85.35/bad on Thursday, 27. This month, the corn Index has increased by 1.1%. On the average of the regions surveyed by Cepea, quotations rose by 0.7% in the over-the-counter market (paid to farmers) and by 0.4% in the wholesale market (deals between processors).

PORTS – At Brazilian ports, corn prices have been more attractive than in the interior of the country, underpinned by the dollar appreciation against the Real and international corn valuations. The American currency rose by 1.4% compared to the Real in the last seven days, to BRL 5.299 on Thursday.

This month, the average prices in Paranaguá (PR) and in Santos (SP) are currently 5 Reais/bag above the ESALQ/BM&FBovespa Index, raising the interest of sellers in trading corn for exportation. For delivery in November and in December, the averages at these ports are at BRL 91 and BRL 92/bag. In the last seven days, quotations dropped by 0.3% in Paranaguá and by 0.5% in Santos.

CROPS – According to Conab, 35.8% of the Brazilian crop of corn had been sown by October 22nd, against 30.9% in the previous week but below the 37.6% from the same period last year, having advanced most in Paraná, Rio Grande do Sul and Santa Catarina.

Malaysia Oct. Palm Oil Exports +5% M/m: Intertek

• Total exports for Oct. 2022: 1.496m tons
• Crude palm oil exports: 301,225 tons, 20.1% of total
• EU led all destinations for total exports: 346,367 tons

Pakistan to Import 800,000T of Wheat, Finance Ministry Says

Economic Coordination Committee of Cabinet allows Trading Corporation of Pakistan to import the grain through open tendering or through government-to-government basis, finance ministry says in statement.

• Approves lowest bid by M/s Aston FFI DMCC, M/s Fertile Pvt Limited of $373/ton for 120,000 ton in 6th international wheat tender 2022
• TCP allowed to proceed ahead with the lowest offer received from M/s Makhdoom Logistics Services of $ 520/MT for import of 300,000 MT of urea fertilizer

IKAR Raises Russia 2022 Wheat Crop Forecast to 101 Million tons

Consultant IKAR raises its forecast for Russian wheat production in 2022 by 1m tons to 101m tons, director Dmitry Rylko says by email.

• Boosts wheat export potential estimate to 50m tons from 48m tons
• “Highly provisionary” 2023 wheat production forecast is 87m tons.

Egypt to import 1 mln T of wheat after April 2023 -TV cites supply minister

Egypt’s supply minister says Egypt plans to import additional one million tonnes of wheat to secure reserves after April 2023.

US Beef Production Falls 0.6% This Week, Pork Down: USDA

US federally inspected beef production falls to 554m pounds for the week ending Oct. 29 from 557m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter down 0.7% from a week ago to 668m head
• Pork production down 0.2% from a week ago, hog slaughter falls 0.5%
• For the year, beef production is 1.4% above last year’s level at this time, and pork is 2.4% below

UNITED STATES

SOUTH AMERICA

 

 

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.