Overnight trade has SRW up roughly 6 cents, HRW up 4; HRS Wheat up 4, Corn is fractionally lower; Soybeans down 1, Soymeal down $0.50, and Soyoil down 5 points.
Chinese Ag futures (Sep) settled up 38 yuan, up 9 yuan in Corn, up 4 in Soymeal, up 30 in Soyoil, and unchanged in Palm Oil.
Malaysian palm oil prices were up 49 ringgit at 2,208 (basis August) with India resuming palm oil imports.
U.S. Weather Forecas
Last night’s GFS model run showed a large ridge of high pressure build into the central U.S. May 31 – Jun. 4; the ridge was shown to be larger, stronger, and farther northeast than what the midday GFS model suggested and this led to the significant decrease of rainfall in a swath of the Corn Belt Jun. 2 – 4.
South America Weather Forecast
No changes have occurred with the forecast in Safrinha crop areas of Brazil for the upcoming rain event late Thursday into Saturday; significant rain is expected in far southern Brazil, Parana, and southwestern Mato Grosso do Sul; some rain that is more erratic and not as significant will also still occur in Sao Paulo, northeastern Mato Grosso do Sul, and southwestern Mato Grosso
Black Sea/Europe region
Yesterday’ mid-day European forecast model run was wetter in northern Europe from eastern Germany through Poland to northern parts of Russia while drier biased in central and eastern Ukraine; the model was still wet in the Balkan Countries and in portions of Russia’s Southern Region; the evening GFS model run seemed to parallel the European mid-day model solution
The player sheet had funds net buyers of 11,000 contracts of SRW Wheat; net sold 4,000 Corn; net bought 3,000 Soybeans; net bought 1,000 lots of Soymeal, and; net bought 2,000 Soyoil.
We estimate Managed Money net long 1,000 contracts of SRW Wheat; net short 230,000 Corn; net long 30,000 Soybeans; net short 18,000 lots of Soymeal, and; net short 1,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 12,100 contracts; HRW Wheat up 5,500; Corn up 8,500; Soybeans up 3,500 contracts; Soymeal up 2,500 lots, and; Soyoil up 4,200.
There were changes in registrations (Soymeal down 6; Rice down 109)---Registrations total 11 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 153; Soyoil 3,495 lots; Soymeal 511; Rice 121; HRW Wheat 17, and; HRS Wheat 488 contracts.
TODAY------WEEKLY EXPORT SALES---
Crop scouts on the second day of a three-day tour of Kansas hard red winter wheat fields projected an average yield of 42.5 bushels per acre (bpa) for wheat in the west-central portion of the state and 32.9 bpa for wheat in southwest Kansas; the tour's two-day average yield forecast, covering fields scouted in west-central, southwest, north-central and northwest Kansas, was 42.0 bpa.
---Department of Agriculture this month put the average yield for the Kansas wheat crop, which has struggled with drought and frost, at 47.0 bpa
U.S. ethanol production for the week ended May 15th averaged 663,000 barrels per day (up 7.5% versus a week ago, down 38.1% versus a year ago); stocks totaled 23.6 mil barrels (down 2.3% versus a week ago, up 0.95% versus last year); corn use for the week was 67.8 mil bu (62.9 mil last week) and versus the 95.2 mil bu needed to meet USDA projections.
The U.S. Environmental Protection Agency would lift the amount of biofuels that refiners must blend into their fuel next year to 20.17 billion gallons, from 20.09 billion this year; the 2021 volumes would include 15 billion gallons of conventional biofuels like ethanol and 5.17 billion gallons of advanced biofuels, according to the sources
---The U.S. Environmental Protection Agency has not yet decided whether to grant requests from the oil refining industry to reduce biofuel blending mandates this year, agency chief Andrew Wheeler told lawmakers in a hearing on Wednesday
Even before the coronavirus outbreak, most analysts believed U.S. corn supplies would swell to 30-year highs in 2021; but those prior stock expectations are now much too low considering the sharp loss in corn demand by way of ethanol, and inventory stands to bulge even further if ethanol output does not recover in a timely fashion.
US fuel ethanol producers continue to feel margin pressure, despite indications of demand recovery, as stocks remain elevated and consumers remain hesitant to resume their normal lives; fuel producers continue to lament the low margin territory that has resulted in shutdowns across the industry, as the coronavirus has essentially halted road travel; the blow to fuel ethanol was especially present in Q1 earnings, which left some with negative earnings and a demand loss of over 50%.
U.S. April cattle placements seen down 22.6% as virus shut meat plants -analysts - Reuters News
China will start selling corn from its state reserves on May 28, the National Grain Trade Centre said late Wednesday, a move long awaited by the market as supplies of the grain tighten; four million tons of corn, all from the northeastern corn-belt region, will be offered at the sale; in line with previous years, analysts expect more weekly sales to be held until the end of October, when the new crop kicks in; the market has been paying close attention to this year's auction, and hopes the sales can cool down the heated market; corn prices in Harbin, capital of top producing Heilongjiang province, have jumped 15% this year as processors have been caught out by unexpected demand.
---A rare ethanol shipment of U.S. origin is expected to arrive in China this month, probably the first such cargo since the two countries struck an initial trade deal in January; the market has been watching closely for signs of renewed trade in biofuel after China waived some additional tariffs on 696 American products, ethanol among them, to support purchases of U.S. farm goods, after the signing of the Phase 1 trade deal
Bunge's Brazil unit has signed a contract to acquire two soy crushing plants from Imcopa, marking another step to consolidate its position as Brazil's largest soybean crusher; Imcopa, which is operating under bankruptcy court protection, confirmed the signing of the contract and said the aim of the sale is to keep the plants running and protect jobs
Russia will harvest about 120 million tons of grain in 2020, slightly less than in 2019 as yields are going to decline in several southern regions of the country, the Agriculture Minister told a government meeting; Russia and Ukraine - major exporters of wheat from the Black Sea region - were hit by dry weather in April, though beneficial May rain fixed most of the damage for the upcoming crop.
---Russia exported 7.3 million tons of wheat and meslin in Q1 2020, up 11% year-on-year, the Federal Customs Service (FCS) said; the exports came to $1.497 billion in value.
---Wheat exports rose 2.3-fold in March compared with February 2020 to 3.66 million tons and were valued at $705 million.
---Vegetable oil exports grew 35.9% to 1.008 million tons or $707.5 million in Q1 and rose 51% month-on-month in March to 436,600 tons or $309.7 million
Ukrainian sunflower oil export prices have risen over the past week helped up by rising demand from key importers and an increase in energy prices, APK-Inform agriculture consultancy said
---Sunoil asking prices rose to $725-$735 per tonne FOB Black sea as of May 20 from $700-4705 a week earlier; the bid prices also rose to $740-$750 from $705-$715
---Ukraine may cut its sunoil export by 0.8% in the 2020/21 season to 6.15 million ton; Ukraine exported 6.063 million tons of sunflower oil in the 2018/19 season and may export around 6.2 million tons this season
---The consultancy said this week Ukraine had doubled seaborne exports of the commodity to 3.858 million tons so far in the 2019/20 season, which runs from September to August.
It was bad news for Australian barley growers on Monday as China applied an 80.5% import tariff on the grain, likely a similar gut-punch felt by U.S. soybean farmers when their trade was all but choked off with China two years ago; the effective banning of Australian barley into China may benefit U.S. growers, but the potential dollar value will be minimal up against huge trade targets outlined in the Phase 1 trade deal; so far, the United States’ experience has not been great when it comes to interrupted trade with China, as those relationships have yet to revert to pre-conflict levels, so Australian farmers could be in for a drawn-out event.
Indonesia is likely to export 12% less palm oil in 2020 than previously expected; right now, it is rather difficult to export as some countries are in lockdown; project that there will be a decline in palm oil exports by more or less than 12% (than previously expected); BPDP had earlier expected Indonesia to export 37.94 million tons of palm oil.
Malaysia voiced its commitment to further strengthen diplomatic and trade ties with India, after the world's largest edible oil buyer renewed purchases of Malaysian palm oil, in a sign of improving relations between the two countries; Indian buyers contracted up to 200,000 tons of Malaysian crude palm oil for June and July, after a four-month gap following a diplomatic row.
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