FI Evening Grain Comments 01/15/21

Jan 17, 2021







PDF Attached

 

Bear
spreading amid profit taking pressured March soybeans and March corn.  Wheat was higher on Russian export tax concerns. 

 

Attached
is our updated US corn balance sheet among several US corn charts. 

·       
We lowered FI corn for ethanol use by 50 to 5.0 billion, 50 above USDA

·       
US corn exports were lowered 50 to 2.600 billion, 50 above USDA

·       
US corn for feed was revised sharply lower to 5.6 billion, 50 below USDA

·       
Supply was adjusted to reflect lower carry in stocks and lower US production. 

·       
US corn imports were lowered 5 million bushels to 30, 5 above USDA

·       
Our US corn carryout is currently 1.506 billion bushels vs. 1.552 USDA. 

 

 

 

Weather

NOT
MUCH CHANGE

South
America’s weather outlook has not changed

  • Argentina
    received welcome rain from La Pampa and many Buenos Aires locations into central Cordoba, San Luis and southern Santa Fe late Thursday and overnight
    • Moisture
      totals varied from 0.20 to 0.88 inch most often with local totals of 1.00 to more than 3.00 inches in southern Santa Fe and southeastern Cordoba along with a few random 1.00 to 2.00-inch totals in La Pampa and western Buenos Aires
    • The
      moisture coupled with that which fell earlier this week and that which is expected today, and Saturday will help crops coast into next week’s dry and warmer weather without much concern over stress
    • Timely
      rain will be extremely important for the last week of this month and on into February, but for now conditions in the nation are improving
  • Brazil’s
    rainfall has been a little erratic recently, but sufficient rain has been occurring in most of the important production areas
    • The
      past two days of scattered showers and thunderstorms have removed concern over dryness in western and northern Sao Paulo as well as southwestern Minas Gerais
      • Similar
        relief occurred last week in southern Goias
  • Brazil’s
    weather outlook for the next two weeks will be mostly good with rain for most of the key grain, oilseed and cotton areas
    • Net
      drying is expected from eastern Minas Gerais and Espirito Santo into eastern Bahia, but this will impact unirrigated coffee, cocoa and minor sugarcane areas more than coarse grain and oilseeds
      • Unirrigated
        coffee areas of Zona de Mata, Espirito Santo and Bahia will need rain soon
  • Eastern
    Australia will experience erratic rainfall of limited significance during the next ten days to two weeks
    • Net
      drying is expected, although showers will occur to support irrigated crops
    • Some
      of the dryland production area will have rising need for significant moisture soon.
  • Russia’s
    Southern Region will get additional snow and some rain through the weekend adding more moisture for crop use in the spring
    • Snow
      cover will be sufficient to protect northern crops from any threatening cold that occurs over the next few days
    • No
      crop damaging conditions are expected over the coming week because of sufficient snow on the ground in most of western Russia
  • Eastern
    Europe snow cover is sufficient to protect most crops from any threatening weather that might evolve in the next week to ten days
    • No
      threatening cold is anticipated, although temperatures will be cooler than usual
  • Europe
    weather will continue abundantly moist over the next ten days to two weeks a frequent precipitation events continue while temperatures are mild to cool
    • Some
      flood potential may rise in France, the United Kingdom and northern Spain as time moves along
    • Flood
      potentials are already high in parts of Italy and the eastern Adriatic seas counties
  • China
    weather will remain favorable for this time of year with no threatening cold and well established winter crops
    • Precipitation
      will be light in this first week of the outlook, but will increase in the Yangtze River Basin and parts of the interior far south in the Jan. 23-29 period
  • India
    will dry down in the far south finally after weeks of frequent rain
    • The
      change will help improve late season harvest conditions for sugarcane cotton and groundnuts
    • Winter
      crop conditions in the far south will also benefit from drier weather
  • India’s
    key winter crop areas in the central and north are rated favorably with some need for rain in western and southern production areas
    • Rain
      is always needed in all of India’s winter crop areas during the winter, but the situation is not critical in very many areas
  • South
    Africa’s shower and thunderstorms pattern is expected to ease this weekend and net drying is expected through most of next week across the nation
    • Crop
      conditions will stay fine with good production potentials, although the need for rain will rise in many areas by the last days of January
  • U.S.
    Midwest received snow and a little rain Thursday
    • Moisture
      totals were varied up to 0.54 inch through dawn in eastern Minnesota, southwestern and west-central Wisconsin and a few Iowa locations
      • Snow
        accumulations varied from 3 to 7 inches from eastern Minnesota and parts of western Wisconsin southward into the heart of Iowa with a dusting to 2 inches in immediate surrounding areas
  • Excessive
    wind speeds occurred in the U.S. northern and central Great Plains Thursday
    • Speeds
      of 25 to 40 mph were common with gusts of 50-65 mph and more
  • U.S.
    weather outlook
    • Snow
      and blowing snow will remain over the Midwest today and Saturday
      • Strong
        wind speeds will continue, although not as windy as in the Plains the past two days
      • Snow
        accumulations will vary from a dusting to 3 inches most often, but greater snow will occur from southern Minnesota into Iowa where upwards to another 6 inches will occur
    • Rain
      and snow will occur through the weekend in the Atlantic Coast States, although New England, New York and southeastern Canada will get the greatest snowfall
    • Brief
      periods of snow and rain will impact the heart of the nation and areas east across the Midwest and Atlantic Coast states next week until late week
    • The
      next larger storm will impact the southern Plains Thursday and Friday, Jan. 21-22 before moving through the Delta to the lower half of the Atlantic Coast in the following weekend
      • Rain
        and some snow will accompany this event
      • The
        Midwest should be a little cooler at that time with a surface high pressure center settling over the region for a while
    • Cooling
      is expected in the far western United States after Jan. 22 and the cold should bring on some needed snow in some of the drought stricken Rocky Mountain and Great Basin regions
    • A
      couple of small storms will move across the central and eastern U.S. in the last week of January as reinforcing cold air shifts out of the western states and into the east
    • U.S.
      temperatures will be near to above normal in this first week of the outlook and then colder in the north-central and northwestern states as well as Canada’s Prairies in the following week
  • Waves
    of rain will impact the Philippines, Indonesia and Malaysia over the next week to ten days
    • Excessive
      moisture is possible at times, but most of the greater rainfall that has been seen recently has abated for the next several days and then will return again
    • Flooding
      has been an issue for the nation at times in recent months
  • Mainland
    areas of Southeast Asia will be dry over the next ten days except coastal areas of Vietnam where scattered showers are expected
  • West
    Africa rainfall will remain mostly confined to coastal areas while temperatures in the interior coffee, cocoa, sugarcane, rice and cotton areas are in a seasonable range for the next ten days
    • Some
      rain fell in Ivory Coast and Ghana coffee and cocoa areas Monday, but resulting amounts were light
  • East-central
    Africa rainfall will continue limited in Ethiopia as it should be at this time of year while frequent showers and thunderstorms impact Tanzania, Kenya and Uganda over the next ten days
  • Southern
    Oscillation Index remains very strong during the weekend and was at +19.30 today and the index will remain very strong for a while longer
  • Mexico
    and Central America weather will continue to generate erratic rainfall
    • Far
      southern Mexico and portions of Central America will be most impacted by periodic moisture which is greater than usual at this time of year
    • Rain
      advertised for central and northern Mexico next week would be welcome, but it is likely overdone
  • Canada
    Prairies will remain warmer than usual over the coming week
    • Precipitation
      will occur a little more often helping to improve snow cover and potential topsoil moisture in the spring
  • Southeast
    Canada will receive rain and snow this weekend and then a little cooler with some follow up precipitation next week

Source:
World Weather Inc. and FI

 

 

Bloomberg
Ag Calendar

Monday,
Jan. 18:

  • China
    customs to publish trade data, including corn, wheat, sugar and pork imports
  • China
    4Q pork output
  • EU
    weekly grain, oilseed import and export data
  • Brazil
    coffee exporters group Cecafe releases December data
  • Ivory
    Coast cocoa arrivals
  • HOLIDAY:
    U.S. (Martin Luther King, Jr. Day)

Tuesday,
Jan. 19:

  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • New
    Zealand global dairy trade auction

Wednesday,
Jan. 20:

  • China
    customs to publish import data split by country
  • European
    Cocoa Association grinding data
  • Malaysia’s
    Jan 1-20 palm oil exports

Thursday,
Jan. 21:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • Port
    of Rouen data on French grain exports
  • USDA
    red meat production

Friday,
Jan. 22:

  • ICE
    Futures Europe weekly commitments of traders report, 1:30pm (6:30pm London)
  • CFTC
    commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
  • EIA
    weekly U.S. ethanol inventories, production, 10:30am (two days later than usual due to federal holidays earlier in the week)

U.S.
Cattle on Feed, poultry slaughter

Source:
Bloomberg and FI

 

 

CFTC
COT

It
is safe to say the trade for the last several weeks has missed predicting how much the longs have gone long.  “Traditional” fund positions for corn have hit another record for futures only and futures and options combined.  Managed money positions have a short
stint to make new records, but this is a reminder they have room for the upside, and with open interest at a high level, higher prices can be achieved if the manage money plow another round of long positions in the markets. 

 

 

 

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
435,357     39,740    399,292     -9,786   -808,165    -10,952

Soybeans          
158,524     -6,692    159,369     -6,813   -320,896     10,921

Soyoil             
69,029    -22,897    123,201        289   -213,755     20,178

CBOT
wheat          -6,511     -4,778    137,518        503   -118,635      2,903

KCBT
wheat          34,493      1,682     70,391     -2,569   -106,938     -1,016

=================================================================================

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
374,714     24,826    243,283     -4,611   -774,381    -13,327

Soybeans          
166,485     -9,342     70,230     -9,618   -297,117     16,847

Soymeal            
84,408       -187     64,887     -3,271   -203,625     -3,018

Soyoil             
93,536    -19,382     83,956     -1,906   -219,282     23,488

CBOT
wheat          16,987     -8,224     82,881      2,211   -105,192      1,630

KCBT
wheat          55,062        605     42,709       -206   -100,404       -928

MGEX
wheat          11,797      4,049      3,401        211    -25,025     -4,501

                
———- ———- ———- ———- ———- ———-

Total
wheat         83,846     -3,570    128,991      2,216   -230,621     -3,799

 

Live
cattle         42,827     -3,160     76,489      7,941   -129,393     -1,861

Feeder
cattle           13     -1,758      7,547       -532     -1,852        816

Lean
hogs           38,742      1,664     53,195      2,563    -89,982     -1,961

 

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn              
182,867     12,113    -26,483    -19,001  2,580,675    201,473

Soybeans           
57,399       -470      3,003      2,584  1,342,333     59,686

Soymeal            
23,656      2,720     30,675      3,756    499,855     13,121

Soyoil             
20,265     -4,631     21,526      2,431    568,408     -3,163

CBOT
wheat          17,695      3,009    -12,372      1,372    538,192     15,758

KCBT
wheat             578     -1,374      2,055      1,903    242,317      4,356

MGEX
wheat           4,651        748      5,175       -507     88,317      6,000

                
———- ———- ———- ———- ———- ———-

Total
wheat         22,924      2,383     -5,142      2,768    868,826     26,114

 

Live
cattle         25,378       -847    -15,302     -2,072    359,752     16,012

Feeder
cattle        2,033        885     -7,742        589     48,928        -87

Lean
hogs           10,661     -2,208    -12,616        -58    245,388      3,674

 

 

 

 

 

 

Macros

US
Retail Sales (M/M) Dec: -0.7% (est 0.0%, prevR -1.4%)

US
Retail Sales Ex-Autos (M/M) Dec: -1.4% (est -0.1%, prevR -1.4%)

US
Retail Ex Gas/Autos Dec: -2.1% (prevR -1.3%)

US
Retail Control Dec: -1.9%  (est 0.1%, prevR -1.1%)

 

US
PPI Final Demand (Y/Y) Dec: 0.8% (est 0.8%, prev 0.8%)

US
PPI Final Demand (M/M) Dec: 0.3% (est 0.4%, rev 0.1%)

US
PPI exFood/Energy (Y/Y) Dec: 1.2% (est 1.3%, prev 1.4%)

US
PPI exFood/Energy (M/M) Dec: 0.1% (est 0.2%, prev 0.1%)

US
PPI exFood/Energy/Trans (Y/Y) Dec: 1.1% (prev 0.9%)

US
PPI exFood/Energy/Trans (M/M) Dec: 0.4% (prev 0.1%)

 

US
Univ. Of Michigan Sentiment Jan P: 79.2 (est 79.5; prev 80.7)

–
Conditions Jan P: 87.7 (est 97.0; prev 90.0)

–
Expectations Jan P: 73.8 (est 74.0; prev 74.6)

–
1-Year Inflation Jan P: 3.0% (est 2.5%; prev 2.5%)

–
5-10 Year Inflation Jan P: 2.7% (prev 2.5%)

US
Business Inventories (M/M) Nov: 0.5% (est 0.5%; prev 0.7%)

 

Corn.

  • Corn
    futures traded 12.75 cents lower in the front month on profit taking ahead of the long US holiday weekend.  US producer selling likely was active.   One piece of news that should be monitored was an update from Mexico’s decision to phase out GMO corn.  Apparently,
    it will include GMO corn imports for feed.  This could affect 15.5-18 million tons of GMO corn imports going forward.  They could reverse their decision if they cannot source non-GMO corn, or replace supplies. 
  • Funds
    on Friday sold an estimated net 10,000 corn contracts.
  • Traders
    should be eyeing the March corn gap of 517.25 and 519. 
  • Brazil’s
    Safras sees corn production at 113.5 million tons, up from 112.9 million previously. 
  • China
    will auction off 30,000 tons of pork late next week. 
  • So
    far in January, Ukraine corn export prices rose $23-$26 per ton to $256-$264 fob Black Sea, according to APK-Inform.  This is $6-$10 per ton higher than the previous record in May 2014. 

 

Corn
Export Developments

  • Under
    the 24-hour USDA reporting system, private exporters reported export sales of 110,000 tons of corn for delivery to Mexico during the 2020-21 marketing year. 
  • Results
    awaited: Qatar seeks 100,000 tons of bulk barley on January 12.
  • Results
    awaited: Qatar seeks 640,000 cartons of corn oil on January 12.

 

Updated
1/12/21

March
corn is seen trading in a $4.75 and $5.50 range

 

Soybean
complex.
 

 

 

 

Oilseeds
Export Developments

 

 

Updated
1/12/21

March
soybeans are seen in a $13.25 and $15.00 range

March
soymeal is seen in a $430 and $500 range

March
soybean oil is seen in a 42.00 and 45.50 cent range

 

Wheat

 

Export
Developments.

  • Bangladesh
    seeks 50,000 tons of wheat January 18 for shipment within 40 days of contract signing. 
  • Syria
    seeks 200,000 tons of wheat on Jan 18 for shipment within 60 days after contract signing. 
  • Japan
    in a SBS auction seeks 80,000 tons of feed wheat and 100,000 tons of feed barley for arrival in Japan by March 18 on January 19.
  • Jordan
    seeks 120,000 tons of feed barley on Jan 19. 
  • Jordan
    seeks 120,000 tons of milling wheat, optional origin, on Jan. 20.  Possible shipment combinations are between June 1-15, June 16-30, July 1-15, July 16-31, Aug. 1-15 and Aug. 16-31.
  • Turkey
    seeks 400,000 tons of milling wheat on Jan 19 for Jan through Feb 25 shipment. 
  • Bangladesh
    seeks 50,000 tons of wheat January 25 for shipment within 40 days of contract signing. 

 

Rice/Other

  • Bangladesh
    seeks 10,000 tons of rice on January 18. 

·        
Bangladesh seeks 60,000 tons of rice on January 20. 

·        
Bangladesh seeks 50,000 tons of rice on Jan. 24. 

  • Bangladesh
    seeks 50,000 tons of rice on January 26. 

·        
South Korea seeks 113,555 tons of US, Thailand, and China rice on Jan 21 for April 30 through July 31 arrival. 

·        
Syria seeks 25,000 tons of rice on February 9. 

 

Updated
1/12/21

March
Chicago wheat is seen in a $6.35‐$7.15 range

March
KC wheat is seen in a $6.00‐$6.50 range

March MN wheat
is seen in a $6.00‐$6.55 range

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International
One Lincoln Center
18 W 140 Butterfield Rd.

Oakbrook Terrace, Il. 60181

W: 312.604.1366

treilly@futures-int.com

ICE IM: 
treilly1

Skype: fi.treilly

 

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