PDF Attached
We
are bullish soybeans, corn, and wheat, in that order. Big data day with China, MPOB palm, Brazil Conab and USDA updates. USDA’s S&D had the biggest impact on futures price movement. We revised our US soybean balance sheet to reflect higher US exports.
US soybean balance attached.
Reaction:
Bullish
all around. Largest surprise was USDA lowered its US soybean carryout to 190 million bushels, without changing exports. Reduction in US soybean and corn production and China corn trade were some of the main features.
USDA
NASS and OCE executive summaries
https://www.nass.usda.gov/Newsroom/Executive_Briefings/index.php
https://www.usda.gov/oce/commodity/wasde/Secretary_Briefing/index.htm
Corn.
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USDA
took US corn production down 215 million bushels to 14.507 billion bushels in large part to a 2.6 bushel reduction in the yield to 175.8. The trade was looking for 177.7. USDA left their area unchanged.
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Production
for US corn and soybeans came in below trade expectations, by 152 and 81 million bushels, respectively.
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USDA
lowered the 2020-21 US corn carryout by 465 million bushels. USDA lowered feed use by 75 million bushels, partially offsetting the 215-million-bushel reduction in supply.
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But
USDA decided to raise the US corn export forecast by 325 million bushels to 2.650 billion, above 1.778 billion from 2019-20.
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Global
corn production was slashed 14.2 million tons to 1.145 million, 2.5 percent above last year. Stocks were taken down 9.0 million tons. US stocks were down 11.8 million tons.
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There
were finally major changes to China’s corn balance sheet for 2020-21. Imports were lifted 6 million tons to 13 million tons, but well below the 22 million tons projected by USDA’s Attaché. Note USDA increased the US export projection by 8.2 million tons.
The boost in the US export projection reflected not only China imports, but a massive reduction in Ukraine exports to 22.50 million tons from 30.5 million tons.
Soybean
complex.
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Another
large chop to the US soybean carryout again sent futures flying higher on USDA report day.
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USDA
reported the USDA soybean yield down 0.9/bu from the previous month to 50.7 bushels per acre. The trade was looking for 51.6. USDA left the area unchanged.
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USDA
lowered the US soybean carryout by 100 million bushels to 190 million bushels, 45 million below trade expectations. This was the largest surprise in today’s report. The reduction of 465 million bushels in the corn carryout may rival it. 2020-21 soybean
stocks are now projected 64 percent below 2019-20. -
Remarkably,
even after Census reported a higher than expected September soybean figurer, USDA left its export forecast unchanged at 2.20 billion bushels, still well above 1.676 billion for 2019-20.
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The
US crush was also left unchanged. They took sed use up 3 million bushels.
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USDA
adjusted their 2019-20 US carry out to reflect NASS crush and Census trade balance. The US 2020-21 soybean meal carrying was lowered 59,000 short tons. USDA took 2020-21 US soybean meal production up 9,000 short tons, resulting in a 50,000 short ton decline
in supply. USDA left its 2020-21 US soybean meal demand unchanged, resulting in a 50,000 short ton reduction to the carryout to 350,000 short tons.
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Recall
USDA reported end of September soybean oil stocks at 1.849 billion pounds. After adjusting for the latest trade balance, USDA decided to raised biodiesel by 50 million pounds for the 2019-20 marketing year to 7.900 billion. This compares to their unchanged
outlook for soybean oil for biodiesel use of 8.100 billion pounds for 2019-20.
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US
soybean oil stocks for 2020-21 declined 109 million pounds to 1.864 billion as USDA left production and demand unchanged for the current marketing year.
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Global
soybean production was taken down 5.8 million tons to 362.6 million tons, 26 million higher than 2019-20, largely to changes in US output and 2.5 million ton decrease in Argentina output. Brazil was unchanged.
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China
soybean imports were left unchanged at 100 million, above 98.5 million tons in 2019-20.
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2020-21
global soybean stocks were taken down 2.2 million tons to 86.5 million, 9.3 percent below 2019-20. Global demand is expected to be very strong this crop year.
Wheat
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USDA
lowered the US all-wheat carryout by 6 million bushels, in part to adjusting wheat for food use higher by 5 million bushels and seed use by 1 million bushels.
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USDA
raised HRW wheat stocks by 4 million tons to 338 million, well below 506 million at the end of 2019-20. Soft wheat stocks were taken up 5 million bushels to 107 million bushels. White stocks were downward revised 7 million and durum was lowered 3 million
bushels. -
Global
wheat production was taken down 0.7 million tons to 772.4 million tons. -
Argentina
wheat production was taken down 1 million tons to 18 million tons, which still could be too high.
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China
wheat imports were taken up 0.5 million tons to 8 million, nearly up 50 percent from 2019-20.
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Global
wheat stocks of 320.5 million tons are down 1.0 million from last month and 6.5 percent higher from 2019-20.
MOST
IMPORTANT WEATHER IN THE WORLD
- Beneficial
rain fell in the southeast half of Argentina and a few areas southward into La Pampa and western Buenos Aires Monday and early today - More
rain is needed throughout the nation, but only the west and south will experience some periodic rainfall for a while - Net
drying in central and eastern Argentina over the next ten days will lead to summer crop stress in areas with poor soil moisture; including Entre Rios, Santa Fe and parts of Corrientes - Brazil
rainfall began increasing in center south crop areas Monday - The
moisture was extremely good, although light - More
moisture is needed and should be forthcoming to all of center south, center west and portions of the interior south during the next ten days - All
summer crops will benefit from the moisture - South
Africa rainfall will continue concentrated on central and some eastern crop areas over the next ten days maintaining a very good outlook for summer coarse grain, oilseed and cotton planting and establishment - Greater
rain may be needed in western summer crop areas soon - Winter
wheat, barley and canola maturation and harvesting are advancing around the periodic rainfall - India
rainfall will continue most significant in the south and periodically in the far eastern states during the next ten days - Late
season summer crop development, maturation and harvesting will advance around the precipitation - Winter
crop planting will also continue to advance most significantly in the central and northern parts of the nation where winter crop establishment has been good thus far
- Eastern
China weather is expected to remain mostly very good for the next two weeks - Net
drying through the weekend will promote summer crop harvesting and late season wheat and rapeseed planting - Rain
expected next week from east-central China into the North China Plain and Yellow River Basin will be extremely well timed for winter crop establishment - Australia
precipitation over the next ten days will be erratic and mostly too light to have a big impact on agriculture - Dry
conditions will be perfect maturing winter crops and supporting their harvest - Dry
conditions will also support additional summer crop planting - Rain
is needed for dryland summer crops and not much is expected for a while - Russia’s
Southern Region will experience little precipitation of significance over the next ten days and temperatures will trend cooler - The
environment will push more winter crops from Ukraine and the Balkan Countries of Europe to Kazakhstan into a state of semi-dormancy - Recent
precipitation improved winter crop establishment in many areas, but snow cover will be needed to adequately protect the poorly established winter crops from damage due to periodic bitter cold this winter - Most
other areas in Russia, western Ukraine, Belarus and the Baltic States will have had a favorable winter crop establishment season this year and production potentials are good for the spring - Europe
weather remains unusually tranquil because of a dominating high pressure ridge aloft that is keeping precipitation limited to northwestern parts of the continent - Winter
crops have established and some are trending dormancy - Winter
crops in Spain are being planted and should be establishing relatively well - North
Africa is seeking greater rainfall to support the best possible wheat and barley planting this year - Some
planting is under way with late November and December most important for planting and establishment - U.S.
crop weather will be mixed for a while - Rain,
snow and freezing rain are expected in the upper Midwest today and in the Great Lakes region tonight and Wednesday - Rain
will impact crops in the southeastern states Wednesday into Friday with some additional rain expected from Tropical Storm Eta during the weekend - U.S.
hard red winter wheat areas will need more moisture especially in the west to ensure the best emergence and establishment - Rain
in central and eastern wheat areas of Kansas and Nebraska Monday was good for future crop establishment - Some
snow fell in the northwest part of wheat country overnight with accumulations light - U.S.
Northern Plains have snow on the ground in Most of Montana, northwestern most North Dakota and from central South Dakota into a part of west-central Minnesota - Snow
accumulations in the east Monday and overnight were mostly less than 3.50 inches
- U.S.
Delta weather will be good for fieldwork of all kinds during the next ten days - U.S.
Southeastern States will experience delays to farming activity Wednesday through Friday because of expected rain and a few more showers will occur during the weekend as remnants of Tropical Storm Eta mo9ve into the region - Subtropical
Storm Theta was 960 miles southwest of the Azores this morning and was expected to move easterly for a while this week posing no threat to land other than the Azores possibly - Theta
has set a record for the most named tropical or subtropical cyclones in a single season – now at 29 - Tropical
Storm Eta was located 60 miles northwest of the western tip of Cuba at 22.6 north, 85.3 west at 0600 CST today moving to the south at 5 mph and producing maximum sustained wind speeds of 60 mph - Eta
will move northward Wednesday into Friday - The
storm will intensify somewhat today and then weaken as it approaches to the western Florida Panhandle or southwestern Alabama late this week and into the weekend - Landfall
is possible in late this weekend in Alabama or far western parts of the Florida Panhandle - Waves
of precipitation are expected in the Pacific Northwest and Great Basin during the next ten days with some rain in central and northern California as well
- The
moisture will be welcome and should improve soil moisture for better winter crop establishment - Mountain
snowpack should increase for better runoff in the spring - U.S.
Corn and Soybean areas of the Midwest will experience alternating periods of rain and sunshine over the next couple of weeks which may slow some forms of fieldwork and a little drier weather might be welcome - However,
most of the rain will be great enough to seriously impact fieldwork for an extended period of time - Southeast
Canada’s grain and oilseed areas will experience a little precipitation today into Wednesday and again during late weekend and early part of next week; dry weather will occur most other days - The
environment will be good for harvesting - Tropical
Storm Etau moved into Vietnam’s Central Highlands overnight - The
storm produced up to 3.50 inches of rain through 0001 GMT today and more has fallen since that time - Damage
to crops was unlikely to be significant - Tropical
Storm Vamco was located 413 miles east of Manila, Philippines today moving west northwesterly and expected to become a typhoon before reaching southern Luzon Island Wednesday - The
storm will then move across the South China Sea late this week with landfall in central Vietnam during the late weekend - Excessive
rainfall may impact both northern parts of the Philippines and central Vietnam
- Damage
to crops and property is expected in both countries - Multiple
precipitation events impacting Vietnam’s central coast over the next week will result in rain totals of 6.00 to 15.00 inches and local totals in excess of 20.00 inches.
- Flooding
has been and will continue a serious impact along the central Vietnam coast where impressive rain totals in the past 30 days - More
disruption to commerce and shipping will occur because of the additional rain - Southern
Oscillation Index was +2.29 this morning; the index will rise later this week - Mexico
precipitation will be quite limited over the coming week favoring summer crop maturation and harvesting
- Portions
of Central America will remain wetter than usual into mid-month - Rain
will be greatest in Guatemala, El Salvador, Costa Rica, Nicaragua and Panama
·
West-central Africa will experience erratic rain through the next ten days favoring crop areas closest to the coast
- Daily
rainfall is expected to be decreasing as time moves along which is normal for this time of year
·
East-central Africa rain will be erratic and light over the coming week in Ethiopia while rain occurs frequently from Uganda and southwestern Kenya into Tanzania
- Ethiopia
will be wetter next week while showers and thunderstorms continue elsewhere
·
New Zealand rainfall will be near to above average in North Island while near to below average in South Island
- Temperatures
will be near to below average
Source:
World Weather Inc.
Tuesday,
Nov. 10:
- USDA’s
monthly World Agricultural Supply and Demand (WASDE) report, noon - China’s
agriculture ministry (CASDE) releases monthly report on supply, demand - Malaysian
Palm Oil Council webinar on China’s post-pandemic palm oil demand - Malaysian
Palm Oil Board releases data on end-October stockpiles, exports, production - Conab’s
data on area, output and yield of soybeans and corn in Brazil - Malaysia
Nov. 1-10 palm oil export data from AmSpec, SGS
Wednesday,
Nov. 11:
- EARNINGS:
JBS, Barry Callebaut - HOLIDAY:
U.S. (Veterans Day, federal govt closed, CME trading unaffected), France, Canada
Thursday,
Nov. 12:
- Port
of Rouen data on French grain exports - Vietnam
customs data on coffee, rice and rubber exports in October - EIA
U.S. weekly ethanol inventories, production - EARNINGS:
BayWa, Marfrig
Friday,
Nov. 13:
- ICE
Futures Europe weekly commitments of traders report, 1:30pm (6:30pm London)
- NOTE:
CFTC Commitments of Traders report, usually released on Fridays, is scheduled for Monday, Nov. 16, due to U.S. federal holiday - USDA
weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am - FranceAgriMer
weekly update on crop conditions - New
Zealand Food Prices
Saturday,
Nov. 14:
- China
Animal Agriculture Association summit on hog recovery, ASF vaccine progress
Source:
Bloomberg and FI
Macros
Goldman
Sachs Sees Brent Prices To Average $47/Bbl In Q1 2021 (Down From $51/Bbl Previously)
Corn.
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US
CBOT corn futures traded higher pre-USDA report and the S&D report added to the gains. USDA lowered US corn production by a more than expected amount and increased exports by a smashing 325 million bushels. See USDA notes starting on page one. December
corn during the session hit a contract high. It was up 15.50 cents to $4.23.
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Funds
bought an estimated net 57,000 corn contracts. -
In
its CASDE update, China said the new-crop corn production was not significantly affected by typhoons and harvest was nearly complete. China left their 2020 corn production unchanged at 264.71 million tons, 1.5 percent above 2019.
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China’s
October consumer inflation dropped to a 11 year low in part to falling pork prices. Food inflation was 2% and CPI was down slightly.
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Conab
lowered their Brazil corn estimate for 2020-21 by 0.3 million to 104.9 million tons from the previous month. Brazil estimated the 2020-21 total grain crop at 268.94 million tons from 268.67 million in October, and up from 257.06 million tons in 2019-20.
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Anec
sees Brazil corn exports during November reaching 4.8 million tons tons versus 4.15 tons previous.
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Today
was day 3 of the GS roll. -
WTI
was up $1.08 and USD 3 points lower at the time this was written (1:30 pm CT).
·
German confirmed a H5N8 bird flu case in the northern part of the country. The government asked poultry producers to keep birds indoors.
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48,000 chickens will be culled at a northern Netherlands farm after an outbreak of H5N8 bird flu was discovered.
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A Bloomberg survey calls for weekly ethanol production to be up to 975 thousand barrels from 961 thousand from the previous week, and stocks to end up at 20.114 million barrels, up from 19.675 million.
Attaché:
Canada: Grain and Feed Update
Total
trade year (TY) 2019/20 wheat exports were down four percent despite a significant increase during the second half of the year. Canada exported 5.1 million metric tons (MMT) of durum in TY 2019/20, on a 5.0 MMT crop, drawing down stocks. Total wheat production
is estimated to have increased nearly five percent compared to the 2019 crop and both yields, and quality are described as excellent.
Corn
Export Developments
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Under
the 24-hour announcement system, US exporters sold 130,000 tons of corn to South Korea for 2020-21 delivery.
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South
Korea’s Korea Corn Processing Industry Association (KOCOPIA) bought about 60,000 tons of corn for arrival in South Korea in February 2021with two price options: -
If
sourced from worldwide optional origins – $253.93 a ton c&f -
If
sourced from the United States only – $261.50 a ton c&f. -
Iranian
state-owned animal feed importer SLAL seeks up to 60,000 tons of animal feed corn, 60,000 tons of feed barley and 60,000 tons of soymeal, on Wednesday, Nov. 11, for shipment in December 2020 and in January 2021.
Updated
11/10/20
March
corn is seen trading up into the $4.45-$4.55 area.