FI Evening Grain Comments 12/07/20

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Five
major reports are due out Thursday, MPOB, China CASDE, Conab, USDA Export Sales & USDA S&D update. 

 

 

Spreads
– end of modified session

Nearby spreads		CT	1:19 PM
			Chng
SF/H	-4.25/-4.25		-2.50
SF/K	-5/-5		-4.50
SH/K	-0.5/-0.5		-2.00
SMF/H	-0.6/-0.5		-2.10
SMF/K	0.5/0.6		-3.70
SMH/K	1/1.2		-1.60
BOF/H	0.18/0.19		-0.10
BOF/K	0.4/0.42		-0.14
BOH/K	0.2/0.22		-0.06
CH/K	-2.75/-2.5		0.00
CH/N	-3.75/-3.5		0.00
WH/K	-3.5/-3.25		-0.25
KWH/K	-5.75/-5.5		0.50
MWH/K	-8.5/-8.25		0.00

 

 

 

 

 

 

 

 

 

Weather

 

MOST
IMPORTANT WEATHER IN THE WORLD

• Friday
  into Sunday  morning rainfall was minimal in Argentina except for the northwest where up to 0.45 inch of moisture resulted in Santiago del Estero and Salta
• Highest
  temperatures Friday and Saturday were in the 70s and lower 80s Fahrenheit followed by lows in the 40s and 50s
  
• The
  milder temperatures helped keep evaporative moisture loss rates low while weather conditions were dry
• Topsoil
  moisture Friday was rated favorably from the northeast half of Cordoba, and much of Santa Fe and Entre Rios northward to Formosa and Chaco while marginally adequate to short elsewhere
• Subsoil
  moisture Friday was rated favorably in Buenos Aires, eastern Formosa and parts of Corrientes along with northeastern and extreme southern Santa and short to very short elsewhere
• Overall,
  crop moisture stress was kept low through the weekend, but worry over soil moisture continues in the longer term outlook, although crops are not very bad shape today because of recent rain.
  

 

• Argentina
  weather will be mostly dry through Wednesday and then showers will scatter from southwest to northeast Thursday through Saturday, but resulting rainfall is unlikely to be great enough to seriously bolster soil moisture
• Moisture
  totals will vary from 0.05 to 0.25 inch with local totals 0.75 inch in the south and 0.20 to 0.75 inch with local totals of 1.00 to 2.00 inches in the north
• Temperatures
  will be seasonable with a slight warmer than usual bias during this coming week
• The
  precipitation will be a little too erratic for generalized improvements in soil or crop conditions except in the northeast where it will stay favorably moist

 

• Argentina
  weather next week will include some scattered showers in the north Monday and Tuesday and more Thursday in the central and northeastern parts of the nation
• 0.15
  to 0.60 inch of rain will result with local totals to 0.80 inch except in the northeast where a few areas may receive 1.00 to 2.50  inches
• Temperatures
  will continue seasonable with a slight warmer bias during the December 14-20 period
• A
  general lack of rain in southern Argentina Dec. 14 – 20 will make two weeks without much rain and sufficient warm weather will have topsoil moisture more significantly depleted by the end of the second week stressing crops more seriously than that of this
  first week

 

• Brazil
  rainfall was most significant from Mato Grosso do Sul to southwestern Sao Paulo, Parana and northern Santa Catarina during the 48 hours ending dawn Sunday with amounts of 0.83 to 2.79 inches. One location in southeastern Parana reported 4.21 inches
• Rain
  also fell significantly in parts of southern Minas Gerais and northern Mato Grosso where 1.00 to 2.87 inches resulted
• In
  contrast, rainfall elsewhere was rarely more than 0.68 inch, although as much as 1.18 inches occurred in northern Sao Paulo
• Net
  drying occurred in most of the areas reporting rainfall less than 0.50 inch
• Highest
  afternoon temperatures in southern Brazil were in the upper 70s and some 80s Fahrenheit while readings in the north were in the upper 80s and 90s with a few extremes near and just over 100
  
• Lowest
  morning temperatures were in the 50s and 60s south and 60s and 70s north
• Weekend
  precipitation expanded the area of increased soil moisture to central Mato Grosso after being mostly saturated from the heart of Parana and southern Paraguay into Rio Grande de Sul Brazil Friday. Subsoil moisture was still extremely low in parts of Bolivia,
  southern Mato Grosso and Goias because of inadequate weekend rain and continued warm to hot temperatures after the ground was already rated too dry Friday.
  

 

• Brazil
  rainfall this workweek will be restricted from southeastern Bolivia and the western and southern parts of Mato Grosso do Sul to Parana, Santa Catarina and portions of Rio Grande do Sul where net drying is likely, despite a few some showers and thunderstorms
• Rain
  will fall frequently from Mato Grosso and Tocantins to Minas Gerais and Sao Paulo where 1.00 to 3.00 inches is expected with local totals of 3.00 to 6.00 inches
• A
  new wave of rain will pass through Rio Grande do Sul to Parana, far southern Mato Grosso do Sul and southern Paraguay during the weekend with rainfall to 0.60 inch in Rio Grande do Sul and 0.40 to 2.00 inches in other areas with locally more
• This
  week’s driest weather will be in Piaui, Pernambuco and parts of Bahia, but amounts might also be quite limited in southeastern Bolivia and northwestern Mato Grosso do Sul
• Temperatures
  will be seasonable

 

• Brazil
  weather Dec. 14-20 will scatter rain and thunderstorms throughout Brazil, but resulting fall may be light and sporadic in southeastern Bolivia, northwestern Mato Grosso do Sul and some neighboring areas
• Rain
  is likely in most other areas at one time or another, although southern Rio Grande do Sul and parts of Uruguay may not get much rain
• Rain
  totals will vary widely in the Dec. 14-20 period with some of the greatest amounts possible from southern Paraguay into western Parana and in northern Rio Grande do Sul as well as from Minas Gerais to Tocantins and western Bahia
• Most
  daily amounts will range from 0.30 to 0.80 inch with local totals of 1.00 to 1.60 inches
• The
  lightest rainfall areas may not get more than 0.75 inch through the entire week
• Temperatures
  should continue seasonable
• Brazil’s
  bottom line is not bad with most areas getting rain at one time or another and temperatures in a seasonable range.  There is a little concern about crop moisture and potential stress in northwestern Mato Grosso do Sul, southeastern Bolivia and a few immediate
  neighboring areas. There is also reason for concern in parts of Bahia and Piaui, although more so in this first week of the outlook than next week.

Source:
World Weather Inc. and FI

 

 

Bloomberg
Ag Calendar

Monday,
Dec. 7:

• China
  trade data on soybean and meat imports for November
• Ivory
  Coast cocoa arrivals
• USDA
  weekly corn, soybean, wheat export inspections, 11am
• HOLIDAY:
  Thailand

Tuesday,
Dec. 8:

• Australia’s
  Abares releases quarterly agricultural commodities report
• French
  agriculture ministry to publish crop estimates
• UkrAgroConsult
  Black Sea Grain conference
• BRF
  Day
• Brazil
  Unica cane crush, sugar production (tentative)
• National
  Grain & Feed Association Country Elevator Conference, 10am

Wednesday,
Dec. 9:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• National
  Grain & Feed Association Country Elevator Conference, 10am

Thursday,
Dec. 10:

• China’s
  agriculture ministry (CASDE) releases monthly report on supply, demand, 10am local
• Malaysian
  Palm Oil Board releases data on November stockpiles, exports, production, 12:30pm local
• FranceAgriMer
  monthly crop report
• Agroinvestor
  Russian agriculture conference
• Port
  of Rouen data on French grain exports
• Conab’s
  data on area, output and yield of soybeans and corn in Brazil, 7am
• National
  Grain & Feed Association Country Elevator Conference, 10am
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• HOLIDAY:
  Thailand

Friday,
Dec. 11:

• ICE
  Futures Europe weekly commitments of traders report
• HOLIDAY:
  Thailand

Source:
Bloomberg and FI

 

 

 

 

Bloomberg
Trade Estimates:

 

 

 

USDA
inspections versus Reuters trade range                                            

Wheat            
530,781           versus  400000-600000           range

Corn               
734,079           versus  750000-1100000         range

Soybeans        
2,297,316        versus  1500000-2200000       range

 

 

 

Corn.

• CBOT
  March corn ended 3.50 cents higher after opening lower.  A rebound in wheat, slightly drier midday SA weather forecast and technical buying underpinned corn.    
• Today
  was the first day of the Goldman Roll.
• Funds
  bought an estimated net 15,000 corn contracts. 
• The
  USD was 16 points higher and WTI crude was $0.59 lower, during midafternoon trading.
  
• USDA
  US corn export inspections as of December 03, 2020 were 734,079 tons, below a range of trade expectations, below 1,034,505 tons previous week and compares to 489,612 tons year ago. Major countries included Mexico for 314,771 tons, China Main for 271,335 tons,
  and Costa Rica for 57,908 tons.
• Ukraine
  exported 6.1 million tons of corn as of December 7, down from 8.6 million tons during the same period a year ago, a 15.2 percent decrease.  Wheat was down to 12.1 million tons from 13.8 million. 
  
• Ukraine
  reported an unknown strain of bird flu in the southern part of the country. 
  
• Per
  rumors late last week, today we heard Cofco has been in for a good amount of Brazilian Aug-Nov corn.  This could be for other countries, or a play to get long cash with cheaper summer Brazilian premiums. 
  
• Argentina’s
  markets will be closed Tuesday for holiday. 
• China
  suspended beef imports from a sixth Australian beef supplier. 
• France
  discovered a H5 strain of bird flu on a duck farm in the southwestern part of the country. 
  
• IHS
  Markit on Friday cut their 2020 EU corn production estimate by 2 million tons to 60 million. USDA is at 64.2 million tons. 
  

 

Prospects
for Swine Feed Costs in 2021

Langemeier,
M. “Prospects for Swine Feed Costs in 2021.” farmdoc daily (10):207, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, December 4, 2020.

https://farmdocdaily.illinois.edu/2020/12/prospects-for-swine-feed-costs-in-2021.html?utm_source=farmdoc+daily+and+Farm+Policy+News+Updates&utm_campaign=323fcf4cd0-FDD_RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_2caf2f9764-323fcf4cd0-173649469

 

USDA
ERS Outlook for U.S. Agricultural Trade

https://www.ers.usda.gov/topics/international-markets-us-trade/us-agricultural-trade/outlook-for-us-agricultural-trade/

 

Corn
Export Developments

• South
  Korea’s NOFI bought an additional 69,000 tons of US PNW corn at $236.73 a ton c&f. 
  
• Taiwan’s
  MFIG seeks 65,000 tons of optional origin corn on Wednesday for February/March shipment. 
  

 

 

Updated
11/30/20

March
corn is seen
trading in a $4.15 and $4.40 range. 

 

Soybean
complex.
 

• A
  wide two-sided trade that ended 4.50 cents lower for January soybeans, $2.30 lower for Jan meal and 38 points lower for Jan soybean oil.  Front month soybean and meal contracts lost big ground to July onward contracts. 
  
• US
  Jan and Mar soybeans and soybean meal traded back near last week’s lows after SA saw as expected rain over the weekend but paired most of its losses by mid-morning in part to excellent USDA export inspections that included a very large upward revision to the
  previous week and China taking 1.55 million tons as of Dec 3.  Then the midday week one weather outlook was released, reducing rain for from northern into central and eastern Argentina and Rio Grande do Sul Saturday into Sunday and from Mato Grosso into Goias
  Saturday into next Monday, per GFS model.  But then nearby soybean spreads were under a good amount of pressure into the close. 
  
• Funds
  sold an estimated net 1,000 soybeans, 1,000 soybean meal and sold 2,000 soybean oil.
  
• Bloomberg
  reported China was buying new crop US soybeans. We hear this on Friday. Note China has no US soybeans on the USDA export sales books.  We also heard chatter there were soybean cargoes for Jan/Feb traded out of USA to China along with some recent ethanol business
  rumored. 
• Soybean
  oil in general today was lower in large part following a 45 MYR decline in Malaysian palm (cash was down $2.00/ton).  January soybean oil broke through a 37.89 support level, and next support is seen at 37.35, its 20-day MA.  
  
• Malaysia’s
  palm oil inventories in November were projected to decline 2% from the previous month to 1.54 million in part to a 10% drop in production.
  

 

• USDA
  US soybean export inspections as of December 03, 2020 were 2,297,316 tons, above a range of trade expectations, below 2,423,867 tons previous week and compares to 1,402,627 tons year ago. Major countries included China Main for 1,551,216 tons, Egypt for 256,141
  tons, and Thailand for 85,331 tons.  Soybeans were upward revised 16.3 million bushels for previous week. 
  
• China
  November soybean imports were 9.59 million tons, up from 8.28 million November 2019 and a record for the month.  China meat imports in November were 775,000 tons.  China soybean futures were down slightly, meal down 0.2%, soybean oil up 1.0 percent and palm
  up 1.2%. 
• Argentina
  saw minimal showers over the weekend except for the northwest were up to 0.50” resulted.  Crop stress was low. Argentina will see rain southwest to northeast Thursday through Saturday.  Brazil’s Mato Grosso do Sul to southwestern Sao Paulo, Parana and northern
  Santa Catarina saw rain over the weekend.  Rain will fall this week across Mato Grosso and Tocantins to Minas Gerais and Sao Paulo where 1.00 to 3.00 inches is expected.  It will remain dry across Piaui, Pernambuco and parts of Bahia.  The Midday weather models
  were drier for the first week of the forecast. 
• Argentina
  is on holiday today and Tuesday.
• Argentina’s
  SOEA oilseed union should have ended their strike on Sunday.
• Brazil
  soybean planting for 2020-21 reached 90% of the estimated area on Thursday, compared to 87% the previous week and 93% a year ago, according to AgRural.
• Strategie
  Grains – EU and Britain rapeseed production could reach 18.2 million tons from a very low 17.2 million tons this year.
  
• U.S.
  biodiesel credits traded at a three-year high, at $1.00 during the session on Friday.

 

 

The
European Union reported soybean import licenses since July 1 at 6.216 million tons, below 6.294 million tons a year ago. European Union soybean meal import licenses are running at 7.946 million tons so far for 2020-21, below 8.516 million tons a year ago.
EU palm oil import licenses are running at 2.648 million tons for 2020-21, above 2.481 million tons a year ago, or up 7 percent.

European
Union rapeseed import licenses since July 1 were 3.011 million tons, down 14 percent from 3.482 million tons from the same period a year ago.

 

 

Oilseeds
Export Developments

• USDA
  AMS seeks 17,200 tons of bulk crude degummed soybean oil on December 9 for Mozambique. 
  

 

 

 

Updated
12/02/20

January
soybeans are seen in a $11.40‐$12.10 range

January
soybean meal is seen trading in a $375 and $405 range

January
soybean oil is seen in a 36.00-38.50 cent range.

 

Wheat

• Chicago
  March wheat traded lower this morning, at a 2-month low, with March below its 100-day MA ($5.7225), but prices rallied to close higher in Chicago and KC on technical buying.  Good French crop conditions and large production estimates for Australia and Canada
  along with waning US exports were initially weighing on US and EU wheat futures.  Some traders found the recent depression in Chicago wheat prices as an opportunity to bottom pick. 
  
• Funds
  bought an estimated net 3,000 contracts of CBOT SRW. 
• USDA
  US all-wheat export inspections as of December 03, 2020 were 530,781 tons, within a range of trade expectations, below 534,387 tons previous week and compares to 366,014 tons year ago. Major countries included Japan for 90,568 tons, Mexico for 82,840 tons,
  and China Main for 68,249 tons.
• Chicago,
  IL wheat basis was unchanged/up 10 cents to option/-10 under. 
• March
  milling wheat was down 0.75 at 201.25 euros.
• Russian
  fob 12.5 percent protein wheat export prices were down $2/ton to $252/ton from the previous week, according to IKAR.  Egypt said they have enough wheat reserves for 5.7 months. 
  
• The
  Australian ABARES said agricultural exports will total A$49.24 billion ($36.59 billion) for the current season, up 1% from its previous estimate of A$48.8 billion in September, in part to agricultural production bouncing back from the drought.  ABARES acknowledged
  that the outlook for Australia’s barley and wine industries was depressed by China’s decision to impose tariffs on each. (Reuters)
• ABARES
  warned China may impose trade restrictions on Australian wheat exports. 
• The
  European Union granted export licenses for 500 tons of soft wheat exports, bringing cumulative 2020-21 soft wheat export commitments to 10.438 MMT, well down from 13.192 million tons committed at this time last year, a 21 percent decrease.  Imports are up
  11 percent from year ago at 1.120 million tons.

 

 

Export
Developments.

• Japan
  seeks 131,305 tons of milling wheat on December 9. 
• Algeria
  may have passed on 25,000 tons of feed barley for LF January shipment. 
• Jordan
  seeks 120,000 tons of feed barley on Dec 8 for March-May shipment. 
• Jordan
  seeks 120,000 tons of wheat on Dec 9 for April through FH May shipment. 
• Qatar
  seeks 100,000 tons of feed barley on December 8, optional origin. 

 

Rice/Other

·        
Today South Korea seeks 45,458 tons of US rice for arrival around April 30 and May 31. 

 

Updated
12/7/20

March
Chicago wheat is seen in a $5.60‐$6.20 range (lowered 10 cents)

March
KC wheat is seen in a $5.25‐$5.70 range (lowered 5 & 10)

March
MN wheat is seen in a $5.35‐$5.65 range (down 5 & 10)