PDF attached

 

Morning
USDA
report day.  China updated their S&D’s overnight.

 

CBOT
wheat is higher after several global import tenders were announced this week and news Russia may increase export tariffs on wheat from their original announcement of 25 euros per ton starting February. Soybeans and meal are higher.  Malaysian palm futures
were down 102 MYR overnight, pressuring soybean oil.  Cash palm dropped $22.50 / ton.  Corn is higher on positioning ahead of the USDA report.  China’s AgMin raised its forecasts for corn imports for 2020-21 to 10 million tons from 7 million tons previous. 
China’s AgMin raised soybean imports to 98.1 million tons for 2020-21 marketing year, up from 95.1 million previous.  Most of the trade has a higher estimate for China soybean imports. 
Egypt
passed on wheat.  South Korea bought 50,000 tons of US milling wheat for April shipment.  Japan seeks 116,700 tons of food wheat this week.  Jordan received three offers for 120,000 tons of barley.  Turkey bought about 155,000 tons of feed barley and Turkey’s
TMO bought about 155,000 tons of corn with lowest price around $265.65 a ton c&f with shipment between Jan. 25 and Feb. 15. 

 

 

 

Weather

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

            Recent
rain in Argentina and that which is expected later this week will be sufficient to carry crops into the latter part of this month without a huge amount of stress, but quick drying is expected this weekend through Jan. 23 and that will eventually bring back
concern over dryness especially in the southwest half of the nation.

            Brazil
crop weather has not changed today with most of the nation expecting rain – at least in key grain and oilseed production areas. The environment should be supportive of improved crop conditions. There is a pocket of dryness in Sao Paulo, southern Goias and
extreme eastern Mato Grosso do Sul that must be filled in with moisture soon to prevent crop stress from evolving, but that area should get rain in time to prevent any significant crop development issues. A boost in rain would also benefit northern Mato Grosso.

           
South Africa weather will remain good for the next couple of weeks. Sufficient snow cover will be present in the western CIS to protect winter rapeseed when cooling occurs later this month.

            India’s
unharvested summer crops in the south are getting too much rain and need to dry out. Winter crops have improved in some areas because of recent rain. Australia’s sorghum has also improved with recent rain, but more moisture is needed.

            No
crop damage has occurred to China’s rapeseed because of cold weather last week and Europe crops will not be threatened with damaging cold in this coming week.

            Overall,
weather today will likely produce a mixed influence on market mentality with some bearish bias.

 

MARKET
WEATHER MENTALITY FOR WHEAT:  Colder weather expected in Russia over the next couple of weeks should not adversely impact winter crops because of deep snow cover. Russia’s Southern Region will get additional rain and snow this week further improving the potential
for crop development in the spring – at least in areas that got planted and established favorably during the autumn.

No
threatening cold is expected in Europe or China during the coming week. India’s weather will trend a little drier this week, but recent rain improved wheat and other winter crops.

            Argentina’s
wheat harvest advanced well until Sunday when some delay to fieldwork took place. Much of the crop has been harvested, but late season fieldwork will advance around periods of rain this week.

            U.S.
wheat areas in the central and northwestern Plains may pick up a little snow cover in the next two weeks as gradual cooling occurs. The snow will help protect crops from any bitter cold that might evolve. However, there is no threat of crop damaging conditions
for at least the coming week and probably ten days.

           
Winter crops in southern Canada’s Prairies and the northwestern U.S. Plains need snow to better protect the region against colder weather coming later this month.

            Overall,
weather today will have a low impact on market weather mentality. The bottom line will be mixed.

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

Tuesday,
Jan. 12:

  • USDA’s
    monthly World Agricultural Supply and Demand (WASDE) report, noon
  • USDA
    quarterly soybean, sorghum, corn, barley stocks

Wednesday,
Jan. 13:

  • EIA
    weekly U.S. ethanol inventories, production, 10:30am
  • Vietnam
    customs data on coffee, rice and rubber exports in December
  • FranceAgriMer
    monthly crop report
  • ANZ
    Commodity Price
  • Malaysia
    Cocoa Board 4Q cocoa grind data
  • Conab’s
    data on yield, area and output of corn and soybeans in Brazil

Thursday,
Jan. 14:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • China
    customs to publish 2020 trade data, including imports of soy, edible oils, meat and rubber
  • AB
    Foods trading update
  • International
    Grains Council monthly report
  • Port
    of Rouen data on French grain exports
  • EARNINGS:
    Suedzucker, Agrana

Friday,
Jan. 15:

  • 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
  • Cocoa
    Association of Asia releases 4Q 2020 cocoa grind data
  • Malaysia’s
    Jan. 1-15 palm oil export data
  • New
    Zealand Food Prices

Source:
Bloomberg and FI

 

 

 

 

Reuters
trade estimates for USDA reports

 

 

 

 

 

 

Conab
is due out Wed

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
279,390         versus   250000-450000  range

Corn             
1,130,744     versus   800000-1200000                range

Soybeans   
1,778,581     versus   1000000-2000000             range

 

 

Macros

 

Corn.

  • Corn
    is higher on positioning ahead of the USDA report and an upward revision to China corn imports by the China AgMin. 
  • China’s
    AgMin
    raised
    its forecasts for corn imports for

    2020-
    21
    to
    10
    million tons from 7 million tons previous. 
    Domestic
    corn prices hit record highs this week. Corn consumption in feed was seen at 185 million tons, up 2 million tons. Industrial demand for corn was estimated at 82 million tons and corn production was adjusted to 260.67 million tons from 264.71 million the previous
    month.
  • USDA
    will release their annual reports at 11:00 CT. 
  • Today
    is day 3 of the “Goldman Roll.” 
  • Funds
    on Monday sold an estimated net 13,000 corn. 
  • CBOT
    open interest for corn was down 3,764 contracts (March was down 14,972 per CME). 
  • Soybean
    and Corn Advisory:
    • 2020/21
      Brazil Corn Estimate Unchanged at 102.0 Million Tons
    • 2020/21
      Argentina Corn Estimate Lowered 0.5 mt to 44.5 Million
  • Argentina
    producers are still on strike that started early Monday. 
  • Traders
    are looking for USDA to lower the 2020 US corn crop (14.470 Reuters estimate against USDA current 14.507 billion) and tighten US 2020-21 ending corn stocks to 1.599 billion from 1.702 billion.  For December 1 US corn stocks, a Reuters trade guess stands at
    11.951 billion bushels, up from 11.327 billion year earlier and if realized, a three year high.  USDA may trim the 2020-21 Argentina corn production estimate.  A Reuters trade guess looks for USDA to lower Argentina’s corn crop to 47.4 million tons from 49
    million current.  Brazil corn production was estimated at 107.7 million tons from 110 million current. 
  • USDA
    US corn export inspections as of January 07, 2021 were 1,130,744 tons, within a range of trade expectations, above 1,089,440 tons previous week and compares to 483,559 tons year ago. Major countries included China for 488,493 tons, Mexico for 154,305 tons,
    and Japan for 126,337 tons.
  • After
    the US Supreme Court announced they will review a lower court ruling (10th Circuit Court) that limits the government powers to exempt small refineries from RFS standards, RIN prices tumbled on Monday after it was announced President Trump may grant
    some biofuel blending waivers for 2019, according to sources.  There are currently 32 pending petitions for 2019.  The Supreme Court will review the ruling in April.  We think a reversal in that decision could benefit the biodiesel industry.  For small refiner
    decisions,
    EPA
    may announce SRE 32 2019 exemptions on Wednesday. 

 

Corn
Export Developments

  • Turkey’s
    TMO bought about 155,000 tons of corn with lowest price around $265.65 a ton c&f with shipment between Jan. 25 and Feb. 15. 
  • 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.

 

 

Soybean
complex
.
 

  • China
    cash crush margins were 143 cents on our calculation, compared to 145 last week and 98 year ago.
  • China
    futures:

 

Oilseeds
Export Developments

  • The
    USDA seeks 7,430 tons of vegetable oil under the PL480 program on January 14 for shipment during Feb 16 to Mar 15 (Mar 1-31 for plants at ports).
  • USDA
    seeks 6,390 tons of vegetable oil on January 20 under the PL480 program for March 1-31 shipment (Mar 16-Apr 15 for plants at ports). 

 

Wheat

 

Export
Developments.

  • Egypt
    passed on wheat. They received 4 offers with lowest believed to be $292.97/ton.
  • South
    Korea bought 50,000 tons of US milling wheat for April shipment. 
    22,710
    tons of soft white wheat of 9.8% to 10.5% protein content bought at $263.87 a ton and 2,320 tons of soft white wheat of a maximum 8.5% protein at $269.76 a ton.  Another 14,220 tons of hard red winter wheat of a minimum 11.5% protein content was bought at
    $273.80 a ton and 10,750 tons of northern spring wheat of a minimum 14% protein content was bought at an estimated $272.33 a ton.  South Korea’s Kofmia was in for 25,560 tons of Canadian 13.5% wheat and 50,000 tons of US wheat for April loading.
  • South
    Korea bought 50,000 tons of Australian milling wheat.
     
    They bought around 44,000 tons of Korean Australian standard white noodle blend wheat (KASW) at an estimated $279.95 a ton FOB and 6,000 tons of Australian hard wheat number 2 (AH2) at around $287 a ton FOB. Shipment was sought between the second half of April
    and first half of May.
  • Japan
    seeks 116,700 tons of food wheat this week. 

  • Jordan
    received three offers for 120,000 tons of barley.
  • Jordan
    seeks 120,000 tons of wheat on January 13 for July-August shipment. 
  • Turkey
    bought about 130,000 tons of feed barley at $54.90-$268.50/ton.  Shipment was sought between Jan. 26 and Feb. 16.
  • Bangladesh
    seeks 50,000 tons of wheat in January 13 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. 
  • Turkey
    seeks 400,000 tons of milling wheat on Jan 19 for Jan through Feb 25 shipment. 
  • Results
    awaited:  Syria seeks 25,000 tons of Black Sea wheat on January 11. 
  • Bangladesh
    seeks 50,000 tons of wheat in January 18 for shipment within 40 days of contract signing. 
  • Bangladesh
    seeks 50,000 tons of wheat in January 25 for shipment within 40 days of contract signing. 

 

Rice/Other

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

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

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

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

 

 

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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