FI Morning Grain Comments 01/14/21

Jan 14, 2021







PDF attached

 

Morning. 

 

Light
news day. USDA export sales did not include much in the way of fresh Chinese commitments, rather some sales switched from unknown categories.  Sales were supportive for soybean meal.  Corn and soybeans appear to be seeing a light technical bounce while wheat
traders are awaiting Russian export duty developments when officials meet on Friday. The USD is 17 points higher, energies weaker and US tocks higher.  Malaysian palm oil futures fell 165 MRY overnight and cash dropped $33/ton which explains the weakness in
soybean oil this morning.  Offshore values suggest meal/oil spreading. 

 

 

CME
RAISES WHEAT FUTURES MAINTENANCE MARGINS BY 9.1% TO $1,800 PER CONTRACT FROM $1,650 FOR MARCH 2021, effective Jan 14 close. 

CME
RAISES CORN FUTURES MAINTENANCE MARGINS BY 18.2% TO $1,300 PER CONTRACT FROM $1,100 FOR MARCH 2021 (Reuters)

 

 

Weather

  • US
    CPC: La Nina 95 percent to continue across the Northern Hemisphere through winter. 
  • We
    believe lingering conditions may not favor US Midwestern planting season amid too much rain. 

 

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. 24 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. Some of the dry pocket in Sao Paulo and southwestern Minas Gerais
received rain overnight and more is expected to help relieve crops of moisture stress. A boost in rainfall is still needed in parts of Mato Grosso, however, and it will be coming in time.

            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. Drying this weekend and next week will fix that problem. Winter crops are in fair to good condition.

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.

 

MARKET
WEATHER MENTALITY FOR WHEAT:  Colder weather expected in Russia and Ukraine 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. Eastern Europe will trend colder in the last week of January.

           
Argentina’s wheat and barley harvest should be mostly complete.

            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

 

Source:
World Weather Inc. and FI

 

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
export sales

·        
USDA export sales for soybeans of 908,000 tons for 2020-21 were above expectations and new-crop sales were withing expectations at 326,000 tons.  For current crop year, it included China (758,300
MT, including 264,000 MT switched from unknown destinations and decreases of 79,800 MT), followed by the EU and Mexico.  For 2021-22, net sales included 326,000 MT for unknown destinations (260,000 MT) and China (66,000 MT).  Exports of 2,040,000 tons. 

·        
Soybean meal sales were good at 337,400 tons, a marketing year high, and shipments ok at 212,100 tons.  El Salvador, Vietnam and the Philippines were good buyers. 

·        
Soybean oil sales were low at 11,100 tons but shipments were good at 49,200 tons.

·        
USDA corn export sales of 1.438 million tons were above expectations.  Japan and Columbia were big buyers.  China was in there for 88,000 tons but most of that was switched from unknown.

·        
USDA export sales for sorghum were very good at 190,900 tons and included unknown for 120,000 tons.

·        
USDA pork sales were 23,800 tons. 

·        
All-wheat USDA export sales of 221,900 tons were at the low end of expectations.

 

 

 

Macros

US
Initial Jobless Claims Jan 9 965K (est 795K; prevR 784K; prev 787K)

-US
Continuing Claims Jan 2 5.271 Mln (est 5.061 Mln;  prev 5.072 Mln)

 

US
Import Price Index (M/M) Dec 0.9% (est 0.7%; PREV 0.2%; prev 0.1%)

-US
Import Price Index Ex Petroleum (M/M) Dec 0.4% (est 0.1%; prev 0.0%)

-US
Import Price Index (Y/Y) Dec -0.3% (est -0.8%; prev -1.0%)

-US
Export Price Index (M/M) Dec 1.1% (est 0.4%; prev 0.6%)

-US
Export Price Index (Y/Y) Dec 0.2% (prev -1.1%)

 

 

Corn.

 

Corn
Export Developments

  • 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 172 cents on our calculation (143 previous), compared to 145 last week and 98 year ago.
  • China
    futures:

 

Oilseeds
Export Developments

 

Wheat

  • Chicago
    wheat was lower again, KC mixed and MN higher.  Traders are awaiting Russian export duty developments when officials meet on Friday. Japan bought 116,700 tons of food wheat. 
  • Parts
    of TX and OK will see beneficial precipitation through the weekend. 
  • Russia
    plans to resume government grain sales from intervention stocks starting Jan 20. 
  • Rosario
    grains exchange (BCR): Argentina wheat production 17 million tons, up from 16.5 MMT projected in December. 
  • CBOT
    Chicago wheat open interest was up 2,789 contracts (March down 3,436).
  • Funds
    on     Wednesday
    sold an estimated net 5,000 Chicago wheat contracts. 
  • EU
    March milling wheat was up 1.00 at 227.75 euros.
  • On
    January 15, Russian officials will meet to discuss the export taxes on grains and oilseeds.  Russian may expand their export tax beyond oilseed and wheat exports.  Russia is considering a barley and corn export tax of 10 euros ($12) per ton and 25 euros per
    ton, respectively, between Feb. 1 and March 31, 2021.  The latest for wheat we heard was 70 euros / ton from March.  Timing on the export duties should be clearer when the official meet on Friday. 

 

Export
Developments.

  • Japan
    bought 116,700 tons of food wheat.  Original details of the tender as follows. 

  • 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. 
  • 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

  • The
    US banned cotton based products from selected China regions over labor conditions, but we are still trying to get a direction on what goods will fall under this rule.  Either way you look at it, keep in mind the US ships cotton to China and finished goods
    come back to the US. 
  • 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. 

 

 

 

Export Sales Highlights  

This
summary is based on reports from exporters for the period January 1-7, 2021.

 

Wheat:  Net sales of 221,900 metric tons (MT) for 2020/2021 were down 19 percent from the previous week and 49 percent
from the prior 4-week average.  Increases primarily for Bangladesh (55,000 MT), Mexico (46,200 MT, including decreases of 5,800 MT), Malaysia (34,000 MT, switched from unknown destinations), unknown destinations (25,000 MT), and Nigeria (23,800 MT, including
decreases of 3,100 MT), were offset by reductions for Guatemala (6,100 MT), El Salvador (3,900 MT), and China (1,600 MT).  For 2021/2022, net sales of 10,100 MT were primarily for Guatemala (6,100 MT).  Exports of 358,500 MT were down 14 percent from the previous
week and 2 percent from the prior 4-week average.  The destinations were primarily to South Korea (68,400 MT), Japan (65,700 MT), China (58,400 MT), the Philippines (56,900 MT), and Mexico (46,800 MT).   

Optional Origin Sales:  For 2020/2021, the current outstanding balance of 10,000 MT, all Spain. 

Corn:  Net sales of 1,437,700 MT for 2020/2021 were up 92 percent from the previous week and 34 percent from the prior 4-week average.  Increases
primarily for Japan (401,500 MT, including 66,400 MT switched from unknown destinations), unknown destinations (334,500 MT), Colombia (125,900 MT, including 40,000 MT switched from unknown destinations and decreases of 84,100 MT), Mexico (124,100 MT, including
decreases of 200 MT), and China (88,500 MT, including 70,000 MT switched from unknown destinations and decreases of 1,100 MT), were offset by reductions for El Salvador (24,000 MT).  Exports of 1,464,300 MT were up 43 percent from the previous week and 41
percent from the prior 4-week average.  The destinations were primarily to China (555,500 MT), Mexico (300,300 MT), Japan (168,400 MT), Colombia (89,700 MT), and Peru (75,400 MT).   

Optional Origin Sales:  For 2020/2021, the current outstanding balance of 1,351,400 MT is for South Korea (838,000 MT), unknown destinations (224,000
MT), Taiwan (140,000 MT), China (65,000 MT), Japan (52,000 MT), and Ukraine (32,400 MT).   

Barley:  No net sales or exports were reported for the week. 

Sorghum:  Net sales of 190,900 MT for 2020/2021 were up noticeably from the previous week and up 76 percent from the prior 4-week average.  Increases
were reported for unknown destinations (120,000 MT) and China (70,900 MT, including 68,000 MT switched from unknown destinations and decreases of 55,000 MT).  Exports of 74,300 MT were down 13 percent from the previous week and 58 percent from the prior 4-week
average.  The destination was primarily to China.  

Rice:  Net sales of 12,900 MT for 2020/2021 were down 66 percent from the previous week and 86 percent from the prior 4-week average.  Increases
were primarily for Canada (3,600 MT), Jordan (2,800 MT), Saudi Arabia (2,700 MT), Mexico (1,400 MT), and Guatemala (1,200 MT).    Exports of 19,200 MT were down 81 percent from the previous week and 82 percent from the prior 4-week average.  The destinations
were primarily to Japan (13,500 MT), Canada (2,400 MT), Mexico (1,400 MT), Saudi Arabia (700 MT), and Haiti (400 MT). 

Exports for Own Account:  For 2020/2021, new exports for own account totaling 100 MT were for Canada.  The current exports for own account outstanding
balance is 100 MT, all Canada. 

Soybeans:  Net sales of 908,000 MT for 2020/2021 were up noticeably from the previous week and up 93 percent from the prior 4-week average.  Increases
primarily for China (758,300 MT, including 264,000 MT switched from unknown destinations and decreases of 79,800 MT), Spain (143,000 MT, including 130,000 MT switched from unknown destinations), Mexico (98,100 MT, including decreases 200 MT), the Netherlands
(85,500 MT, including 78,000 MT switched from unknown destinations), and Pakistan (70,100 MT, including 66,000 MT switched from unknown destinations), were offset by reductions primarily for unknown destinations (586,300 MT).  For 2021/2022, net sales of 326,000
MT were for unknown destinations (260,000 MT) and China (66,000 MT).  Exports of 2,040,000 MT were up 10 percent from the previous week, but down 12 percent from the prior 4-week average.  The destinations were primarily to China (1,166,000 MT), Spain (143,000
MT), Mexico (109,600 MT), Vietnam (89,700 MT), and the Netherlands (85,500 MT).   

Exports for Own Account:  For 2020/2021, the current exports for own account outstanding balance is 6,100 MT, all Canada. 

Soybean Cake and Meal:  Net sales of 337,400 MT for 2020/2021–marketing-year high–were up noticeably from the previous week and up 97 percent
from the prior 4-week average.  Increases primarily for El Salvador (82,000 MT), Vietnam (49,900 MT, including decreases of 1,100 MT), the Philippines (45,100 MT, including decreases of 1,000 MT), Chile (35,000 MT), and Ecuador (31,700 MT, including decreases
of 100 MT), were offset by reductions for unknown destinations (7,000 MT), Nepal (1,000 MT), and Colombia (300 MT).  For 2021/2022, total net sales of 60,000 MT were for unknown destinations.  Exports of 212,100 MT were down 24 percent from the previous week
and from the prior 4-week average.  The destinations were primarily to Colombia (52,600 MT), Vietnam (50,100 MT), Mexico (42,800 MT), Canada (20,800 MT), and the United Kingdom (19,500 MT).  

Soybean Oil:  Net sales of 11,100 MT for 2020/2021 were up noticeably from the previous week, but down 52 percent from the prior 4-week average.  Increases
primarily for unknown destinations (8,500 MT), Mexico (2,500 MT), Guatemala (700 MT, switched from Jamaica), and Canada (100 MT), were offset by reductions for Jamaica (700 MT).  Exports of 49,200 MT were up noticeably from the previous and from the prior
4-week average.  The destinations were primarily to India (36,000 MT), Guatemala (7,500 MT), Jamaica (2,800 MT), Mexico (2,200 MT), and Canada (400 MT). 

Cotton:  Net sales of 326,000 RB for 2020/2021 were up noticeably from
the previous week and up 2 percent from the prior 4-week average.  Increases primarily for China (151,200 RB, including 2,900 RB switched from Hong Kong and decreases of 15,400 RB), Pakistan (56,600 RB), Turkey (39,000 RB), Bangladesh (24,300 RB, including
decreases of 6,000 RB), and Vietnam (23,800 RB, including decreases of 10,000 RB), were offset by reductions for Hong Kong (2,900 RB) and Malaysia (1,500 RB).  For 2021/2022, net sales of 50,300 RB were for Malaysia (22,000 RB), Guatemala (13,200 RB), Bangladesh
(8,800 RB), and Peru (6,300 RB).  Exports of 274,600 RB were up 2 percent from the previous week and from the prior 4-week average.  Exports were primarily to China (156,800 RB), Vietnam (40,800 RB), Pakistan (26,400 RB), Mexico (11,300 RB), and Turkey (11,000
RB).  Net sales of Pima totaling 35,900 RB–a marketing-year high–were up noticeably from the previous week and from the prior 4-week average.  Increases primarily for India (20,700 RB), Vietnam (8,800 RB), China (7,000 RB, including 2,600 RB switched from
Hong Kong), Pakistan (1,300 RB), and Thailand (1,300 RB), were offset by reductions for Hong Kong (2,600 RB) and Bangladesh (1,500 RB).  For 2021/2022, total net sales of 400 RB were for India.  Exports of 10,300 RB were down 17 percent from the previous week
and 37 percent from the prior 4-week average.  The destinations were primarily to China (5,200 RB), India (1,700 RB), Pakistan (1,500 RB), Peru (1,000 RB), and Egypt (700 RB).   

Exports for Own Account:  For 2020/2021, new exports for own account totaling 100 RB were to China.  The current exports for own account outstanding
balance of 4,500 RB is for China.  

Hides and Skins:  Net sales of 340,400 pieces for 2021, primarily
for China (232,400 whole cattle hides, including decreases of 8,100 pieces), South Korea (55,600 whole cattle hides, including decreases of 700 pieces), Mexico (25,600 whole cattle hides, including decreases of 2,100 pieces), Taiwan (10,900 whole cattle hides,
including decreases of 700 pieces), and Brazil (5,600 whole cattle hides), were offset by reductions primarily for Indonesia (500 pieces).  Additionally, net sales reductions of 500 kip skins were for Belgium.  Exports of 357,800
pieces for 2021 were primarily to China (249,900 pieces), South Korea (56,000 pieces), Mexico (17,700 pieces), Taiwan (9,300 pieces), and Thailand (8,400 pieces).  Additionally, exports of 5,100 kip skins were reported to Belgium.   

Net sales of 140,000 wet blues for 2021 were reported for Italy (47,400 unsplit and 38,000 grain splits, including decreases of 100 unsplit), Vietnam (33,400 unsplit
and 100 grain splits, including decreases of 100 unsplit), Thailand (11,500 unsplit, including decreases of 500 unsplit), China (8,000 unsplit), and Taiwan (1,700 grain splits), were offset by reductions primarily for Germany (100 grain splits) and Brazil
(100 unsplit).  Exports of 130,100 wet blues for 2021 were primarily to Vietnam (43,200 unsplit), China (30,100 unsplit and 3,200 grain splits), Italy (10,400 unsplit and 7,900 grain splits), Thailand (13,500 unsplit), and Taiwan (8,000 unsplit). Net
sales of splits, 450,800 pounds for 2021, were primarily for Vietnam (427,000 pounds, including decreases of 800 pounds).  Total exports of 538,300 pounds were to Vietnam. 

Beef:  Net sales
of 16,800 MT reported for 2021, increases were primarily for South Korea (4,900 MT, including decreases of 300 MT), Japan (4,100 MT, including decreases of 300 MT), China (2,800 MT, including decreases of 200 MT), Mexico (1,300 MT, including decreases of 100
MT), and Taiwan (800 MT, including decreases of 100 MT).  Exports of 14,200 MT were primarily to Japan (4,200 MT), South Korea (4,000 MT), China (1,600 MT), Mexico (1,400 MT), and Taiwan (900 MT).

 

Pork:  Net sales of 23,800 MT reported for 2021, increases primarily for Mexico
(6,600 MT, including decreases of 700 MT), Japan (3,400 MT, including decreases of 200 MT), South Korea (3,300 MT, including decreases of 500 MT), the Philippines (2,400 MT), and Colombia (2,400 MT, including decreases of 100 MT), were offset by reductions
primarily for Australia (100 MT).  Exports of 30,000 MT were primarily to China (11,500 MT), Mexico (6,900 MT), Japan (3,300 MT), South Korea (2,300 MT), and Canada (1,500 MT). 

January 14, 2021                                 1             FOREIGN AGRICULTURAL SERVICE/USDA

 

U.S. EXPORT SALES FOR WEEK ENDING 01/07/2021 

  





























 

CURRENT MARKETING YEAR

NEXT MARKETING YEAR

COMMODITY

NET SALES

OUTSTANDING SALES

WEEKLY EXPORTS

ACCUMULATED EXPORTS

NET SALES

OUTSTANDING SALES

CURRENT YEAR

YEAR
AGO

CURRENT YEAR

YEAR
AGO

 

THOUSAND METRIC TONS

WHEAT

 

 

 

 

 

 

 

 

   HRW    

93.0

1,446.4

1,537.6

106.2

5,770.9

5,612.2

0.0

22.0

   SRW    

9.6

499.2

461.1

5.5

1,087.8

1,663.4

0.0

145.0

   HRS     

130.3

1,816.4

1,383.1

67.3

4,294.9

4,201.1

0.0

45.0

   WHITE   

-11.0

2,456.5

1,055.8

179.5

3,098.5

2,859.8

10.1

36.1

   DURUM  

0.0

100.8

187.1

0.0

488.9

623.8

0.0

0.0

     TOTAL

221.9

6,319.3

4,624.6

358.5

14,741.0

14,960.3

10.1

248.1

BARLEY

0.0

13.7

30.2

0.0

16.9

29.5

0.0

12.5

CORN

1,437.7

28,661.5

9,867.0

1,464.3

16,720.6

9,434.3

0.0

757.0

SORGHUM

190.9

3,219.2

514.1

74.3

2,059.5

615.3

0.0

478.0

SOYBEANS

908.0

14,561.1

7,240.6

2,040.0

41,114.9

23,172.9

326.0

1,217.6

SOY MEAL

337.4

2,822.8

2,963.5

212.1

3,464.7

3,024.5

60.0

78.9

SOY OIL

11.1

247.9

144.2

49.2

254.3

320.2

0.0

0.6

RICE

 

 

 

 

 

 

 

 

   L G RGH

1.2

202.9

327.4

0.0

787.0

677.9

0.0

0.0

   M S RGH

0.0

15.6

14.9

0.6

13.3

15.9

0.0

0.0

   L G BRN

1.6

10.5

20.8

0.6

22.7

19.9

0.0

0.0

   M&S BR

0.3

45.3

43.4

0.2

50.7

15.8

0.0

0.0

   L G MLD

5.0

72.2

149.4

2.9

298.0

491.9

0.0

0.0

   M S MLD

4.8

171.5

163.8

14.8

211.0

261.3

0.0

0.0

     TOTAL

12.9

518.1

719.7

19.2

1,382.7

1,482.8

0.0

0.0

COTTON

 

THOUSAND RUNNING BALES      

   UPLAND

326.0

6,066.2

7,420.8

274.6

5,798.0

4,438.6

50.3

846.3

   PIMA

35.9

243.1

207.8

10.3

352.7

180.1

0.4

1.1

 

 

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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