FI Morning Grain Comments 01/15/21

PDF attached

 

Morning. 

 

As
we head into a long holiday weekend for the US, soybeans and products are giving up some gains on long liquidation.  Argentina saw rain across La Pampa and far western BA over the past day.  Brazil saw scattered showers that included the dry area of Bahia. 
Corn is lower in part from profit taking while wheat is higher on Russian export duties. 

 

 

 

Weather

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

            Additional
rain in Argentina Thursday night and that expected through Saturday will further bolster topsoil moisture in key summer crop areas improving late season corn, sorghum, peanuts and soybeans for a little while. Drying next week will raise the need for more moisture
and showers late this month into February will be very important for production potentials.

            In
Brazil, an erratic rainfall pattern of late has not had much impact on crop development, but the rain has been more variable in coverage and intensity relative to most summers. There could be a few pockets of dryness that are not showing up in the data that
could result in lower yields, but that should not be a huge problem.

            South
Africa weather will remain good for the next couple of weeks, although net drying will raise the need for precipitation later this month and in February.

Sufficient
snow cover will be present in the western CIS to protect winter rapeseed from any threatening cold that might come along in the next couple of weeks.

            India’s
unharvested summer crops in the south have received 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 especially in unirrigated fields.

           
China and Europe’s rapeseed crops are suspected of being in favorable condition.

            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 through the weekend 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 dry over the next ten days, but wheat and other winter crops are favorably rated. 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.

            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

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

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

 

 

 

 

 

Macros

 

Corn.

• Corn
  futures are lower in the front months on profit taking ahead of the long US holiday weekend.  News was light.  With back month contracts higher there also might be traders unwinding recent bull spreads.  Don’t discount additional US producer selling today. 
  
• CBOT
  open interest for corn was up 8,300 contracts (March was down 16,721 per CME). 
  

 

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.  

• CBOT
  soybean complex is trading lower on long liquidation headed into a three day holiday weekend for the US. 
  
• Argentina
  saw rain across La Pampa and far western BA over the past day.  Brazil saw scattered showers that included the dry area of Bahia. 
  
• Offshore
  values are suggesting a lower trade for both soybean meal and oil. 
• The
  NOPA crush is due out today and the trade is estimating 185.2 crush and soybean oil stocks of 1712.  Trade estimates versus previous month are below. 
  
• CBOT
  open interest for soybeans was up 11,112 contracts. 
• China
  cash crush margins on our calculation are 198 cents (178 previous), compared to 98 year ago.
  
• China
  bought a few cargoes of US soybeans on Thursday that included new crop US soybeans.  
  
• Offshore
  values this morning were leading CBOT soybean oil 123 points lower (81 lower week to date) and meal $3.40 lower ($4.00 lower for the week).
  
• Rotterdam
  soybean oil values are up about 10 euros, rapeseed oil down 10, and Rotterdam meal unchanged to 9.50 euros higher. 
  
• Malaysian
  palm oil was down sharply by little more than 100 points and cash was down $20/ton.  Palm futures are down 10 percent for the week. 
  
• SGS
  reported Malaysian palm oil exports at 403,255 tons for the Jan 1-15 period, down a large 44 percent from the same period last month. ITS reported a 42 percent decline in palm exports for FH Jan to 416,565 tons.  AmSpec reported 426,276 tons, down 41.8 percent. 
  
• Malaysian
  palm oil futures: 

• China
  cash crush margins were 198 cents on our calculation (172 previous), compared to 145 last week and 98 year ago.
  
• China
  futures:

 

 

Oilseeds
Export Developments

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

• US
  wheat is higher after Russia said they will impose higher export duties than what they previously planned.  
  
• Russia
  will raise its wheat export tax to 50 euros ($60.68) per ton beginning March 1 until June 30 from the 25 euro-per-ton tax set for Feb. 15 to March 1 – economy minister via Reuters.  Late yesterday there was talk Russia may extend their wheat export tax beyond
  June 30, according to a letter from the AgMin to the Grain Exporters Union. 
  
• The
  EU awarded 440,000 tons of Ukraine corn imports and 51,072 tons of Ukraine wheat imports. 
  
• Ukraine
  grain exports are running 18 percent lower from last season at 27.2 million tons. 
  
• Parts
  of TX and OK will see beneficial precipitation over the next few days. 
• CBOT
  Chicago wheat open interest was up 7,155 contracts.
• EU
  March milling wheat was up 4.50 at 234.25 euros.

 

 

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.