FI Morning Grain Comments 11/05/20

PDF attached

 

Morning.

 

Another
sharply higher trade in soybeans with corn and wheat following on inflation hedging, possible Chinese interest for US oilseeds, feedgrains, and products, and a steep decline in the USD.  There was talk China bought 5-6 US soybean cargoes on Wednesday.  China
cash crush margins, on our analyses, are down again, but remain high enough to promote buying.  Malaysian palm oil is up for the third consecutive day, by 111 points in the futures market.  Egypt’s GASC seeks local vegetable oils on November 9 for Dec 25-Jan
15 arrival (2,000 sunflower oil and 3,000 soybean oil).  Egypt is in for wheat for Dec 15-Jan 18 shipment and lowest offer is Russian origin at $261.50/ton.  Saudi Arabia is in for 600,000 tons of hard wheat.  Japan bought 91,612 tons of milling wheat.   Trade
estimates for USDA’s November S&D are attached.  

 

 

 

Weather
and Crop Progress

 

 

 

Source: 
World Weather Inc. 

 

 

 

 

 

Bloomberg
Ag Calendar

Thursday,
Nov. 5:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• China’s
  CNGOIC to publish monthly soybean and corn reports
• FAO
  World Food Price Index
• Guatemala
  October coffee exports
• Port
  of Rouen data on French grain exports
• Malaysian
  Nov. 1-5 palm oil export data

Friday,
Nov. 6:

• 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
• FranceAgriMer
  weekly update on crop conditions
• HOLIDAY:
  Argentina

Saturday,
Nov. 7

• China’s
  trade data on soybeans and meat imports

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

USDA
Export Sales

·        
Soybeans came in at the higher end of expectations at 1.531 million tons, slightly below the previous week and included 810,700 tons for China.

·        
Soybean meal export sales of 331,400 tons were ok and soybean oil of 6,800 tons were again low.  Shipment so products slowed for soybean meal but improved for soybean oil.

·        
USDA export sales for corn of 2.611 million tons topped expectations and included 1.063 million tons for Mexico and 212,300 tons for China.  Sorghum sales hit it out of the ballpark with 365,000
tons, including 340,000 tons for China.  Pork sales were an excellent 42,200 tons and included 10,300 tons for China.

·        
All-wheat export sales of 597,100 tons were within expectations. 

 

 

 

Macros

US
Initial Jobless Claims: 751K (est 735K, prevR 758K)

US
Continuing Claims: 7.285Mln (est 7.2Mln, prevR 7.823Mln)

US
Initial Jobless Claims 751K A Decrease Of 7,000 From Previous Week’s Revised Level – Official

US
Non-Farm Productivity (Q3P): 4.9% (est 5.6%, prev 10.1%)

 

Corn.

• Higher
  trade in corn following strength ion soybeans and renewed hopes China will by US DDGS and ethanol.  The USD traded at an October low.  USDA export sales were very good. 
  
• Goldman
  Roll starts Friday, the fifth business day of the month. 
• CBOT
  corn open interest was up 7,059 contracts. 
• WTI
  was down $0.24 and USD 75 points lower. 
• Weekly
  US ethanol production was up 20,000 barrels after rising 28,000 the week before, to 961,000 barrels, down 5.2 percent from the comparable week a year ago.  A Bloomberg poll looked for weekly US ethanol production to be up 4,000.  Ethanol stocks increased 74,000
  barrels to 19.675 million, down about 10 percent from this time a year ago.  Traders were looking for a 156,000-barrel increase. 
  

 

Corn
Export Developments

• None
  reported

 

Soybean
complex.  

• Another
  sharply higher trade in soybeans to a 4-year high on inflation hedging, possible Chinese interest for US oilseeds, feedgrains, and products, and a steep decline in the USD.  A drier outlook over the next couple of weeks for South America is adding to the support. 
  
• There
  was talk China bought 5-6 US soybean cargoes on Wednesday, mostly for January shipment. 
  

• CBOT
  soybean open interest was down 4,490 contracts. 

• China
  crushers were thought to have bought 4-5 Brazilian soybean cargoes for first half 2021 shipment.

• Offshore
  values this morning were leading CBOT soybean oil 42 higher and meal $1.10 higher. 
  
• Rotterdam
  soybean oil values were about 25 higher, rapeseed oil 15 euros higher, and Rotterdam meal 6-10 euros higher from this time previous session. 
  
• China
  cash crush margins were 112 cents on out our calculation (122 previous) compared to 139 last week and 155 year ago. 
  

• ITS:
  Nov 1-5 palm exports 232,000 tons, down 8 percent MOM. 
• Malaysian
  palm futures are up for the third day 

 

 

Oilseeds
Export Developments

• Egypt’s
  GASC seeks local vegetable oils on November 9 for Dec 25-Jan 15 arrival (2,000 sunflower oil and 3,000 soybean oil). 
  

 

 

Wheat

• Wheat
  futures are higher on strong global demand and lower USD.  Egypt and Saudi Arabia are in for wheat.  Japan bought milling wheat. 
  
• World
  food price index rose for the fifth consecutive month to 100.9 points versus a revised 97.8 for September (97.9 previous), a 7.2 percent monthly increase and 16.5 percent above year ago. 
  

• FAO
  lowered their global grain production by nearly 13 million tons to 2.75 billion tons, in part to lower EU and Ukraine corn output.  World wheat was lowered 2.3 million tons to 762.7 million tons. 
  
• US
  wheat futures Paris (Matif) December wheat was up 2.75 euros at 209.50 euros. 
  

 

Export
Developments.

• Egypt
  is in for wheat for Dec 15-Jan 18 shipment and lowest offer is Russian origin at $261.50/ton. 
  
• Saudi
  Arabia seeks 600,000 tons of 12.5% protein wheat for February through March delivery on Friday. 
  
• Japan
  bought 91,612 tons of milling wheat this week from the US, Canada and Australia. 
  

• Syria
  seeks 150,000 tons of wheat on November 9.  They were in on October 28 for 200,000 tons. 
  
• Turkey
  seeks 550,000 tons of wheat on November 11 for Nov 24 and Dec 18 shipment. 
  
• Lowest
  offer $286.20/ton:  Pakistan seeks 320,000 tons of wheat 3 for arrival by November 3 for arrival by the end of January. 
  

 

Rice/Other

·        
Syria seeks 37,400 tons of white rice on November 23.  White Chinese/Egyptian short grain white rice of third or fourth class was sought. Shipment is sought within three months of order confirmation. 

 

 

 

 

U.S. EXPORT SALES FOR WEEK ENDING 10/29/2020       

 

	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	199.3	1,633.2	1,126.0	119.3	4,484.4	4,351.1	0.0	22.0
SRW	56.3	418.6	580.1	22.4	937.7	1,252.7	0.0	100.0
HRS	163.4	1,616.6	1,232.7	112.8	3,108.5	2,878.6	0.0	45.0
WHITE	176.6	1,936.2	921.3	63.4	2,080.8	1,925.1	0.0	20.0
DURUM	1.5	200.9	312.5	1.5	340.0	358.3	0.0	0.0
TOTAL	597.1	5,805.5	4,172.5	319.4	10,951.4	10,765.9	0.0	187.0
BARLEY	0.0	31.1	37.2	0.5	10.9	21.3	0.0	0.0
CORN	2,610.9	26,335.3	7,954.1	728.8	6,853.9	3,939.0	541.0	747.0
SORGHUM	365.0	3,027.0	492.5	94.9	614.8	46.2	55.0	259.0
SOYBEANS	1,530.5	31,853.2	11,564.6	2,528.2	16,647.5	9,333.7	0.0	69.0
SOY MEAL	331.4	3,596.4	3,228.2	229.3	875.5	939.8	0.0	18.1
SOY OIL	6.8	174.2	132.2	22.9	53.8	104.7	0.0	0.0
RICE
L G RGH	8.4	464.5	421.5	61.9	215.2	372.5	0.0	0.0
M S RGH	0.0	20.4	18.4	0.3	8.5	12.3	0.0	0.0
L G BRN	0.2	11.3	14.6	0.9	10.3	13.5	0.0	0.0
M&S BR	0.0	18.7	11.8	1.1	30.9	1.3	0.0	0.0
L G MLD	4.7	87.1	117.5	3.7	112.7	325.0	0.0	0.0
M S MLD	15.1	146.6	149.9	19.0	103.9	150.3	0.0	0.0
TOTAL	28.3	748.8	733.7	87.0	481.6	874.9	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	115.6	5,667.3	7,064.6	270.0	3,198.0	2,484.1	55.7	576.8
PIMA	16.8	266.3	156.0	21.9	161.0	105.3	0.0	0.7

 

Export Sales Highlights

This
summary is based on reports from exporters for the period October 23-29, 2020.

• Wheat:  Net
  sales of 597,100 metric tons (MT) for 2020/2021 were down 20 percent from the previous week, but up 10 percent from the prior 4-week average.  Increases were primarily for unknown destinations (138,500 MT), Taiwan (88,600 MT), South Korea (86,300 MT, including
  decreases of 500 MT), the Philippines (59,000 MT), and Colombia (50,300 MT).  Exports of 319,400 MT were down 28 percent from the previous week and 31 percent from the prior 4-week average.  The destinations were primarily to South Korea (83,800 MT), Japan
  (65,900 MT), Nigeria (58,300 MT), Venezuela (45,400 MT, including 35,000 MT late – see below), and Jamaica (22,200 MT).   Optional Origin Sales:  For 2020/2021, the current outstanding balance of 10,000 MT, all Spain.  Late Reporting:  For 2020/2021, net sales
  totaling 35,000 MT were reported late. The destination was Venezuela.  Exports totaling 57,100 MT were reported late.  The destinations were Venezuela (35,000 MT) and Italy (22,100 MT). 
  
• Corn: 
  Net sales of 2,610,900 MT for 2020/2021 were up 16 percent from the previous week and 75 percent from the prior 4-week average.  Increases primarily for Mexico (1,062,600 MT, including 13,000 MT switched from unknown destinations and decreases of 5,300 MT),
  unknown destinations (781,600 MT), China (212,300 MT, including decreases of 1,400 MT), South Korea (132,700 MT), and Colombia (127,700 MT, including 49,000 MT switched from unknown destinations and decreases of 5,400 MT), were offset by reductions for Guatemala
  (800 MT).  For 2021/2022, total net sales of 541,000 MT were for Mexico.  Exports of 728,800 MT were down 1 percent from the previous week and 14 percent from the prior 4-week average.  The destinations were primarily to China (330,300 MT), Mexico (208,600
  MT), Colombia (101,100 MT), Honduras (28,100 MT), and Japan (23,600 MT).  Optional Origin Sales:  For 2020/2021, new optional origin sales of 327,000 MT were reported for South Korea (262,000 MT) and Japan (65,000 MT).  Decreases totaling 30,000 MT were reported
  for Ukraine.  The current outstanding balance of 1,327,600 MT is for South Korea (382,000 MT), Vietnam (260,000 MT), Taiwan (205,000 MT), Japan (188,000 MT), unknown destinations (167,600 MT), and Ukraine (125,000 MT). 
  Late Reporting: For 2020/2021, exports totaling 7,200 MT were reported late. The destination was Jamaica.
• Barley: 
  No net sales were reported for the week.  Exports of 500 MT were to Japan (300 MT) and Taiwan (200 MT).
• Sorghum: 
  Net sales of 365,000 MT for 2020/2021 resulting in increases for China (340,500 MT, including 98,000 MT switched from unknown destinations and decreases of 3,900 MT) and unknown destinations (25,000 MT), were offset by reductions for Mexico (500 MT).  For
  2021/2022, total net sales of 55,000 MT were for unknown destinations.  Exports of 94,900 MT were to China.
• Rice: 
  Net sales of 28,300 MT for
  2020/2021 were down 77 percent from the previous week and 75 percent from the prior 4-week average.  Increases were primarily for Jordan (6,600 MT), Mexico (6,100 MT, including decreases of 100 MT), Japan (4,300 MT), Brazil (2,700 MT), and Saudi Arabia (2,400
  MT).  Exports of 87,000 MT–a
  marketing-year high–were up 59 percent from the previous week and 83 percent from the prior 4-week average.  The destinations were primarily to Mexico (33,200 MT), Brazil (29,700 MT), Japan (13,100 MT), Saudi Arabia (2,900 MT), and Canada (2,900 MT).
• Soybeans: 
  Net sales of 1,530,500 MT for 2020/2021 were down 6 percent from the previous week and 32 percent from the prior 4-week average.  Increases primarily for China (810,700 MT, including 578,600 MT switched from unknown destinations and decreases of 66,600 MT),
  Egypt (283,800 MT, including decreases of 200 MT), Mexico (92,700 MT, including decreases of 1,500 MT), the Netherlands (85,800 MT, including 78,000 MT switched from unknown destinations), and Canada (71,400 MT, including decreases of 600 MT), were offset
  by reductions primarily for unknown destinations (27,000 MT).  Exports of 2,528,200 MT were down 6 percent from the previous week, but up 6 percent from the prior 4-week average.  The destinations were primarily to China (1,938,700 MT), Bangladesh (106,000
  MT), Mexico (87,200 MT), the Netherlands (85,300 MT), and Pakistan (68,600 MT).    Optional Origin Sales:  For 2020/2021, the current outstanding balance of 126,000 MT, all China. 
  Exports for Own Account:  For 2020/2021, the current exports for own account outstanding balance is 32,300 MT, all Canada.  Late Reporting:  For 2020/2021, exports totaling 137,500 MT were reported late.  The destination was to China. 
  
• Soybean Cake and Meal: 
  Net sales of 331,400 MT for 2020/2021
  primarily for the Philippines (138,800 MT, including decreases of 200 MT), Italy (45,000 MT), Mexico (35,400 MT, including decreases of 6,100 MT), Peru (30,000 MT), and Canada (29,800 MT, including decreases of 400 MT), were offset by reductions primarily
  for Japan (29,600 MT).  Exports
  of 229,300 MT were primarily to the Philippines (93,600 MT), Colombia (44,100 MT), Canada (28,500 MT), Venezuela (23,000 MT), and Mexico (21,900 MT). 
  
• Soybean Oil: 
  Net sales of 6,800 MT for 2020/2021
  were primarily for Mexico (4,400 MT), Canada (1,200 MT), Venezuela (500 MT), Guatemala (500 MT), and the Dominican Republic (200 MT).  Exports
  of 22,900 MT were primarily to South Korea (13,400 MT), the Dominican Republic (3,900 MT), Guatemala (3,800 MT), Mexico (1,000 MT), and Canada (700 MT).
  
• Cotton: 
  Net sales of 115,600 RB for 2020/2021 were down 60 percent from the previous week and 42 percent from the prior 4-week average.  Increases primarily for China (47,300 RB, including decreases of 38,300 RB), Pakistan (25,200 RB), Turkey (22,500 RB, including
  decreases of 22,100 RB), South Korea (16,600 RB), and Guatemala (15,900 RB, including 400 RB switched from El Salvador), were offset by reductions primarily for Bangladesh (44,100 RB) and Mexico (10,100 RB).  For 2021/2022, net sales of 55,700 RB were primarily
  for Guatemala (26,000 RB), El Salvador (14,100 RB), and China (8,800 RB). Exports of 270,000 RB were up 18 percent from the previous week and 43 percent from the prior 4-week average.  Exports were primarily to China (127,400 RB), Vietnam (41,700 RB), Pakistan
  (27,800 RB), Bangladesh (20,200 RB), and Mexico (17,800 RB).  Net sales of Pima totaling 16,800 RB were down 49 percent from the previous week and 34 percent from the prior 4-week average.  Increases primarily for Pakistan (5,700 RB), India (5,200 RB, including
  decreases of 400 RB), China (2,400 RB, including decreases of 2,200 RB), Peru (2,000 RB), and Turkey (900 RB, including 600 RB switched from Germany), were offset by reductions for Germany (600 RB).  Exports of 21,900 RB–a marketing-year high–were up 38
  percent from the previous week and 69 percent from the prior 4-week average.  The destinations were primarily to India (7,200 RB), China (7,000 RB), Pakistan (3,000 RB), Vietnam (2,200 RB), and Thailand (500 RB). 
   Exports for Own Account:  For 2020/2021, new exports for own account totaling 3,600 RB were to China.  Exports for own account totaling 5,500 RB to China were applied to new or outstanding sales.  Decreases were reported for Indonesia (3,600 RB).  The
  current exports for own account outstanding balance of 7,200 RB is for China (5,900 RB), Bangladesh (1,000 RB), and Indonesia (300 RB).

·        
Hides and Skins: 
Net sales of 401,800 pieces for 2020 were down 4 percent from the previous week, but up 3 percent from the prior 4-week average.  Increases primarily for China (285,700 whole cattle hides, including decreases of 14,900 pieces), South Korea (49,400 whole cattle
hides, including decreases of 2,600 pieces), Mexico (33,400 whole cattle hides, including decreases of 600 pieces), Brazil (20,100 whole cattle hides, including decreases of 100 pieces), and Thailand (9,400 whole cattle hides, including decreases of 100 pieces),
were offset by reductions for Indonesia (400 pieces), Vietnam (200 pieces), and Japan (200 pieces).  For 2021, total net sales of 7,200 pieces were for China.  Exports of 374,900 pieces reported for 2020 were down 18 percent from the previous week and 15 percent
from the prior 4-week average.  Whole cattle hides exports were primarily to China (304,400 pieces), South Korea (27,100 pieces), Mexico (15,800 pieces), Taiwan (6,100 pieces), and Indonesia (4,800 pieces).  In addition, exports of 5,200 calf skins were to
Italy.

·        
Net sales of 70,300 wet blues
for 2020 were up 18 percent from the previous week, but down 39 percent from the prior 4-week average.  Increases reported for China (56,900 unsplit, including decreases of 100 unsplit), Thailand (12,000 unsplit, including decreases of 100 unsplit), Mexico
(8,000 grain splits), Brazil (1,800 grain splits, including decreases of 300 grain splits), and South Korea (800 unsplit), were offset by reductions primarily for Vietnam (7,200 grain splits and 1,700 unsplit).  For 2021, total net sales of 15,200 wet blues
were reported for Vietnam (8,000 unsplit and 7,200 grain splits).  Exports of 200,300 wet blues for 2020 were up 8 percent from the previous week and 28
percent
from the prior 4-week average.  The destinations were primarily to Italy (56,400 unsplit and 9,800 grain splits), China (61,300 unsplit), Vietnam (53,100 unsplit), Thailand (5,800 unsplit), and Taiwan (3,700 unsplit and 1,800 grain splits).  Net sales of 264,900
splits resulting in increases for Vietnam (270,900 pounds, including decreases of 70,200 pounds), were offset by reductions for China (6,000 pounds).  For 2021, net sales of 93,600 splits resulting in increases for China (143,300 pounds), were offset by reductions
for Vietnam (49,800 pounds).  Exports of 826,600 pounds were primarily to Vietnam (782,900 pounds).

·        
Beef: 
Net
sales of 20,400 MT reported for 2020 were up 8 percent from the previous week and 9 percent from the prior 4-week average.  Increases primarily for Japan (4,700 MT, including decreases of 400 MT), South Korea (4,600 MT, including decreases of 700 MT), China
(3,600 MT, including decreases of 100 MT), Mexico (2,500 MT), and Taiwan (1,900 MT, including decreases of 100 MT), were offset by reductions for Colombia (100 MT).  For 2021, net sales of 4,500 MT were primarily for South Korea (4,000 MT), Japan (200 MT),
and Hong Kong (200 MT).  Exports of 21,400 MT–a marketing-year high–were up 26 percent from the previous week and from the prior 4-week average.  The destinations were primarily to South Korea (5,600 MT), Japan (5,000 MT), China (2,700 MT), Mexico (2,300
MT), and Hong Kong (1,800 MT).

·        
Pork: 
Net sales of 42,200
MT reported for 2020 were up 46 percent from the previous week and 18 percent from the prior 4-week average.  Increases were primarily for Mexico (14,700 MT, including decreases of 700 MT), China (10,300 MT, including decreases of 1,400 MT), South Korea (5,100
MT, including decreases of 100 MT), Japan (3,300 MT, including decreases of 100 MT), and Colombia (2,400 MT).  For 2021, net sales of 800 MT were primarily for Chile (400 MT), Australia (200 MT), and Japan (100 MT).  Exports of 37,700 MT were up 1 percent
from the previous week and 3 percent from the prior 4-week average.  The destinations were primarily to China (14,600 MT), Mexico (10,000 MT), Japan (4,500 MT), Canada (2,100 MT), and South Korea (1,600 MT).