FI Morning Grain Comments 11/10/20

PDF attached

 

Morning.

 

 

Big
data day with China, MPOB palm, Brazil Conab and USDA updates.  Outside markets are slightly supportive for the ag markets.  Soybeans are near a 4-year high.  Corn and Chicago wheat are higher while KC and MN mixed to lower on improving winter wheat conditions. 
China cash crush margins were 74 cents on out our calculation (101 previous), compared to 115 last week and 162 year ago. 
In
its CASDE update, China said the new-crop corn production was not significantly affected by typhoons and harvest was nearly complete.  China left their 2020 corn production unchanged at 264.71 million tons, 1.5 percent above 2019.  South Korea’s Korea Corn
Processing Industry Association (KOCOPIA) bought about 60,000 tons of corn for arrival in South Korea in February 2021.  China in its monthly S&D update left their 2020 soybean production and imports unchanged at 18.82 million tons and 95.10 MMT, respectively,
up 0.72 and 4.52 MMT from the previous year.  Yesterday
Argentina’s grain receivers union (Urgara), announced a strike over salary disputes, disrupting grain/oilseed loadings.
Offshore
values this morning were leading CBOT soybean oil 25 lower and meal $3.60 lower.  MPOB reported Malaysia’s palm oil inventories in October hit lowest since June 2017, contracting 8.6% from the month before to 1.57 million tons, but above trade expectations
looking for 1.56 million tons.  October crude palm oil production fell 7.8% from September to 1.72 million tons.  Palm oil exports rose 3.8% on month to 1.67 million tons.  AmSpec reported November 1-10 palm oil shipments down 17 percent from the previous
month to 443,895 tons while ITS reported a 19 percent decrease to 428,445 tons.  Malaysian palm futures are trading near an 8-year high. They were up 29MYR and cash up $12.50/ton.  Wheat export developments slowed. Turkey seeks 550,000 tons of wheat on November
11 for Nov 24 and Dec 18 shipment.  Conab raised their estimate for 2020-21 soybean production by 1.3 million tons from the previous month to 135 million tons (133.8 trade estimate) while lowering corn by 0.3 million to 104.9 million tons (111.4 million trade
estimate). 

 

 

Weather
and Crop Progress

 

 

 

 

Source: 
World Weather Inc. 

 

Bloomberg
Ag Calendar

Tuesday,
Nov. 10:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, noon
• China’s
  agriculture ministry (CASDE) releases monthly report on supply, demand
• Malaysian
  Palm Oil Council webinar on China’s post-pandemic palm oil demand
• Malaysian
  Palm Oil Board releases data on end-October stockpiles, exports, production
• Conab’s
  data on area, output and yield of soybeans and corn in Brazil
• Malaysia
  Nov. 1-10 palm oil export data from AmSpec, SGS

Wednesday,
Nov. 11:

• EARNINGS:
  JBS, Barry Callebaut
• HOLIDAY:
  U.S. (Veterans Day, federal govt closed, CME trading unaffected), France, Canada

Thursday,
Nov. 12:

• Port
  of Rouen data on French grain exports
• Vietnam
  customs data on coffee, rice and rubber exports in October
• EIA
  U.S. weekly ethanol inventories, production
• EARNINGS:
  BayWa, Marfrig

Friday,
Nov. 13:

• ICE
  Futures Europe weekly commitments of traders report, 1:30pm (6:30pm London)
  
• NOTE:
  CFTC Commitments of Traders report, usually released on Fridays, is scheduled for Monday, Nov. 16, due to U.S. federal holiday
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• FranceAgriMer
  weekly update on crop conditions
• New
  Zealand Food Prices

Saturday,
Nov. 14:

• China
  Animal Agriculture Association summit on hog recovery, ASF vaccine progress

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
304,239         versus   250000-500000  range

Corn             
690,079         versus   650000-1000000                range

Soybeans   
2,496,308     versus   1950000-2250000             range

 

Macros

Goldman
Sachs Sees Brent Prices To Average $47/Bbl In Q1 2021 (Down From $51/Bbl Previously)

 

Corn.

• US
  CBOT corn futures are higher pre-USDA report on fund buying and positioning. 
  
• The
  trade will be looking for a US crop production estimate of 14,682 with a 177.9 yield and carryout stocks of 2048 in US, and 296.4 world stocks for corn.  
  
• In
  its CASDE update, China said the new-crop corn production was not significantly affected by typhoons and harvest was nearly complete.  China left their 2020 corn production unchanged at 264.71 million tons, 1.5 percent above 2019. 
  
• China’s
  October consumer inflation dropped to a 11 year low in part to falling pork prices. Food inflation was 2% and CPI was down slightly.
  
• Conab
  lowered their Brazil corn estimate for 2020-21 by 0.3 million to 104.9 million tons from the previous month.  Brazil estimated the 2020-21 total grain crop at 268.94 million tons from 268.67 million in October, and up from 257.06 million tons in 2019-20. 
  
• US
  corn harvesting progress was reported at 91 percent, up 9 points from the previous week and compares to 62 percent year ago and 80 percent average.  Traders were looking for 91 percent. 
  
• Today
  is day 3 of the GS roll.
• CBOT
  corn open interest was down 7,620 contracts on Monday. 
• WTI
  was up $0.54 and USD 7 points higher at the time this was written. 

·        
German confirmed a H5N8 bird flu case in the northern part of the country. 

·        
USDA US corn export inspections as of November 05, 2020 were 690,079 tons, within a range of trade expectations, below 740,612 tons previous week and compares to 581,856 tons year ago. Major countries
included China Main for 202,971 tons, Mexico for 154,640 tons, and Japan for 80,930 tons.

·        
German confirmed a H5N8 bird flu case in the northern part of the country. 

 

CME
Pork Cut Out futures began trading this week

https://www.cmegroup.com/trading/agricultural/livestock/cme-pork-cutout-futures-and-options.html?gclsrc=aw.ds&&gclid=EAIaIQobChMIusm4quv17AIVTdbACh12RQohEAAYASAAEgIf-_D_BwE&gclsrc=aw.ds#contract-specifications

 

Corn
Export Developments

• Under
  the 24-hour announcement system, US exporters sold 130,000 tons of corn to South Korea for 2020-21 delivery. 
  
• South
  Korea’s Korea Corn Processing Industry Association (KOCOPIA) bought about 60,000 tons of corn for arrival in South Korea in February 2021with two price options:
• If
  sourced from worldwide optional origins – $253.93 a ton c&f
• If
  sourced from the United States only – $261.50 a ton c&f.
• Iranian
  state-owned animal feed importer SLAL seeks up to 60,000 tons of animal feed corn, 60,000 tons of feed barley and 60,000 tons of soymeal, on Wednesday, Nov. 11, for shipment in December 2020 and in January 2021.

 

 

 

Soybean
complex.  

• The
  soybean complex is higher on strength in Malaysian palm oil and ongoing South American weather concerns. 
  
• US
  soybean production is estimated at 4246, with a yield of 51.6, carryout of 233 and 87.5 million tons in world stocks.
  
• China
  in its monthly S&D update left their 2020 soybean production and imports unchanged at 18.82 million tons and 95.10 MMT, respectively, up 0.72 and 4.52 MMT from the previous year. 
  

• Conab
  raised their estimate for 2020-21 soybean production by 1.3 million tons from the previous month to 135 million tons (133.8 trade estimate) while lowering corn by 0.3 million to 104.9 million tons (111.4 million trade estimate). 
  
• Yesterday
  Argentina’s grain receivers union (Urgara), announced a strike over salary disputes, disrupting grain/oilseed loadings.
  
• US
  soybean harvesting progress was reported at 92 percent, up 5 points from the previous week and compares to 82 percent year ago and 90 percent average.  Traders were looking for 94 percent. 
  

• CBOT
  soybean open interest was up 3,379 contracts on Monday. 

• Offshore
  values this morning were leading CBOT soybean oil 25 lower and meal $3.60 lower. 
  
• Rotterdam
  soybean oil values were about unchanged, rapeseed oil 12 euros higher, and Rotterdam meal mostly 2-4 euros higher from this time previous session. 
  
• China
  cash crush margins were 74 cents on out our calculation (101 previous), compared to 115 last week and 162 year ago. 
  

• MPOB
  reported Malaysia’s palm oil inventories in October hit lowest since June 2017, contracting 8.6% from the month before to 1.57 million tons, but above trade expectations looking for 1.56 million tons.  October crude palm oil production fell 7.8% from September
  to 1.72 million tons.  Palm oil exports rose 3.8% on month to 1.67 million tons. 
  

• AmSpec
  reported November 1-10 palm oil shipments down 17 percent from the previous month to 443,895 tons while ITS reported a 19 percent decrease to 428,445 tons. 
  
• Malaysian
  palm futures are trading near an 8-year high. 

• The
  European Union reported soybean import licenses since July 1 at 5.021 million tons, above 4.798 million tons a year ago. European Union soybean meal import licenses are running at 6.346 million tons so far for 2020-21, below 6.905 million tons a year ago.
  EU palm oil import licenses are running at 2.128 million tons for 2020-21, above 2.104 million tons a year ago, or up 1 percent.
• European
  Union rapeseed import licenses since July 1 were 2.335 million tons, down 23 percent from 3.030 million tons from the same period a year ago.

·        
USDA US soybean export inspections as of November 05, 2020 were 2,496,308 tons, above a range of trade expectations, above 2,389,742 tons previous week and compares to 1,348,193 tons year ago. Major
countries included China Main for 1,820,815 tons, Vietnam for 77,369 tons, and Thailand for 75,960 tons.

 

Oilseeds
Export Developments

• Results
  awaited:  Iranian state agency the Government Trading Corporation (GTC) seeks up to 60,000 tons of milling wheat, 30,000 tons of soyoil and 30,000 tons of sunflower oil, on Tuesday, Nov. 10, for shipment in December 2020 and in January 2021.
  

• Yesterday
  Egypt’s GASC bought 16,000 tons local vegetable oils for Dec 25-Jan 15 arrival
  
• 5,000
  tons of soyoil at 13,920 Egyptian pounds equivalent to $888.32
• 3,000
  tons of soyoil at 13,920 Egyptian pounds equivalent to $888.32
• 8,000
  tons of soyoil at 13,920 Egyptian pounds equivalent to $888.32
• The
  USDA seeks 180 tons of veg oil packaged in 4-liter cans on Nov 17 for use in the McGovern-Dole Food for Export program for shipment to Liberia. Shipment was scheduled for Dec 16-31 and Jan 1-15 (Jan 1-31 for plants at ports).
  

 

Wheat

• Wheat
  is higher in Chicago and mixed in the higher protein contracts on light positioning ahead of the USDA report and slowdown in global trade developments.
  

• US
  wheat stocks are expected to come in at 878 and world stocks at 319.7 million tons.
  

• US
  winter wheat planting progress was reported at 93 percent, up 4 points from the previous week and compares to 91 year ago and 91 average.  Traders were looking for 94 percent.  Winter wheat emerged was reported at 79 percent, up 8 points from the previous
  week. 

• US
  winter wheat conditions improved 2 points to 45 percent for the combined good and excellent categories and compares to 54 year ago and 54 average.  The trade was expecting conditions to improve 1 to 44 percent this afternoon. 
  

• Paris
  (Matif) December wheat was 0.75 euro higher at 210.00 euros. 

·        
USDA US all-wheat export inspections as of November 05, 2020 were 304,239 tons, within a range of trade expectations, below 313,331 tons previous week and compares to 539,920 tons year ago. Major
countries included Philippines for 121,100 tons, Japan for 59,524 tons, and Mexico for 48,700 tons.

• The
  European Union granted export licenses for 122,000 tons of soft wheat exports, bringing cumulative 2020-21 soft wheat export commitments to 7.843 MMT, well down from 10.303 million tons committed at this time last year, a 24 percent decrease.  Imports are
  up 10 percent from year ago at 1.008 million tons.

 

Export
Developments.

• Results
  awaited: Iranian state agency the Government Trading Corporation (GTC) seeks up to 60,000 tons of milling wheat, 30,000 tons of soyoil and 30,000 tons of sunflower oil, on Tuesday, Nov. 10, for shipment in December 2020 and in January 2021.
  

• Results
  awaited: 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. 
  
• Jordan
  seeks 120,000 tons of feed barley on November 17 for Feb/Mar shipment. 
• Jordan
  seeks 120,000 tons of milling wheat on November 18 for LH Mar through FH May shipment. shipment. 
  

 

Rice/Other

·        
China’s ministry raised its forecast for 2020-21 cotton consumption by 200,000 tons due to rising demand for textile on improving domestic economy and as some orders are diverted from other countries to China due to the coronavirus
pandemic abroad. (Reuters)

·        
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. 

·        
Syria seeks 25,000 tons of white rice on December 2.