FI Morning Grain Comments 11/11/20

PDF attached

 

Morning.

 

 

Another
session of higher prices on follow through bullish momentum from the USDA report, dry weather for Argentina and parts of Brazil, and higher outside markets.  Soybeans are at a 4-year high and corn at a 15-month high.  Energy prices are higher this morning
and the USD was up 38 points.  Palm futures were up 90 points to 3346, an eight-year high and cash increased $27.50/ton to $845.  China was up 1.1-1.6% in the soybean complex and cash crush improved 13 cents to 86 cents from Tuesday.  China bought a cargo
of Brazilian soybeans for August shipment.  Funds were big buyers in corn and soybeans yesterday and we will see if that momentum continues through day 4 and 5 of the GS roll.  An Argentina crushing plant had an accidental explosion yesterday in Saforcada
and operations were grounded yesterday for an investigation.  Rising corn prices pressured feeder cattle on Tuesday.  Louis-Dreyfus agreed to sell a 45% indirect stake in Louis Dreyfus Co. to Abu Dhabi sovereign wealth fund ADQ.   A Bloomberg survey calls
for weekly ethanol production to be up to 975 thousand barrels from 961 thousand from the previous week, and stocks to end up at 20.114 million barrels, up from 19.675 million. 

 

Eta
reached hurricane intensity 130 miles west southwest of Fort Myers, Florida.  The 7-day forecast turned more favorable for Southern Brazil, but Argentina is expected to see ongoing net drying through the end of the month.  Thunderstorms and heavy rain seen
over some parts of Indonesia’s Sumatra and Java on Wednesday. 

 

Turkey
started getting offers for 550,000 tons of wheat.  Japan is in for 80,000 tons of feed wheat and 100,000 tons of barley.  Japan is also in for 102,011 tons of food wheat.  Saudi Arabia will start allowing private importers to source barley.  Algeria is in
for wheat on Thursday. 

 

 

 

Weather
and Crop Progress

 

 

 

Source: 
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

 

Macros

OPEC
Sees 2020 World Oil Demand Falling By 9.75Mln BPD (prev 9.47Mln BPD Drop)

 

Corn.

• Another
  session of higher prices on follow through bullish momentum from the USDA report, dry weather for Argentina and parts of Brazil, and higher outside markets.  Soybeans are at a 4-year high and corn at a 15-month high.  Energy prices are higher this morning.
• Yesterday
  funds bought an estimated net 57,000 corn contracts. 
• Today
  is day 4 of the GS roll.
• CBOT
  corn open interest was up 33,672 contracts on Tuesday. 
• WTI
  was up $0.83 and USD 34 points higher at the time this was written.  Brent crude topped $45/barrel overnight, first time in 10 weeks. 
  
• Ukraine
  corn prices are up $10/ton over the past few days to $235-$272/ton, according to APK-Inform. 
  
• Rising
  corn futures prices pressured feeder cattle on Tuesday. 
• Anec
  sees Brazil corn exports during November reaching 4.8 million tons versus 4.15 tons previous. 
  

·        
Louis-Dreyfus agreed to sell a 45% indirect stake in Louis Dreyfus Co. to Abu Dhabi sovereign wealth fund ADQ.  

·        
A Bloomberg survey calls for weekly ethanol production to be up to 975 thousand barrels from 961 thousand from the previous week, and stocks to end up at 20.114 million barrels, up from 19.675 million. 

 

Corn
Export Developments

• Results
  awaited: 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 follow through buying after USDA lowered their US carryout to 190 million bushels. Palm futures were up 90 points to 3346, an eight-year high and cash increased $27.50/ton to $845.  China was up 1.1-1.6% in the soybean complex
  and cash crush improved 13 cents to 86 cents from Tuesday.  China bought a cargo of Brazilian soybeans for August shipment.  Funds were big buyers in corn and soybeans yesterday and we will see if that momentum continues through day 4 and 5 of the GS roll. 
  
• We
  eventually see January soybean futures going to $12.00. 

• Eta
  reached hurricane intensity 130 miles west southwest of Fort Myers, Florida.  The 7-day forecast turned more favorable for Southern Brazil, but Argentina is expected to see ongoing net drying through the end of the month.  Thunderstorms and heavy rain seen
  over some parts of Indonesia’s Sumatra and Java on Wednesday. 
• Brail
  soybean basis is starting to collapse with the rise in CBOT futures.  The real is weak and producers are not selling.  We are hearing consumer bids are lower on basis. 
  

• An
  Argentina crushing plant had an accidental explosion yesterday in Saforcada and operations were grounded yesterday for an investigation. 
  
• Argentina’s
  grain receivers union (Urgara) mentioned labor talks are not progressing well.  This is bullish for soybeans and soybean meal. 
  

• Yesterday
  funds bought an estimated net 33,000 soybean contracts. 
• CBOT
  soybean open interest was up 14,357 contracts on Tuesday. 
• We
  heard China bought at least one cargo of soybeans from Brazil for August 2021 shipment. 
  

• Anec
  sees Brazil soybean exports during November reaching 762,707 tons versus 688,120 tons previous. 
  

• Offshore
  values this morning were leading CBOT soybean oil 25 higher and meal $1.00 lower. 
  
• Rotterdam
  soybean oil values were about 23 euros higher, rapeseed oil 13 euros higher, and Rotterdam meal mostly 10-20 euros higher from this time previous session. 
  
• China
  cash crush margins were 86 cents on out our calculation (74 previous), compared to 115 last week and 162 year ago. 
  

• Malaysian
  palm futures are traded at an 8-year high. 

 

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.
  

• 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
  was mixed to mostly higher as USDA provided a much more neutral S&D update yesterday contrary to the bullish US corn and soybean downward revisions to stocks. 
  
• Turkey
  bought around 550,000 tons of wheat and traders will be watching the Algerian tender on Thursday. 
  
• Saudi
  Arabia will start allowing private importers to source barley. 
• We
  see the March Chicago wheat / March corn spread tipping over in coming months due to large global supplies and tighter US corn stocks.  This spread could move to $1.45-$1.55 area in coming months. 
  

• Paris
  (Matif) December wheat was 0.50 euro higher at 212.50 euros. 

 

 

Export
Developments.

• Turkey
  bought around 550,000 tons of wheat for Nov 24 and Dec 18 shipment.  Lowest price reported was $269.90 a ton c&f.

• Japan
  is in for 102,011 tons of food wheat. 
• In
  an SBS import tender, Japan seeks 80,000 tons of feed wheat and 100,000 tons of feed barley to be loaded by Jan. 31, 2021 and arrive in Japan by Feb. 25, on Nov. 18.
• Algeria
  seeks 50,000 tons of wheat on November 12 for December and/or January shipment. 
  
• 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. 
  
• 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

·        
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.