FI Morning Grain Comments 11/17/20

PDF attached

 

Morning.

 

This
morning we are seeing a higher trade in most of the major agriculture markets led by soybeans amid strong US domestic demand as indicated by yesterday’s NOPA October crush report.  Offshore values are leading meal and soybean oil higher despite a slightly
lower close in Malaysian palm oil.  China soybean oil and palm oil were up 0.8% and 1.2%, respectively.  China corn and soybean futures are trading near multi year highs.  We heard China was not in the market for soybeans on Monday, but many traders are hopeful
buying will resume this week.  Japan announced they are in for their regular weekly food wheat import tender.  Jordan saw 4 participants for 120,000 tons of barley.  We remain bullish CBOT soybean oil over Indonesian and Malaysian production woes and rising
global vegetable oil cash prices.  We caution the bullish undertone of global feed demand with the center focused on hog recovery in China as bird flu outbreaks are starting to plague EU countries.  SA weather remains a great concern with Argentina missing
the blunt of the unorganized rains expected over the next week. 

 

 

 

 

 

 

Weather
and Crop Progress

 

 

 

 

                                                                 

 

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

Tuesday,
Nov. 17:

• New
  Zealand global dairy trade auction
• Global
  Grain Geneva conference, day 1
• FranceAgriMer
  monthly crops report
• U.S.,
  Mexico Sweeteners Outlook USDA

Wednesday,
Nov. 18:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• Online
  Asia-Pacific Agri-Food Innovation Summit, day 1
• Global
  Grain Geneva conference, day 2
• USDA
  Total Milk Production

Thursday,
Nov. 19:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• Asia-Pacific
  Agri-Food Innovation Summit, day 2
• Global
  Grain Geneva conference, day 3
• Vietnam
  farm ministry’s conference on African swine fever, Ho Chi Minh City
• BASF
  roundtable on sustainability in farming
• USDA
  Red Meat Production

Friday,
Nov. 20:

• 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
• Malaysia
  Nov. 1-20 palm oil export data
• Asia-Pacific
  Agri-Food Innovation Summit, day 3
• U.S.
  Cattle on Feed

Source:
Bloomberg and FI

 

 

 

 

 

CFTC
Commitment of Traders report

Trade
estimates for the traditional corn fund position were well off for the third week in a row, missing the net long position by 55,500 contracts (423k actual vs. 478k estimate).  The traditional funds also were more short than expected in soybeans by a large
51,800 contracts.  Traders also overestimated the soybean oil and meal positions for the week ending 11/10. 

 

 

 

 

 

 

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
299,382     -4,258    365,704     15,829   -626,638    -29,603

Soybeans          
187,945     13,704    203,261     -3,395   -391,845    -17,578

Soyoil             
69,898     -2,392    127,421      3,581   -217,130     -3,978

CBOT
wheat           4,826    -14,700    137,071     -2,150   -126,652     14,358

KCBT
wheat          23,044        -98     67,118         99    -91,009     -1,828

=================================================================================

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
280,835     -9,245    216,638     11,926   -594,179    -26,244

Soybeans          
221,094     10,137    127,983     -9,700   -387,680    -16,852

Soymeal            
83,798     -1,332     77,998     -5,656   -213,802      1,215

Soyoil             
97,111      8,059     97,419     -1,806   -234,739     -2,096

CBOT
wheat          32,633    -15,972     86,833     -2,044   -113,258     12,334

KCBT
wheat          47,329        471     41,428     -3,317    -87,630         23

MGEX
wheat           6,808       -360      2,944        295    -14,864         45

                
———- ———- ———- ———- ———- ———-

Total
wheat         86,770    -15,861    131,205     -5,066   -215,752     12,402

 

Live
cattle         27,987     11,920     68,958     -3,448   -108,871     -7,548

Feeder
cattle       -2,493      4,566      6,640         36     -2,263     -1,689

Lean
hogs           33,935     -1,779     50,781     -1,395    -86,876      4,631

Source:
CFTC, Reuters and FI

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
325,948         versus   275000-600000  range

Corn             
817,476         versus   650000-1000000                range

Soybeans   
2,239,956     versus   1400000-2500000             range

 

Macros

 

Corn.

• Corn
  futures are higher following a downward revision to Brazil’s corn crop and higher soybeans.  Traders are waiting for confirmation whether China bought US corn over the past two business days.  USDA reported 195,000 tons of corn was sold to Mexico. 
  
• USDA
  US corn export inspections as of November 12, 2020 were 817,476 tons, within a range of trade expectations, above 690,569 tons previous week and compares to 651,147 tons year ago. Major countries included China Main for 279,228 tons, Mexico for 222,334 tons,
  and Japan for 159,976 tons.
• CBOT
  corn open interest was down 11,371 contracts on Monday (futures closed higher).  December was down 28,920 contracts while many other months OI increased. 
  
• CZ/CH
  traded at -.10 late last week and it traded -6.75 overnight. 
• Soybean
  and Corn Advisory lowered their estimate of the Brazil corn crop by 2 million tons to 106 million tons.  The Argentina corn crop was left unchanged at 49.0 million tons. 
  

• APK-Inform:
  Ukraine corn production 31.8 million tons from 34.8 million previously.  Grain production 67.1MMT vs. 70.0 previous.  Corn exports are expected at 25.2 million tons from 28.5 million prior. 
  

• WTI
  was down $0.64 and USD 31 points lower at the time this was written. 
• France
  reported a case of H5N8 bird flu in Corsica. 
• Germany
  may cull another 70,000 chickens due to a H5N8 bird flu outbreak near Rostock. 
  

 

China’s
Corn Sector  University of Illinois at Urbana-Champaign

https://farmdocdaily.illinois.edu/2020/11/chinas-corn-sector.html?utm_source=farmdoc+daily+and+Farm+Policy+News+Updates&utm_campaign=5b67635ab0-FDD_RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_2caf2f9764-5b67635ab0-173649469

 

Corn
Export Developments

• Under
  the 24-hour reporting system, USDA announced private exporters sold 195,000 tons of corn to Mexico. 
  
• South
  Korea’s KFA bought 66,000 tons of corn at $242.70/ton c&f from the US or SA for arrival around June 10. 
  
• Iranian
  state-owned SLAL seeks up to 60,000 tons of animal feed barley and 60,000 tons of soymeal, on Wednesday, Nov. 18, for shipment in December 2020 and in January 2021.

 

 

 

Soybean
complex.  

• Unfavorable
  South American weather continues to underpin CBOT soybean futures along with strong US domestic demand.  Nearby soybeans hit a contract high.   China non-GMO soybeans futures hit a 12-year high. 
  
• Mato
  Grosso, northwest Rio Grande do Sul, western Parana and parts of Sao Paulo may will see irregular rain this week, adding stress to crops.  Argentina will see light rain this week and crop stress is expected to increase in Santa Fe, Entre Rios, northeastern
  Buenos Aires and La Pampa. 
• Brazil
  fob export soybean premiums were sharply higher basis the February and March positions from the late weekend. 
  
• We
  heard China was not in for soybean on Monday, but traders are hopeful they will be in later this week. 
  

• Soybean
  and Corn Advisory left their Brazil soybean crop estimate unchanged at 132 million tons. Note Conab last week raised their estimate of the Brazil soybean crop by 1.3 million tons to 134.9 million tons. 
  
• Soybean
  and Corn Advisory lowered their estimate of the Argentina soybean crop by 1.0 million tons to 50.0 million tons. 
  
• EU
  rapeseed prices are expected to

• APK-Inform:
  Ukraine sunflower oil exports are seen 12 percent lower at 6.2 million tons due to production of sunseed at 14.75 million tons. 
  

• Offshore
  values are leading meal and soybean oil higher despite a slightly lower close in Malaysian palm oil.  China soybean oil and palm oil were up 0.8% and 1.2%, respectively.  China corn and soybean futures are trading near multi year highs. 
  
• We
  remain bullish CBOT soybean oil over Indonesian and Malaysian production woes and rising global vegetable oil cash prices. 
  
• CBOT
  soybean open interest was up 798 contracts on Monday.

• Offshore
  values this morning were leading CBOT soybean oil 33 higher and meal $1.30 higher.  
  
• Rotterdam
  soybean oil values were about 20 euros higher, rapeseed oil 10 higher, and Rotterdam meal 1-9 euros higher from this time previous session. 
  
• China
  cash crush margins were 83 cents on out our calculation (90 previous), compared to 85 last week and 172 year ago. 
  

• Malaysia’s
  FGV Holdings Bhd warned that its fourth-quarter palm oil output would be hit by uncertainties over the weather and curbs to limit the spread of the coronavirus.
  
• Malaysian
  palm futures: One week low

• USDA
  US soybean export inspections as of November 12, 2020 were 2,239,956 tons, within a range of trade expectations, below 2,851,514 tons previous week and compares to 1,538,623 tons year ago. Major countries included China Main for 1,707,717 tons, Egypt for 169,943
  tons, and Mexico for 117,439 tons.

• The
  European Union reported soybean import licenses since July 1 at 5.293 million tons, above 5.189 million tons a year ago. European Union soybean meal import licenses are running at 6.698 million tons so far for 2020-21, below 7.258 million tons a year ago.
  EU palm oil import licenses are running at 2.305 million tons for 2020-21, above 2.150 million tons a year ago, or up 7 percent.
• Daily
  NOPA crush rate was reported at a record 5.98 million bushels per day, above the previous record of 5.85 million back in March 2020.  Soybean crush of 185.2 million bushels was up from 161.5 million for the month of September, 8.1 million above trade expectations,
  and well above 175.4 million a year earlier.  We heard as high as 180 for this report.  With soybean oil stocks coming in at 1.487 billion pounds, 39 million above trade expectations, domestic use was better than expected.  Biodiesel production is very good
  out west (IA & NE).  Soybean meal exports were an excellent 946,000 short tons, above 895,000 year earlier.  Very good crush and soybean domestic demand along with short supplies in soybean oil all added to the high soybean use.  Producers also must have been
  more aggressive in selling their soybeans during the month of October.  January soybeans were trading just below $10/bu around mid-September before rallying to $10.5625 by end of October. 
  

 

 

Oilseeds
Export Developments

• Egypt
  seeks at least 30,000 tons of soybean oil and 10,000 tons of sunflower oil on Thursday for January 10-30 arrival.
  
• Iranian
  state-owned SLAL seeks up to 60,000 tons of animal feed barley and 60,000 tons of soymeal, on Wednesday, Nov. 18, 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).
  

• The
  USDA CCC seeks 14,720 tons of soybean oil for Peru on November 19 for Feb 1-10 shipment. 
  

 

Wheat

• Wheat
  this
  morning was higher in Chicago on fund buying, KC lower on lack of US export business, and MN mixed.  
  
• FranceAgriMer
  increased its forecast of French soft wheat exports outside the European Union to 6.85 million tons from 6.7 million tons last month, 49% below 13.46 million tons during 2019-20.
• CBOT
  Chicago wheat open interest was down 2,292 contracts on Monday.
• Paris
  (Matif) December wheat was 0.50 euro lower at 209.75 euros. 

• USDA US all-wheat export inspections as of November 12, 2020 were 325,948 tons, within a range of
  trade expectations, above 304,239 tons previous week and compares to 463,049 tons year ago. Major countries included Philippines for 78,921 tons, Japan for 57,177 tons, and China T for 51,968 tons.
  

• The European Union granted export licenses for 368,000 tons of soft wheat exports, bringing cumulative
  2020-21 soft wheat export commitments to 8.503 MMT, well down from 10.951 million tons committed at this time last year, a 22 percent decrease.  Imports are up 9 percent from year ago at 1.040 million tons.
  

 

Export
Developments.

• Japan seeks 101,854 tons of food wheat this week from Canada and the US. 
  
• Jordan bought 60,000 tons of feed barley for Feb/Mar shipment
  at $239.99/ton c&f. 

• Syria
  seeks 150,000 tons of wheat on November 18. 
• Pakistan
  seeks 400,000 tons of wheat on November 18 for March arrival. 

• 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.

• Jordan seeks 120,000 tons of milling wheat on November 18
  for LH Mar through FH May shipment. shipment. 

 

Rice/Other

·        
Bangladesh seeks 50,000 tons of rice on November 26, valid until December 10, for shipment within 40 days of contract signing.  This is the first import tender in three years. 

·        
Turkey seeks 50,000 tons of rice on November 23 for Dec-early Jan shipment.

·        
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.