FI Morning Grain Comments 11/18/20

PDF attached

 

Morning.

 

Looks
like another round of fund buying is lifting soybeans and corn higher.  The difference in the soybean complex is that soybean oil is leading soybean meal.  South American weather continues to underpin prices, along with strong US domestic demand.  Mato Grosso
and other areas across Brazil missed out on rain over the past day.  The long-term outlook calls for net drying across Argentina.  Look for analysts to make downgrades to the Argentina crops in coming weeks.  Offshore values are leading SBO 40 points higher
and meal $4.40 lower.  Palm oil futures were up 2 percent snapping a 3-day losing streak.  Cash palm was up $19/ton.  South Korea is in for 75,000 tons of soybeans.  US wheat is mostly higher, reversing its weakness see during Tuesday’s trade.  Traders will
be watching for results for a series of wheat and barley import tenders.  Results are awaited on Pakistan in for 400,000 tons of wheat, Thailand is in for feed wheat, Taiwan is in for US wheat, and Syria in for 150,000 tons of wheat. 

 

 

 

 

Weather
and Crop Progress

 

 

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

US
Housing Starts Oct: 1530K (est 1460K; prevR 1459K; prev 1415K)

US
Housing Starts (M/M) Oct: 4.9% (est 3.2%; prevR 6.3%; prev 1.9%)

US
Building Permits Oct: 1545K (est 1567K; prevR 1545K; prevR 1545K; prev 1553K)

US
Building Permits (M/M) Oct: 0.0% (est 1.4%; prevR 4.7%; prev 5.2%)

Canadian
CPI NSA (M/M) Oct: 0.4% (est 0.2%; prev -0.1%)

Canadian
CPI (Y/Y) Oct: 0.7% (est 0.4%; prev 0.5%)

Canadian
CPI Core Median (Y/Y) Oct: 1.9% (est 1.9%; prev 1.9%)

Canadian
CPI Core Common (Y/Y) Oct: 1.6% (est 1.5%; prev 1.5%)

Canadian
CPI Core Trim (Y/Y) Oct: 1.8% (est 1.8%; prev 1.8%)

 

 

Corn.

• Corn
  futures are higher following strength in soybeans and dry weather across Argentina.  
  
• CBOT
  corn open interest was up 25,747 contracts on Tuesday.  December was down 10,001 contracts while many other months OI increased. 
  

• WTI
  was down $0.43 and USD slightly higher at the time this was written. 
• SovEcon:
  Ukraine corn crop revised 1.8MMT higher to 31.2 million tons.  USDA is at 28.5MMT. 
  
• A
  Bloomberg survey sees US cattle on feed placements down 9.7 percent from a year ago. 
  
• A
  Bloomberg survey calls for weekly ethanol production to end up unchanged at 977,000 barrels per day from last week and stocks to increase 20.496 million from 20.159 million previous week. 
  

 

Corn
Export Developments

• Awaiting
  results: Iranian state-owned SLAL seeks up to 60,000 tons of animal feed barley and 60,000 tons of soymeal for shipment in December 2020 and in January 2021.

 

 

Soybean
complex.  

• New
  contract highs in soybeans are seen today.  Soybeans are higher on follow through buying as traders expect USDA to again tighten its carryout in its December or January S&D update.  South American wheat is also a key factor.  Soybean oil is leading meal higher
  this morning after Malaysian palm snapped a 3-day losing streak by trading 2 percent higher.  Cash palm was up $19/ton.  European meal failed to follow the rally in US soybean meal that occurred yesterday.  However, China soybean meal futures were up 1 percent. 
  India vegetable oil prices are up anywhere from 6 to 17 percent from a month ago, according to Oil World.  We heard this morning China bought at least one cargo of new-crop Brazilian soybeans but were largely absent from the US market. 
  
• The
  long-term weather out for Argentina down not look promising.  For the month of December, Argentina could see below normal rainfall and above normal temperatures.  Brazil will see rain, but parts of the country could continue to see crop stress.  The near-term
  outlooks for SA were largely unchanged this morning.  Central and southern Brazil will see below normal rainfall through November 24. 
  

• CBOT
  soybean open interest was up 4,456 contracts on Tuesday.
• Deral
  on Parana, Brazil crop conditions: 70% of the crop was rated good as of Nov. 16 vs 75% a week earlier and 80% a year ago

• Offshore
  values this morning were leading CBOT soybean oil 40 higher and meal $4.40 lower.  
  
• Rotterdam
  soybean oil values were about 5 euros higher, rapeseed oil 5 higher, and Rotterdam meal mixed from this time previous session. 
  
• China
  cash crush margins were 85 cents on out our calculation (83 previous), compared to 85 last week and 172 year ago. 
  

• Malaysian
  palm futures:

 

Oilseeds
Export Developments

• South
  Korea’s Agro-Fisheries seeks 75,000 tons of non-GMO soybeans on November 24 for Jan-Jun 2022 arrival. 
  
• 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 CCC seeks 14,720 tons of soybean oil for Peru on November 19 for Feb 1-10 shipment. 
  

 

Wheat

• US
  wheat was mostly higher earlier as a few more global import tenders were posted with one focused on US wheat. However, Japan received no offers for wheat and barley, and Jordan passed on 120,000 tons of wheat.  KC futures were trading mixed near the electronic
  close. 
• CBOT
  Chicago wheat open interest was up 2,596 contracts on Tuesday.
• 80
  percent Ukraine’s barley exportable supplies have been used, or 3.4 million tons (exported during the July – October period. 
  
• Agritel
  sees French wheat exports to China at between 1.5 and 2.0 million tons.  1.2 million tons of wheat had already been shipped and another group is looking for about 1.0-1.1 million tons to be shipped after the New Year. 
  
• A
  trading firm estimated France’s soft wheat area at 5.1-5.2 million hectares, near the high end of historical range. 
  
• Russia
  will see showers today and Thursday across key wheat regions. 
• Paris
  (Matif) December wheat was 1.00 euro lower at 211.25 euros. 

 

Export
Developments.

• Jordan passed in 120,000 tons of milling
  wheat for LH Mar through FH May shipment. 

• In an SBS import
  tender, Japan received no offers for 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.

• Pakistan
  received offers for 400,000 tons of wheat for March arrival.  Lowest was $286.75/ton c&f. 
  
• Results
  awaited: Syria seeks 150,000 tons of wheat. 

• Taiwan seeks 82,220
  tons of US wheat on November 25 for Jan/Feb arrival.  It includes hard red winter, northern spring and white wheat. 
  
• Qatar seeks 100,000
  tons of feed barley on December 8, optional origin. 
• Thailand seeks about
  162,000 tons of feed wheat and 123,700 tons of feed barley for Jan-Mar shipment.
  
• Japan seeks 101,854 tons of food wheat this week from Canada
  and the US. 

• In an SBS import tender, on November 25, 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.

 

Rice/Other

·        
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. 

·        
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. 

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