FI Morning Grain Comments 11/20/20

PDF attached

 

 

Morning.

 

January
soybeans climbed to a new high of 11.9675 this morning on a weather forecast calling for net drying to increase for Brazil and past dry weather for Argentina.  The rain prospects for Argentina will increase next week followed by southern Brazil late next week. 
Soybean meal is up sharply on higher EU oilmeal premiums and tight global supplies.  Soybean oil is higher despite a 54 lower trade in palm futures and cash palm fell $12.00/ton.  Malaysian palm futures: Down 3 percent for the week. China will open its Dalian
palm futures to foreign investors on December 22.  Offshore values this morning were leading CBOT soybean oil 1 higher (59 higher for the week to date) and meal $5.10 higher ($1.20 lower for the week).   Other than some import business overnight, news in the
corn market is light.  Wheat is mostly higher led by the nearby contracts.  There was talk Russia is now mulling over a subsidy for domestic end user such as millers rather than slapping on an export tax next year. Russian wheat exports so far this season
are 17 percent above the same period last year.  Japan
bought food wheat.  South Korea bought a combined 268,000 tons of corn. 
Thailand bought 60,000 tons of US wheat. 

 

 

 

Weather

 

 

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

            Recent
rain in interior southern Brazil was helpful in easing long term dryness and helping the region cope with the coming week to eight or nine days of dry weather. Dryness remains a concern from southern Paraguay into Rio Grande do Sul and in parts of Mato Grosso,
Bolivia and northwestern Mato Grosso do Sul. Rain late next week and into the following weekend in Rio Grande do Sul and southern Paraguay will be extremely important in easing dryness and crop stress.

            Concern
over dryness in Argentina will continue with the next best chance for rain coming early to mid-week next week. That rain will provide some temporary relief to recent drying and further support planting and germination, but more rain will be needed.

            U.S.
late season harvest weather will be mostly good, but there will be some disruption to fieldwork during the weekend and early to middle part of next week. Harvesting in India should be advancing normally, but recent rain and snow delayed late season fieldwork
in northern China. Winter crops in both China and India are suspected of being in good shape.

           
Australia’s canola harvest should be nearly complete and the establishment of winter rapeseed in Europe and Ukraine should be fair to good. Crops are dormant or semi-dormant in the east.

            South
Africa planting will advance favorably around periods of rainfall that will support good germination and emergence. Most of Indonesia and Malaysia rainfall recently was good for improving soil moisture after short term drying last week.

            Overall,
weather today will provide a mixed influence on market mentality.

 

MARKET
WEATHER MENTALITY FOR WHEAT

            U.S.
winter crops are establishing well in the Midwest and in parts of the central Plains. Rain coming up this weekend and next week will be extremely important to parts of the southwestern and west-central high Plains where some crop improvement is expected.

            A
snowstorm in a small part of Russia’s Southern region earlier this week has provided some needed moisture for improved crop establishment in the spring of 2021. Rain and snow may also occur in the lower Volga River Basin and Kazakhstan this weekend into next
week. Many other areas in the western CIS will also experience good early spring weather conditions, but snow cover will be needed this winter to adequately protect crops from possible winterkill.

Recent
bitter cold temperatures in southern Russia and Kazakhstan raised a little concern over winter crop conditions. However, the coldest areas had snow on the ground. Nevertheless, extreme temperatures near zero Fahrenheit were noted in several minor wheat production
areas that were not snow covered.

            Rain
in eastern China recently and that expected over the next ten days will ensure good winter grain establishment in most areas, especially dryland production areas in the north.  East-central China may become a little too wet next week.

           
India’s small grains are establishing well.

            Wheat
conditions in Argentina vary greatly, but the crop has likely performed better following last weekend’s rain and next week’s rain will also prove to be beneficial.

            Brazil
harvest conditions remain good in Rio Grande do Sul with rain limited into the end of next week.

            South
Africa harvesting has been advancing well around recent precipitation.

            North
Africa needs more moisture to induce better planting and emergence conditions and some of that need is coming soon.

        
   Europe and western CIS winter crops are mostly in favorable condition and winter dormancy has begun in some eastern areas.

            Overall,
weather today will likely provide a mixed influence on market mentality with a bearish bias.

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

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

Monday,
Nov. 23:

• USDA
  weekly corn, soybean, wheat export inspections, 11am
• China
  customs publishes trade data on corn, wheat, sugar, cotton imports
• U.S.
  monthly cold storage stocks of beef, pork, poultry, 3pm
• U.S.
  winter wheat conditions; harvest for soybeans, corn, cotton, 4pm
• Ivory
  Coast cocoa arrivals
• Monthly
  MARS bulletin on crop conditions in Europe
• EU
  weekly grain, oilseed import and export data
• EARNINGS:
  Sime Darby Plantation
• HOLIDAY:
  Argentina, Japan

Tuesday,
Nov. 24:

• U.S.
  chicken slaughter in October
• World
  palm oil virtual exhibition and conference, day 1
• Itau
  webinar on Brazilian agribusiness outlook
• International
  Sugar Organization seminar
• Brazil
  Unica cane crush, sugar production (tentative)

Wednesday,
Nov. 25:

• EIA
  U.S. weekly ethanol inventories, production
• World
  palm oil virtual exhibition and conference, day 2
• China
  Oct. trade data, including country breakdowns for soybeans and pork
• Malaysia
  Nov. 1-25 palm oil export data
• EARNINGS:
  IJM Plantations

Thursday,
Nov. 26:

• World
  palm oil virtual exhibition and conference, day 3
• Brazil
  grain exporters’ group meeting
• International
  Grains Council monthly supply and demand report
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  U.S. (Thanksgiving)

Friday,
Nov. 27:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• ICE
  Commitments of Traders report, 1:30pm ET (6:30pm London)
• NOTE:
  CFTC Commitments of Traders report, usually released on Fridays, will be issued on Monday, Nov. 30, due to Thanksgiving holiday
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

 

Macros

Canadian
Retail Sales Ex-Auto (M/M) Sep: 1.0% (est 0.0%; prev 0.5%)

Canadian
Retail Sales (M/M) Sep: 1.1% (est 0.2%; prev 0.4%)

 

 

Corn.

• December
  corn futures are higher following soybeans and ongoing buying by South Korea.
  
• Some
  traders are noting the increase in CBOT futures are related to money flow.  South American weather will again be in focus next week as Argentina is expected to see rain. 
  
• We
  could see USDA taking SA soybean and corn production down a decent amount in what used to be an uneventful December S&D update

• CBOT
  corn open interest was up 412 contracts.
• Ukraine’s
  grain harvest is 95 percent complete.  24.5 million tons of corn was collected using government data. 
  

 

Corn
Export Developments

• USDA
  reported 24-hour sales of:
• Export
  sales of 158,270 tons of corn for delivery to Mexico during the 2020/2021 marketing year
• Export
  sales of 131,000 tons of corn for delivery to unknown destinations during the 2020/2021 marketing year. 
  
• South
  Korea’s NOFI bought 200,000 tons of corn, optional origin. 
• 66,000
  tons for arrival around April 30 at $243.20 a ton c&f
• 68,000
  tons for arrival around May 15 at $241.99 a ton c&f
• 66,000
  tons for arrival around May 25 at $241.99 a ton c&f
• South
  Korea’s FLC bought 68,000 tons of corn, optional origin, at $241.99/ton c&f for arrival between May 20 and May 30. 
  

 

 

 

Soybean
complex.  

• January
  soybeans climbed to a new high of 11.9675 this morning on a weather forecast calling for net drying to increase for Brazil and past dry weather for Argentina.  Rain prospects for Argentina will increase next week followed by southern Brazil late next week. 
  Soybean meal is up sharply on higher EU oilmeal premiums and tight global supplies.  Soybean oil is higher despite a 54 lower trade in palm futures and cash palm fell $12.00/ton. 
  
• CBOT
  soybean open interest was up 4,732 contracts.
• We
  heard at least one Brazilian soybean cargo traded to a Chinese crusher for March shipment. PNW premiums were a little weaker but failed to attract state run buying.  China needs only about 20 more US cargoes and they are done as they will switch to Brazil. 
  We won’t rule out the occasional 1-2 cargoes here and there during FH 2021 from the US, but don’t expect much unless logistical problems arise in South America. 
  
• South
  American soybean premiums are weaker this morning due to slow Chinese buying and higher USD. 
  
• China
  will open its Dalian palm futures market to foreign investors on December 22. 
  
• Ukraine’s
  economy ministry projected the 2020 sunflower crop at 13 million tons, down from 15.3 million in 2019. 
  

• Offshore
  values this morning were leading CBOT soybean oil 1 higher (59 higher for the week to date) and meal $5.10 higher ($1.20 lower for the week).  
  
• Rotterdam
  soybean oil values were about 12 euros higher, rapeseed oil 12 higher, and Rotterdam meal 3-7 euros higher from this time previous session. 
  
• China
  cash crush margins were 89 cents on out our calculation (95 previous), compared to 85 last week and 172 year ago. 
  

• ITS
  reported Malaysian palm 1-20 November exports at 897,986 tons, down 16.6 percent from same period month ago.  AmSpec reported a 16.25 percent decline to 908,443 tons. 
  
• Malaysian
  palm futures: Down 3 percent for the week.

 

Oilseeds
Export Developments

• South
  Korea’s Agro-Fisheries seeks 75,000 tons of non-GMO soybeans on November 24 for Jan-Jun 2022 arrival. 
  

 

Wheat

• Wheat
  is mostly higher led by the nearby contracts.  There was talk Russia is now mulling over a subsidy for domestic end user such as millers rather than slapping on an export tax next year. Russian wheat exports so far this season are 17 percent above the same
  period last year. 
• Chicago
  wheat OI was up 2,370 contracts. 
• FranceAgriMer
  reported 95% of French winter barley was in a good or excellent state during the week ending Nov. 16. 
  
• Paris
  (Matif) December wheat was 0.50 euro higher at 211.00 euros. 

• Australian
  hard wheat with 14% protein was quoted this week in Vietnam at $290 a ton. (Reuters)

 

Export
Developments.

• Japan
  bought 101,854 tons of food wheat this week from Canada and the US. 

• Thailand
  this week bought 60,000 tons of US wheat for April shipment.  They paid around $265-$270 a ton c&f for white wheat and $290-$295 a ton for 14.5% spring 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. 
  
• Jordan
  seeks 120,000 tons of milling wheat on Nov 25 for March-May shipment, depending on origin. 
  

• 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.

• Jordan
  seeks 120,000 tons of feed barley on Dec 1. 
• Qatar
  seeks 100,000 tons of feed barley on December 8, optional origin. 

 

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.