FI Morning Grain Comments 11/24/20

PDF attached

 

Morning. 
There were no USDA 24-hour sales. 

 

Will
the bears have their Thanksgiving and Bulls for Christmas?  USD is under pressure this morning and WTI is higher. CBOT corn is lower on an improvement in Argentina’s weather outlook and widespread agriculture fund selling led by the soybean complex. December
corn futures traded higher, but gains were limited on heavy Brazilian corn shipments.  Argentina will receive scattered showers and thunderstorms through Thursday of this week.  Soybean and Corn Advisors estimated the Brazilian corn production at 106 million
tons, unchanged.  USDA is at 110 million metric tons. Argentine corn production was projected at 48 million tons, down 1 million from last week. USDA is at 50 million tons.  Corn spreads were active again with traders continuing to get out of the December
position.  Despite fresh buying by China over the weekend into Monday, talk of China washing out several cargoes of US soybeans and an improvement in Argentina’s weather outlook sent a bearish undertone to the CBOT soybean complex.  We heard at least three
cargoes soybeans were shifted from the US to Brazil as SA origin margins are better. US wheat is following soybeans lower.  Tunisia and Turkey bought wheat.  South Korea seeks US wheat.

 

 

 

Weather

 

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

            South
America weather is of great interest to the marketplace.  Rain in Argentina and southern Brazil this week and into next week will bolster soil moisture and bring another round of relief to key grain and oilseed production areas that have been suffering from
dryness for a while. Net drying in center south through northeastern Brazil will be of interest as well since many crop areas that had favorable soil moisture earlier this week will become a little too dry by this time next week adding stress to those areas
in sandier soil and to those regions that did not receive the greatest rain in this past week.

            Weather
in South Africa will be mostly good for crops. Australia needs rain in dryland summer crop areas, but net drying this week will be good for late season canola harvesting.

            India’s
weather will be mostly good except for the tropical cyclone that may threaten a few crops near the lower east coast.

            China
rapeseed areas may get a little too wet this week, but crop conditions should stay favorable. 

            Overall,
weather today will likely provide a mixed influence on market mentality with a bullish bias providing a solid floor of support beneath any trade volatility.

 

MARKET
WEATHER MENTALITY FOR WHEAT

            West-central
parts of U.S. hard red winter wheat region will have opportunity for some precipitation today and Wednesday. The moisture will not be a fix all, but it will provide some welcome moisture that can be used during the warmer days left in this autumn and/or in
the early spring.

            Wheat
establishment in the lower Midwest will continue to advance normally. Wheat in Russia and Ukraine will not be able to benefit much from precipitation this week, but it will be of use to crops early in the spring of 2021.

            China
wheat conditions are rated quite favorably with a great outlook for early 2021 spring development. India winter wheat development is also expected to occur favorably.

            South
Africa wheat harvesting is advancing well around brief periods of rain with little change likely. Argentina wheat will benefit from periodic rainfall during the coming ten days preventing any new decline in crop conditions.

            Australia
wheat harvesting is expected to advance favorably for another week.

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

 

Source:
World Weather Inc. and FI

 

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range                                    

Wheat         
358,077         versus   150000-400000

Corn             
832,637         versus   700000-1100000

Soybeans   
2,009,976     versus   1500000-2500000

 

Macros

 

Corn.

• USD
  is under pressure this morning and WTI is higher. 
• CBOT
  corn is lower on an improvement in Argentina’s weather outlook and widespread agriculture fund selling led by the soybean complex.  Note corn hit a 16-month high on a rolling basis. 
  
• Soybean
  and Corn Advisors estimated the Brazilian corn production at 106 million tons, unchanged.  USDA is at 110 million metric tons. Argentine corn production was projected at 48 million tons, down 1 million from last week. USDA is at 50 million tons.
• Corn
  spreads were active again with traders continuing to get out of the December position. 
  
• FND
  delivery estimates in corn are expected to be zero. 
• South
  Africa’s final 2020 (2019-20 crop year) corn estimate will be released November 26.  A Reuters poll calls for CEC to report corn production at 15.379 million tons (8.746 million white and 6.632 million yellow), down from the CEC’s October estimate of 15.420
  million tons, and well up from the weather problem year of 11.275 million tons during 2018-19. 
  
• USDA
  US corn export inspections as of November 19, 2020 were 832,637 tons, within a range of trade expectations, below 840,281 tons previous week and compares to 616,902 tons year ago. Major countries included Mexico for 294,535 tons, China Main for 200,860 tons,
  and Colombia for 140,216 tons.
• Yesterday
  we learning China imported 7.82 million tons of corn through October, above the TRQ cap of 7.2 million tons.
  

 

Corn
Export Developments

• Turkey’s
  state grain board TMO bought about 195,000 tons of corn for the shipment position between Dec. 2-18, 2020. 
  

 

 

Soybean
complex.  

• Despite
  fresh buying by China over the weekend into Monday, talk of China washing out several cargoes of US soybeans and an improvement in Argentina’s weather outlook sent a bearish undertone to the CBOT soybean complex.  We heard at least three cargoes soybeans were
  shifted from the US to Brazil as SA origin margins are better.   USDA export sales of soybeans for China are double than that of 2017 for this time of year.
  
• Soybean
  oil is sharply lower following weakness in palm prices.  December meal turned higher just before the electronic close on product spreading. 
  
• China
  cash crush margins are down sharply from Monday.  Malaysian palm futures declined 77 points and cash was $18.50 lower. 
  
• Important
  rainfall will impact Argentina through next Monday promoting improvement in topsoil moisture in eastern production areas and possibly some localized flooding in the northeast. (World Weather)   Temperatures will remain above normal. 
  
• South
  American Monsoonal rains during October and November have developed poorly.  Center-west Brazil into Sao Paulo and Parana will see net drying over the next nine to ten days. Rain should return to those locations during the first week of December.  Southern
  Parana into Santa Catarina and Rio Grande do Sul will see a mix of erratic rain and sunshine this week.  Minas Gerais into Goias will see rain scatter across both regions on a periodic basis this week.
  
• Southern
  Paraguay rains will fall in these southern crop areas later this week and into next week, but center west and center south crop areas may have to wait until December 1-7 for meaningful rain.
• Soybean
  and Corn Advisors estimated Brazilian soybean production at 132 million tons, unchanged, and compares to USDA at 133 million tons. Argentine soybean production was estimated at 49 million, down 1 million tons from last week and compares to USDA at 51 million
  tons.
• We
  did not hear of any China soybean purchases on Tuesday.   
• CBOT
  January deliveries are around the corner.  Registrations were 175 for soybeans, 196 for meal and 1,743 for soybean oil.  We think meal will be zero and soybean oil 0-200. 
  
• Indonesia
  2020 palm oil exports are seen at 36.1 million tons according to the Estate Crop Fund, and 36.49 million tons for 2021.
  
• Indonesia
  biodiesel production in the first nine months of the year stood at 6.47 million kiloliters and biodiesel domestic consumption in the January to September period was 6.33 million kiloliters.
  

• Offshore
  values this morning were leading CBOT soybean oil 51 lower and meal $5.30 lower.  
  
• Rotterdam
  soybean oil values were about 5 euros lower, rapeseed oil 3 lower, and Rotterdam meal 2-6 euros lower from this time previous session. 
  
• China
  cash crush margins were 80 cents on out our calculation (97 previous), compared to 89 last week and 166 year ago. 
  

• Malaysian
  palm:  2-week low on poor November to date palm exports.

• USDA
  US soybean export inspections as of November 19, 2020 were 2,009,976 tons, within a range of trade expectations, below 2,466,715 tons previous week and compares to 1,952,364 tons year ago. Major countries included China Main for 1,388,722 tons, Mexico for
  136,928 tons, and Indonesia for 101,182 tons.
• The
  European Union reported soybean import licenses since July 1 at 5.623 million tons, above 5.493 million tons a year ago. European Union soybean meal import licenses are running at 7.239 million tons so far for 2020-21, below 7.676 million tons a year ago.
  EU palm oil import licenses are running at 2.458 million tons for 2020-21, above 2.223 million tons a year ago, or up 11 percent.

 

Oilseeds
Export Developments

• Results
  awaited: South Korea’s Agro-Fisheries seeks 75,000 tons of non-GMO soybeans on November 24 for Jan-Jun 2022 arrival. 
  
• The
  CCC seeks 8,660 tons of packaged vegetable oils for various locations on December 1 for Jan-FH Feb shipment. 
  

 

Wheat

• US
  wheat futures are lower following soybeans despite a lower USD.  News is light.  A few global tender updates and the decline in US winter wheat conditions may limit losses in futures.   
  
• US
  winter wheat conditions declined 3 points in the good and excellent categories to 43 percent and compares to 52 a year ago and 54 average.  Traders were looking for US winter wheat conditions to improve one point. 
  

• Chicago
  wheat registrations stand at 109.  FND deliveries could end up in the 0-50 range. 
  
• Ukraine
  is nearly complete in planting 2021 winter grains.  Winter wheat plantings are expected to fall 9% to 6.1 million hectares from around 6.7 million hectares.  September weather conditions were the worst in 10 years.
• Ukraine
  used 66.5% of the 2020-21 wheat export quota, or 11.63 million tons.  Wheat available for export this season must not exceed 17.5 million tons.  Ukraine exported 20.5 million tons in 2019-20.
• USDA
  US all-wheat export inspections as of November 19, 2020 were 358,077 tons, within a range of trade expectations, above 334,400 tons previous week and compares to 435,094 tons year ago. Major countries included Mexico for 68,669 tons, China Main for 62,999
  tons, and Nigeria for 49,003 tons.
• The
  European Union granted export licenses for 329,000 tons of soft wheat exports, bringing cumulative 2020-21 soft wheat export commitments to 9.191 MMT, well down from 11.559 million tons committed at this time last year, a 20 percent decrease.  Imports are
  up 12 percent from year ago at 1.053 million tons.

• Paris
  (Matif) March wheat was 0.50 euro lower at 209.75 euros. 

 

Export
Developments.

• Tunisia
  bought 75,000 tons of durum wheat, 75,000 tons of barley and 92,000 tons of soft wheat for shipment between Dec. 20, 2020, and Jan. 25, 2021.  The soft wheat was purchased in four consignments at $276.83 a ton c&f, $276.97 a ton c&f and two consignments at
  $275.49 and $276.89 a ton c&f.  The durum was purchased in three 25,000 ton consignments at $366.49 a ton c&f, at $368.89 a ton c&f and at $370.29 a ton c&f.
• Turkey
  provisionally bought 155,000 tons barley at the lowest price of $226.40 a ton c&f. 
  
• South
  Korean flour mills seek about 80,600 tons of milling wheat to be sourced from the United States on Wed or Thur for shipment between Feb. 16 and March 15, 2021, and 30,600 tons for shipment between March 1-31, 2021. 
  
• Thailand
  seeks about 160,000 tons of animal feed wheat and about 80,000 tons of feed barley on Wednesday, Nov. 25 for shipment in January, February and March 2021. Barley shipment is between February and March 2021. 
  
• 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

·        
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. 

·        
Bangladesh seeks 50,000 tons of rice on December 2 for shipment within 40

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