FI Morning Grain Comments 11/25/20

PDF attached

 

Morning. 

 

US
holiday Thursday and there will be no night session and we have a hard open on Friday post USDA export sales report. Today we have a regular close (1:15 PM CT)

 

WTI
is higher and USD near unchanged. Corn and wheat were mixed early Wednesday. CBOT soybeans were mostly higher early Wednesday.  At least two more sources confirmed small Chinese crushers washed out a small amount of US soybean cargoes, according to Reuters.  
The slowdown in US demand has hit Gulf basis while export prices continue to largely track changes in the CBOT futures.  China imported 8.69 million tons of soybeans during October, up 41% from last year, and included 3.4 million tons from the US, up from
1.147 million tons a year ago and 1.17 million tons in September.  It also included 4.233 million tons from Brazil, up 11.6% from 3.793 million tons in the previous year and down from 7.25 million tons in September.  We heard one state owned China buyer bought
one soybean cargo out of the Gulf for January shipment, and another cargo traded out of the PNW for January shipment by a private crusher.  CBOT registrations were 1,658 for soybean oil (down 85 – 51 Gibson City and 34 Volga).  Offshore values this morning
were leading CBOT soybean oil 76 higher and meal $2.00 lower.  Malaysian palm futures and cash traded higher on Wednesday while China futures were mixed.  Taiwan and South Korea bought US milling wheat.  Japan bought a small amount of barley and passed on
wheat.  Thailand bought feed wheat and barley. The Ukraine Econ Ministry estimated the 2020 grain crop at 65 million tons from a record 75 million tons, from a previous 68 million tons. SovEcon pegged Russia’s 2020-21 wheat exports at 40.8 million tons, up
one million from previous and 100,000 tons below the 2017-18 record.  They raised its forecast for Russia’s wheat crop by 900,000 tons to 85.3 million tons.  A Bloomberg poll looks for weekly US ethanol production to be up 4,000 at 966,000 barrels (958-985
range) from the previous week and stocks up to 293,000 barrels to 20.496 million.

 

Refinitiv
Commodities Research: Brazil soybean crop 129 million tons. Compares to 133 MMT USDA (126 last year) and 135 MMT Conab. 

Refinitiv
Commodities Research: Paraguay soybean crop 10.1 million tons. Compares to 10.25 MMT USDA and 9.9MMT for 2019-20. 

Refinitiv
Commodities Research: Brazil corn crop 107 million tons. Compares to 110 MMT USDA and 104.9 MMT Conab. 

 

 

 

Weather

 

Beneficial
rain will still impact Argentina tonight into next Tuesday which will improve soil moisture and general conditions for summer crop emergence and establishment. In Brazil, the far south will be notably wet through next Tuesday with improvement of soil moisture
as well. Net drying will occur north of Santa Catarina, with Mato Grosso do Sul, northwestern Bahia, and western Sao Paulo among the driest parts of the nation and some crop stress will evolve as a result. An increase in at least some erratic shower and thunderstorm
activity is likely in week 2 of the outlook in these driest areas of Brazil which will be important.

 

World
Weather, Inc. is still expecting improved rainfall in eastern Australia during December. Our confidence is highest in the second week of the month, but if the model is increasing rainfall in the Dec. 4-8 period it may be correct, although tonight’s model run
was overdoing some of the rainfall. The trend for greater rainfall late in that first week and on into the second week of December makes good logical sense and we will be looking for that change. In the meantime, a heatwave is still expected late this week
into early next week

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

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

US
MBA Mortgage Applications Nov 20: 3.9% (prev -0.3%)

 

 

Corn.

• CBOT
  corn is lower on lack of bullish news despite a rise in WTO crude oil and slightly lower USD. 
  
• CBOT
  corn open interest fell 23,372 contracts to 1.715 million contracts. 
• China
  domestic corn prices in the southern areas are running at around $10.20/bu. 
  
• AgriCensus
  published an article regarding container demand shifting to China.  Several containers are being redirected to China to meet surging demand, leaving several key locations with potential shortages.  Shipping company Hapag Lloyd was noted, which have delivery/shipping
  points in the KC and Chicago areas.  This could have an impact on US DDGS exports as exporters depend on containers to ship the product to Asian destinations.  Agri noted 9 percent of US DDGS exports in 2019 were in containers.  With containers headed back
  empty, this is blow to US exporters hoping China would resume large purchases of DDGS as container freight rates may increase in coming months to Asian destinations. 
  
• Refinitiv
  Commodities Research: Brazil corn crop 107 million tons. Compares to 110 MMT USDA and 104.9 MMT Conab. 
  
• 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.  Refinitiv Commodities Research has a 15.0 MMT outlook. 
  
• FND
  delivery estimates in corn are expected to be zero. 
• A
  Bloomberg poll looks for weekly US ethanol production to be up 4,000 at 966,000 barrels (958-985 range) from the previous week and stocks up to 293,000 barrels to 20.496 million.
  

 

Corn
Export Developments

• Yesterday
  Turkey’s state grain board TMO bought about 350,000 tons of corn for the shipment position between Dec. 2-18, 2020.  Lowest price paid was $245.30/ton c&f. 
  

 

 

 

Soybean
complex.  

• CBOT
  soybeans were mostly higher early Wednesday.  At least two more sources confirmed small Chinese crushers washed out a small amount of US soybean cargoes, according to Reuters.   The slowdown in US demand has hit Gulf basis while export prices continue to largely
  track changes in the CBOT futures. 
• China
  imported 8.69 million tons of soybeans during October, up 41% from last year, and included 3.4 million tons from the US, up from 1.147 million tons a year ago and 1.17 million tons in September.  It also included 4.233 million tons from Brazil, up 11.6% from
  3.793 million tons in the previous year and down from 7.25 million tons in September. 
  
• We
  heard one state owned China buyer bought one soybean cargo out of the Gulf for January shipment, and another cargo traded out of the PNW for January shipment by a private crusher. 
  
• CBOT
  soybean open interest was up 5,476 contracts, meal down 1,665, and soybean oil down 8,221 contracts. 
  
• Refinitiv
  Commodities Research: Brazil soybean crop 129 million tons. Compares to 133 MMT USDA (126 last year) and 135 MMT Conab. 
  
• Refinitiv
  Commodities Research: Paraguay soybean crop 10.1 million tons. Compares to 10.25 MMT USDA and 9.9MMT for 2019-20. 
  
• Important
  rainfall will impact Argentina through next Monday.  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.
  
• Canadian
  Aug through Oct canola and soybean crushing of 2.55 and 0.435 million tons, respectively, are both running above year ago level. 
  
• CBOT
  registrations are 175 for soybeans, 196 for meal and 1,658 for soybean oil (down 85 – 51 Gibson City and 34 Volga).  We think meal deliveries will be zero and soybean oil 0-200. 
  

• Argentina
  is set to ship 60,000 tons of biodiesel to Europe in December.  There were no shipments in October or November. 
  
• Offshore
  values this morning were leading CBOT soybean oil 76 higher and meal $2.00 lower.  
  
• Rotterdam
  soybean oil values were about unchanged, rapeseed oil 5 higher, and Rotterdam meal 2-7 euros higher from this time previous session. 
  
• China
  cash crush margins were 80 cents on out our calculation (80 previous), compared to 89 last week and 166 year ago. 
  

• AmSpec
  reported November 1-25 palm oil exports at 1.146 million tons, down 18.9 percent from the previous period last month. 
  
• ITS
  reported November 1-25 palm oil exports at 1.137 million tons, down 18.9 percent from the previous period last month. 
  
• Malaysian
  palm:  higher trade on strength in energies

 

US
CIF soybean basis dropped 30 percent so far in November. 

 

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 in Chicago and KC on light profit taking while Minn prices are higher from an uptick in high protein wheat sales from the US and Canada. 
  

• CBOT
  Chicago SRW wheat contracts were down 2,141 contracts. 
• Chicago
  wheat registrations stand at 109.  FND deliveries could end up in the 0-50 range. 
  
• The
  Ukraine Econ Ministry estimated the 2020 grain crop at 65 million tons from a record 75 million tons, from a previous 68 million tons. The 2020 wheat and barley harvest was pegged at 25 and 8 million tons, respectively, while corn was 30 million tons. This
  compares to 2019 wheat of 28.3 million tons, 35.9 million tons of corn and 8.9 million tons of barley.  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.

• SovEcon:
  Russia’s 2020-21 wheat export projection was increased by 1.0 million tons to 40.8 million tons, 100,000 tons below the 2017-18 record.  They raised its forecast for Russia’s wheat crop by 900,000 tons to 85.3 million tons.
• Paris
  (Matif) March wheat was 0.50 euro lower at 211.25 euros. 

 

Export
Developments.

• The
  Taiwan Flour Millers’ Association bought 82,220 tons of US milling wheat in two consignments for shipment in January and February 2021.  The first consignment for shipment Jan. 17-31 involved 23,520 tons of U.S. dark northern spring wheat of 14.5% protein
  content bought at $283.11 a ton FOB U.S. Pacific Northwest coast.  It also included 10,950 tons of hard red winter wheat of 12.5% protein content bought at $282.56 a ton FOB and 4,860 tons of soft white wheat with 9% protein bought at $258.80 a ton FOB.  The
  second consignment for shipment Feb. 2-16 involved 25,060 tons of dark northern spring wheat of 14.5% protein content bought at $275.76 a ton FOB U.S. Pacific Northwest coast, 11,700 tons of hard red winter wheat of 12.5% protein content bought at $278.86
  a ton FOB and 6,130 tons of soft white wheat of 9% protein bought at $253.21 a ton FOB.
• South
  Korean flour mills bought around 80,000 tons of milling wheat sourced from the United States for shipment in 2021 between Feb. 16 and March 15 and also between March 1-31.
• Thailand’s
  TFMA bought just over 60,000 tons of optional-origin animal feed wheat and 79,000 tons of feed barley at around $282.50 a ton c&f for January 2021 shipment.  They also bought 79,000 tons of Australian origin feed barley at $235 to $236 a ton c&f.
• In
  its weekly SBS import tender, Japan bought 220 tons of feed barley for arrival in Japan by February 25.
• Results
  awaited:  Jordan seeks 120,000 tons of milling wheat on Nov 25 for March-May shipment, depending on origin. 
  
• 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. 
  
• 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.