FI Morning Grain Comments 12/03/20

Dec 3, 2020







PDF attached

 

Morning. 

 

Look
for traders to possibly fade corn and soybeans after no 24-hour sales were reported.  USDA export sales were near the lower end of expectations for the soybean complex and within expectations for corn and wheat.  Sorghum and pork sales were very good.  StatsCan
showed a lower than expected Canadian canola production estimate while the other main crops came in at or above expectations.  The weather forecast for southern Brazil is drier for next week.  A lower USD and bottom picking led by soybean oil is lifting the
CBOT complex higher.  Corn is following soybeans while US wheat is mostly lower on lack of US demand indications and a higher than expected Canadian production estimate.  Malaysian palm traded 16 higher and cash was up $4.50.  Offshore values this morning
were leading CBOT soybean oil and meal higher.   South Korea’s NOFI seeks 72,000 tons of soybean meal.  South Korea’s MFG bought 68,000 tons of corn.  Japan bought 126,961 tons of food wheat.  Jordan is in for barley. 

 

 

 

 

Weather

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

Weather
conditions will improve in Brazil through next week, but some additional crop stress is expected until the rain begins. Northeastern Argentina received some additional beneficial rain Wednesday leaving mostly the far southwest and extreme northwest still too
dry. Argentina will experience net drying conditions over the next seven days with some rain possible in the south late next week and into the following weekend. Brazil will become favorably moist by this time next week with notable rainfall in the next two
days in Parana and in Minas Gerais throughout the forecast period. Significant rain in southwestern Parana and southeastern Paraguay overnight has bolstered soil moisture nicely.

           
South Africa, Australia, India and China weather and soil conditions have not changed much from those of Wednesday and the outlook in each of these areas will be about the same over the next seven days. That suggests favorable planting and early season crop
development in South Africa. Net drying is expected in India outside of the far south and there is need for greater precipitation in eastern Australia and South Africa. Winter rapeseed in China is rated favorably.

            No
change in Europe or the western CIS crop and field conditions will occur in the coming week.

            Southeast
Asia oil palm production potentials remains favorably rated.

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

 

MARKET
WEATHER MENTALITY FOR WHEAT:  Rain and snow in far southern Kansas, southeastern Colorado and Oklahoma Wednesday was great for improving crop establishment. However, western Kansas failed to get much meaningful moisture and dryness there as well as in southwestern
Nebraska and northeastern Colorado remains a concern. Another chance for precipitation will evolve in the latter part of next week, but it will not bring much significant moisture to the areas that need it most.

            No
change in Russia’s Southern region wheat has occurred recently and not much change is expected for a while. The same is true for Ukraine. However, both of these regions could see improved crop development in the spring if winterkill is kept to a minimum this
year and weather conditions bring some timely moisture this winter and spring.

            China
wheat has established well and should perform well in the spring. India winter crops are also rated favorably.

            Harvest
conditions in Australia are advancing well around brief periods of rain. South Africa’s harvest has also advanced relatively well. Argentina wheat conditions are mostly unchanged with crops filling, maturing and being harvested under fair conditions. Buenos
Aires crops are in the best shape as they have been most of this growing season.

            Europe
winter crops are in various conditions with many crops dormant or semi-dormant. There has been some development in the southwest part of the continent.

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

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

Thursday,
Dec. 3:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • FAO
    World Food Price Index
  • Port
    of Rouen data on French grain exports
  • ANZ
    Commodity Price
  • Indonesian
    palm oil conference, day 2
  • International
    Coffee Conference, day 3
  • Canada
    Statcan wheat, durum, canola, barley and soybean production

Friday,
Dec. 4:

  • 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
  • China’s
    CNGOIC to publish monthly soy and corn reports
  • FranceAgriMer
    weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

 

 

USDA
export sales were on the lower end of expectations for the soybean complex, withing for corn and wheat.  Sorghum sales of 238,600 tons were very good with China taking most of it.  Pork sales were 31,300 tons.  See text below the wheat section. 

 

 

 

 

November
estimates of production of principal field crops

                  
2018    2019    2020   2018-2019 2019-2020

                   
thousands of tonnes         % change

Total
wheat      32352   32670   35183         1.0       7.7

Durum
wheat       5785    5017    6571       -13.3      31.0

Spring
wheat     24053   25952   25841         7.9      -0.4

Winter
wheat      2514    1701    2770       -32.4      62.9

Barley           
8380   10383   10741        23.9       3.4

Canary
seed        158     175     161        11.0      -8.2

Canola
          20724   19607   18720        -5.4      -4.5

Chick
peas         311     252     214       -19.2     -14.8

Corn
for grain   13885   13404   13563        -3.5       1.2

Dry
beans          341     317     490        -7.1      54.7

Dry
field peas    3581    4237    4594        18.3       8.4

Fall
Rye           226     326     475        44.1      45.9

Flaxseed          
492     486     578        -1.3      18.9

Lentils          
2192    2382    2868         8.7      20.4

Mustard
seed       174     135      99       -22.5     -26.6

Oats             
3436    4227    4576        23.0       8.2

Soybeans         
7417    6145    6359       -17.1       3.5

Sunflower
seed      57      63     101         9.8      61.0

 

Macros

US
Initial Jobless Claims Nov-28: 712K (exp 775K; R prev 787K)

–        
Continuing Claims Nov-21: 5520K (exp 5800K; R prev 6089K)

 

 

Corn.

 

Corn
Export Developments

  • South
    Korea’s MFG bought 68,000 tons of optional origin corn at $239.90/ton for shipment between April 27 and May 18.  It may originate from the US. 
  • Results
    awaited: Algeria seeks 35,000 tons of optional origin corn on Thursday for shipment by Jan 5. 

 

Soybean
complex.  

  • No
    USDA 24-hour sales may weigh on soybeans during the day session. 
  • CBOT
    soybeans are finding support from a lower USD, bottom picking and SA weather.  The weather forecast for southern Brazil turned drier overnight for next week. 
  • CBOT
    soybean oil registrations were down 1 (Mason City) to 1,591 and deliveries were 100 (Cust. JP stopped 94, Rand issued 3 and stopped 1). 
  • China
    cash crush margins improved from yesterday. 
  • Argentina
    union workers called for another strike (SOEA) over bonus payments. 
  • Argentina
    plans to tighten the enforcement of sale of grain export dollars to support the peso.  Exporters have only 15 days to convert dollars into pesos.  
  • Indonesia
    will raise its crude palm oil levy to $55-$255 per ton starting Dec. 10, previously imposed $55 for crude palm oil. Below $670 per ton it will be $55 per ton. For crude palm oil below $670-$695, there will be a $60 per ton levy, etc.  

 

Oilseeds
Export Developments

 

Wheat

 

Export
Developments.

  • Turkey
    seeks 400,000 tons of wheat on December 4 for shipment between Jan 8 and Jan 25. 
  • Jordan
    seeks 120,000 tons of wheat on Dec 9 for April through FH May shipment. 
  • Qatar
    seeks 100,000 tons of feed barley on December 8, optional origin. 

 

Rice/Other

  • Results
    awaited:  Bangladesh seeks 50,000 tons of rice for shipment within 40.  L    owest
    offer for 50,000 tons of rice was $404.35/ton. 

·        
Results awaited:  Syria seeks 25,000 tons of white rice. 

·        
South Korea seeks 45,458 tons of US rice on Dec 7 for arrival around April 30 and May 31. 

 

 

Export Sales Highlights

This
summary is based on reports from exporters for the period November 20-26, 2020.

 

Wheat:  Net
sales of 446,400 metric tons (MT) for 2020/2021 were down 44 percent from the previous week and 5 percent from the prior 4-week average.  Increases primarily for Mexico (89,400 MT), Taiwan (83,100 MT), South Korea (81,300 MT, including decreases of 1,500 MT),
Indonesia (68,200 MT, including decreases of 900 MT), and unknown destinations (47,000 MT), were offset by reductions primarily for Venezuela (11,000 MT) and the Dominican Republic (6,800 MT).  Exports of 451,500 MT were up 32 percent from the previous week
and 40 percent from the prior 4-week average.  The destinations were primarily to the Philippines (120,800 MT), China (63,000 MT), Indonesia (60,600 MT), Mexico (57,500 MT), and Honduras (34,300 MT).  
Optional Origin Sales:  For 2020/2021, the current outstanding balance of 10,000 MT, all Spain.

Corn: 
Net sales of 1,371,400 MT for 2020/2021 were down 18 percent from the previous week and 14 percent from the prior 4-week average.  Increases primarily for Mexico (656,900 MT, including 30,000 MT switched from unknown destinations and decreases of 9,700 MT),
unknown destinations (351,400 MT), China (154,800 MT), Japan (138,800 MT, including 32,100 MT switched from unknown destinations), and South Korea (62,600 MT), were offset by reductions primarily for Colombia (90,000 MT) and Guatemala (13,100 MT).  Exports
of 1,072,300 MT–a marketing-year high–were up 23 percent from the previous week and 35 percent from the prior 4-week average.  The destinations were primarily to China (475,800 MT), Mexico (312,300 MT), Japan (82,300 MT), Guatemala (59,500 MT), and Honduras
(49,700 MT).  

Optional
Origin Sales: 
For 2020/2021, new optional origin sales of 60,000 MT were reported for unknown destinations.  Decreases totaling 31,300 MT were reported for Ukraine (27,700 MT) and unknown destinations (3,600 MT).  The current outstanding balance of 1,483,400 MT is for South
Korea (769,000 MT), unknown destinations (224,000 MT), Taiwan (205,000 MT), Vietnam (130,000 MT), China (65,000 MT), Japan (58,000 MT), and Ukraine (32,400 MT). 

Barley: 
No net sales or exports were reported for the week. 

Sorghum: 
Net sales of 238,600 MT for 2020/2021 were down 33 percent from the previous week and 6 percent from the prior 4-week average.  Increases primarily for China (276,600 MT, including 106,000 MT switched from unknown destinations and decreases of 77,600 MT),
were offset by reductions for unknown destinations (38,000 MT).  Exports of 213,700 MT were up 77 percent from the previous week and 58 percent from the prior 4-week average.  The destination was China. 

Rice: 
Net sales of 71,700 MT for 2020/2021 were up 3 percent from the previous week and 54 percent from the prior 4-week average.  Increases were primarily for Mexico (36,700 MT), Haiti (14,600 MT, including decreases of 300 MT), Costa Rica (11,000 MT), Japan (4,500
MT), and Canada (1,700 MT).  Exports of 138,600 MT were down 5 percent from the previous week, but up 42 percent from the prior 4-week average.  The destinations were primarily to Mexico (71,800 MT), Haiti (45,000 MT), Japan (13,300 MT), Canada (3,200 MT),
and South Korea (1,500 MT).

Soybeans: 
Net sales of 406,900 MT for 2020/2021–a marketing-year low–were down 47 percent from the previous week and 68 percent from the prior 4-week average.  Increases primarily for China (476,900 MT, including 396,000 MT switched from unknown destinations and decreases
of 132,900 MT), Thailand (82,400 MT, including 68,000 MT switched from unknown destinations), Vietnam (78,100 MT, including 70,000 MT switched from unknown destinations), Spain (66,900 MT, including 65,000 MT switched from unknown destinations), and the Netherlands
(66,000 MT, including 60,000 MT switched from unknown destinations), were offset by reductions primarily for unknown destinations (539,100 MT).  Exports of 2,492,600 MT were up 3 percent from the previous week, but down 6 percent from the prior 4-week average. 
The destinations were primarily to China (2,012,200 MT), Vietnam (84,700 MT), Thailand (79,700 MT), Mexico (75,500 MT), and Spain (66,900 MT).

Optional
Origin Sales: 
For 2020/2021, the current outstanding balance of 63,000 MT, all China.

Exports
for Own Account: 
For 2020/2021, new exports for own account totaling 29,400 MT were to Canada.  The current exports for own account outstanding balance is 84,300 MT, all Canada.

Soybean
Cake and Meal: 
Net sales of 163,800 MT for 2020/2021, resulting in increases primarily for Mexico (56,100 MT), Bangladesh (45,000 MT), the Philippines (45,000 MT), Ecuador (36,400 MT, including 30,000 MT switched from unknown destinations and decreases of 1,100 MT), and
Guatemala (20,900 MT, including 21,000 MT switched from El Salvador, 200 MT switched from Honduras, and decreases of 500 MT), were offset by reductions primarily for unknown destinations (27,000 MT), Canada (25,400 MT), and El Salvador (11,000 MT).  Exports
of 227,500 MT were primarily to Colombia (40,600 MT), Guatemala (39,900 MT), Ecuador (32,000 MT), Mexico (30,900 MT), and Canada (25,900 MT). 

Soybean
Oil: 
Net sales of 2,500 MT for 2020/2021, resulting in increases primarily for Costa Rica (2,000 MT), Nicaragua (1,100 MT), Mexico (500 MT), and the Dominican Republic (500 MT), were offset by reductions for Canada (1,700 MT).  Exports of 28,700 MT for 2020/2021
were primarily to the Dominican Republic (17,000 MT), Jamaica (4,000 MT), Venezuela (4,000 MT), and Mexico (2,500 MT).

Cotton: 
Net sales of 277,900 RB for 2020/2021 were down 22 percent from the previous week, but up 33 percent from the prior 4-week average.  Increases were primarily for China (130,800 RB), Vietnam (46,000 RB, including 4,600 RB switched from China and decreases of
5,800 RB), Pakistan (44,500 RB), Turkey (12,500 RB), and Indonesia (11,100 RB).  For 2021/2022, net sales of 21,800 RB were for Vietnam (15,400 RB) and Mexico (6,400 RB).  Exports of 180,800 RB were down 1 percent from the previous week and 29 percent from
the prior 4-week average.  Exports were primarily to China (80,300 RB), Vietnam (27,500 RB), Pakistan (17,000 RB), Bangladesh (12,000 RB), and Mexico (11,700 RB).  Net sales of Pima totaling 7,900 RB were down 71 percent from the previous week and 54 percent
from the prior 4-week average.  Increases were primarily for Peru (3,500 RB), Vietnam (1,800 RB), Honduras (1,200 RB), and Bangladesh (900 RB).  Exports of 27,600 RB–a marketing-year high–were up 27 percent from the previous week and 31 percent from the
prior 4-week average.  The destinations were primarily to India (12,400 RB), China (7,400 RB), Pakistan (4,100 RB), Vietnam (1,600 RB), and Thailand (1,000 RB). 

Exports
for Own Account: 
For 2020/2021, new exports for own account totaling 13,000 RB were to China.  Exports for own account totaling 2,900 RB to China (2,200 RB) and Vietnam (700 RB) were applied to new or outstanding sales.  The current exports for own account outstanding balance
of 41,900 RB is for China (40,500 RB), Bangladesh (1,000 RB), Indonesia (300 RB), and Vietnam (100 RB).

 

Hides
and Skins: 
Net sales of 267,400 pieces for 2020 were down 27 percent from the previous week and 25 percent from the prior 4-week average.  Increases primarily for China (150,500 whole cattle hides, including decreases of 15,700 pieces), Mexico (42,400 whole cattle hides,
including decreases of 1,100 pieces), South Korea (32,800 whole cattle hides, including decreases of 1,100 pieces), Brazil (20,000 whole cattle hides), and Thailand (10,600 whole cattle hides), were offset by reductions for Indonesia (100 pieces).  For 2021,
total net sales of 3,600 pieces were reported for China.  Exports of 309,000 pieces reported for 2020 were down 13 percent from the previous week and 18 percent from the prior 4-week average.  Whole cattle hides exports were primarily to China (248,900 pieces),
Mexico (24,400 pieces), South Korea (22,200 pieces), Taiwan (4,000 pieces), and Brazil (3,400 pieces).  

 

Net
sales of 223,800 wet blues
for 2020 were up noticeably from the previous week and from the prior 4-week average.  Increases primarily for Vietnam (131,000 unsplit, including decreases of 800 unsplit), China (67,100 unsplit, including decreases of 200 unsplit), Brazil (28,900 unsplit),
Italy (1,200 unsplit), and Hong Kong (100 unsplit), were offset by reductions primarily for Taiwan (4,300 unsplit).  For 2021, net sales of 40,800 wet blues were reported for Italy (40,000 unsplit) and Vietnam (800 unsplit).  Additionally, net sales of 5,100
grain splits reported for Germany (6,000 grain splits) and China (4,000 grain splits), were offset by reductions for India (4,900 grain splits).  Exports of 111,200 wet blues for 2020 were up noticeably from the previous week, but down 19 percent from the
prior 4-week average.  The destinations were primarily to Vietnam (47,500 unsplit), China (46,300 unsplit), Thailand (8,700 unsplit), Mexico (3,600 unsplit and 700 grain splits), and Taiwan (1,900 unsplit).  Net sales reductions of 20,700 splits resulting
in increases for Taiwan (2,400 pounds) and China (300 pounds, including decreases of 8,000 pounds), were more than offset by reductions for Vietnam (23,300 pounds).  For 2021, net sales reductions of 56,300 splits were for Vietnam (24,100 pounds) and China
(32,200 pounds).  Exports of 368,700 pounds were to Vietnam (202,100 pounds), China (124,200 pounds), and Taiwan (42,400 pounds).

 

Beef: 
Net
sales of 13,700 MT reported for 2020 were down noticeably from the previous week and down 16 percent from the prior 4-week average.  Increases primarily for Japan (7,200 MT, including decreases of 500 MT), South Korea (3,800 MT, including decreases of 400
MT), Mexico (1,000 MT, including decreases of 100 MT), China (800 MT, including decreases of 100 MT), and Canada (400 MT), were offset by reductions primarily for Hong Kong (300 MT) and Colombia (100 MT).  For 2021, net sales of 3,200 MT were primarily for
South Korea (1,600 MT), Hong Kong (500 MT), Japan (400 MT), and Taiwan (400 MT).  Exports of 16,600 MT were down 18 percent from the previous week and 15 percent from the prior 4-week average.  The destinations were primarily to South Korea (4,000 MT), Japan
(3,900 MT), China (2,100 MT), Mexico (2,000 MT), and Hong Kong (1,200 MT).

Pork: 
Net
sales of 31,300 MT reported for 2020 were up 66 percent from the previous week, but down 6 percent from the prior 4-week average.  Increases primarily for Mexico (12,900 MT, including decreases of 1,000 MT), China (7,400 MT, including decreases of 1,300 MT),
Japan (4,200 MT, including decreases of 300 MT), Canada (1,700 MT, including decreases of 400 MT), and South Korea (1,500 MT, including decreases of 300 MT), were offset by reductions for Vietnam (100 MT) and Costa Rica (100 MT).  For 2021, net sales of 4,200
MT were primarily for China (1,400 MT), Colombia (700 MT), Australia (600 MT), Canada (400 MT), and Mexico (300 MT).  Exports of 34,100 MT were down 17 percent from the previous week and 12 percent from the prior 4-week average.  The destinations were primarily
to Mexico (11,500 MT), China (9,000 MT), Japan (4,700 MT), South Korea (3,000 MT), and Canada (2,000 MT).

 

U.S. EXPORT SALES FOR WEEK ENDING 11/26/2020

 

 





























 

CURRENT MARKETING YEAR

NEXT MARKETING YEAR

COMMODITY

NET SALES

OUTSTANDING SALES

WEEKLY EXPORTS

ACCUMULATED EXPORTS

NET SALES

OUTSTANDING SALES

CURRENT YEAR

YEAR

AGO

CURRENT YEAR

YEAR

AGO

 

THOUSAND METRIC TONS

WHEAT

 

 

 

 

 

 

 

 

   HRW     

110.6

1,530.5

1,318.8

112.9

4,949.4

4,778.4

0.0

22.0

   SRW    

6.5

393.6

526.0

32.6

1,000.5

1,420.7

0.0

100.0

   HRS     

163.5

1,520.8

1,185.3

153.1

3,594.9

3,366.9

0.0

45.0

   WHITE   

147.5

2,503.1

868.9

129.7

2,433.9

2,314.4

0.0

20.0

   DURUM  

18.2

172.4

175.0

23.2

393.0

501.1

0.0

0.0

     TOTAL

446.4

6,120.3

4,073.9

451.5

12,371.6

12,381.5

0.0

187.0

BARLEY

0.0

30.4

33.9

0.0

12.4

25.2

0.0

0.0

CORN

1,371.4

27,920.3

8,271.1

1,072.3

10,372.9

6,344.4

0.0

747.0

SORGHUM

238.6

3,255.7

683.9

213.7

1,275.5

242.3

0.0

327.0

SOYBEANS

406.9

25,211.2

9,956.3

2,492.6

27,126.4

15,987.9

0.0

69.0

SOY MEAL

163.8

3,192.9

3,180.1

227.5

1,908.4

1,803.8

0.0

18.1

SOY OIL

2.5

289.7

137.5

28.7

100.3

194.8

0.0

0.6

RICE

 

 

 

 

 

 

 

 

   L G RGH

49.2

245.8

389.0

70.6

531.2

496.4

0.0

0.0

   M S RGH

0.0

19.4

16.4

0.2

9.5

14.4

0.0

0.0

   L G BRN

0.2

10.4

13.7

0.4

11.7

15.4

0.0

0.0

   M&S BR

0.2

16.1

56.9

1.7

34.3

1.9

0.0

0.0

   L G MLD

16.5

48.1

213.1

48.3

197.8

375.4

0.0

0.0

   M S MLD

5.7

195.6

190.7

17.5

139.8

172.8

0.0

0.0

     TOTAL

71.7

535.5

879.7

138.6

924.2

1,076.4

0.0

0.0

COTTON

 

THOUSAND RUNNING BALES      

   UPLAND

277.9

5,733.9

7,467.3

180.8

4,132.1

3,099.3

21.8

651.9

   PIMA

7.9

235.9

161.2

27.6

251.1

132.7

0.0

0.7

 

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International
One Lincoln Center
18 W 140 Butterfield Rd.

Oakbrook Terrace, Il. 60181

W: 312.604.1366

treilly@futures-int.com

ICE IM: 
treilly1

Skype: fi.treilly

 

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