FI Morning Grain Comments 12/07/20

Dec 7, 2020







PDF attached

 

Morning. 

 

 

Lower
trade across the board after as expected weather occurred across South America.  Additional talk of a US economic slowdown from business shutdowns over rising Covid-19 cases are spooking traders across all markets.  Argentina is on holiday today and Tuesday.
US March soybeans and soybean meal are back trading near last week’s low.  Soybean oil is lower following a 45 MYR decline in Malaysian palm (cash was down $2.00/ton).  China November soybean imports were 9.59 million tons, up from 8.28 million November 2019. 
China meat imports in November were 775,000 tons.  China soybean futures were down slightly, meal down 0.2%, soybean oil up 1.0 percent and palm up 1.2%.  Brazil planted 90 percent of their soybean crop, 3 points below the previous season.  China corn was
slightly lower.  Chicago March wheat, at a 2-month low, traded through its 100-day MA ($5.7225) overnight and the last time this happened was back in August.  Good French crop conditions and large production estimates for Australia and Canada along with waning
US exports are weighing on US and EU wheat futures. 

 

Argentina
saw minimal showers over the weekend except for the northwest were up to 0.50″ resulted.  Crop stress was low. Argentina will see rain southwest to northeast Thursday through Saturday.  Brazil’s Mato Grosso do Sul to southwestern Sao Paulo, Parana and northern
Santa Catarina saw rain over the weekend.  Rain will fall this week across Mato Grosso and Tocantins to Minas Gerais and Sao Paulo where 1.00 to 3.00 inches is expected.  It will remain dry across Piaui, Pernambuco and parts of Bahia. 

 

South
Korea’s NOFI bought an additional 69,000 tons of US PNW corn at $236.73 a ton c&f.  Taiwan’s MFIG seeks 65,000 tons of optional origin corn on Wednesday for February/March shipment.  Algeria may have passed on barley. 

 

 

Weather

 

MOST
IMPORTANT WEATHER IN THE WORLD

 

  • Friday
    into Sunday  morning rainfall was minimal in Argentina except for the northwest where up to 0.45 inch of moisture resulted in Santiago del Estero and Salta
    • Highest
      temperatures Friday and Saturday were in the 70s and lower 80s Fahrenheit followed by lows in the 40s and 50s
      • The
        milder temperatures helped keep evaporative moisture loss rates low while weather conditions were dry
    • Topsoil
      moisture Friday was rated favorably from the northeast half of Cordoba, and much of Santa Fe and Entre Rios northward to Formosa and Chaco while marginally adequate to short elsewhere
    • Subsoil
      moisture Friday was rated favorably in Buenos Aires, eastern Formosa and parts of Corrientes along with northeastern and extreme southern Santa and short to very short elsewhere
    • Overall,
      crop moisture stress was kept low through the weekend, but worry over soil moisture continues in the longer term outlook, although crops are not very bad shape today because of recent rain.

 

  • Argentina
    weather will be mostly dry through Wednesday and then showers will scatter from southwest to northeast Thursday through Saturday,
    but resulting rainfall is unlikely to be great enough to seriously bolster soil moisture
    • Moisture
      totals will vary from 0.05 to 0.25 inch with local totals 0.75 inch in the south and 0.20 to 0.75 inch with local totals of 1.00 to 2.00 inches in the north
    • Temperatures
      will be seasonable with a slight warmer than usual bias during this coming week
    • The
      precipitation will be a little too erratic for generalized improvements in soil or crop conditions except in the northeast where it will stay favorably moist

 

  • Argentina
    weather next week will include some scattered showers in the north Monday and Tuesday and more Thursday in the central and northeastern parts of the nation
    • 0.15
      to 0.60 inch of rain will result with local totals to 0.80 inch except in the northeast where a few areas may receive 1.00 to 2.50  inches
    • Temperatures
      will continue seasonable with a slight warmer bias during the December 14-20 period
    • A
      general lack of rain in southern Argentina Dec. 14 – 20 will make two weeks without much rain and sufficient warm weather will have topsoil moisture more significantly depleted by the end of the second week stressing crops more seriously than that of this
      first week

 

  • Brazil
    rainfall was most significant from Mato Grosso do Sul to southwestern Sao Paulo, Parana and northern Santa Catarina during the 48 hours ending dawn Sunday with amounts of 0.83 to 2.79 inches. One location in southeastern Parana reported 4.21 inches
    • Rain
      also fell significantly in parts of southern Minas Gerais and northern Mato Grosso where 1.00 to 2.87 inches resulted
    • In
      contrast, rainfall elsewhere was rarely more than 0.68 inch, although as much as 1.18 inches occurred in northern Sao Paulo
      • Net
        drying occurred in most of the areas reporting rainfall less than 0.50 inch
    • Highest
      afternoon temperatures in southern Brazil were in the upper 70s and some 80s Fahrenheit while readings in the north were in the upper 80s and 90s with a few extremes near and just over 100
      • Lowest
        morning temperatures were in the 50s and 60s south and 60s and 70s north
    • Weekend
      precipitation expanded the area of increased soil moisture to central Mato Grosso after being mostly saturated from the heart of Parana and southern Paraguay into Rio Grande de Sul Brazil Friday. Subsoil moisture was still extremely low in parts of Bolivia,
      southern Mato Grosso and Goias because of inadequate weekend rain and continued warm to hot temperatures after the ground was already rated too dry Friday.

 

  • Brazil
    rainfall this workweek will be restricted from southeastern Bolivia and the western and southern parts of Mato Grosso do Sul to Parana, Santa Catarina and portions of Rio Grande do Sul where net drying is likely, despite a few some showers and thunderstorms
    • Rain
      will fall frequently from Mato Grosso and Tocantins to Minas Gerais and Sao Paulo where 1.00 to 3.00 inches is expected with local totals of 3.00 to 6.00 inches
    • A
      new wave of rain will pass through Rio Grande do Sul to Parana, far southern Mato Grosso do Sul and southern Paraguay during the weekend with rainfall to 0.60 inch in Rio Grande do Sul and 0.40 to 2.00 inches in other areas with locally more
    • This
      week’s driest weather will be in Piaui, Pernambuco and parts of Bahia, but amounts might also be quite limited in southeastern Bolivia and northwestern Mato Grosso do Sul
    • Temperatures
      will be seasonable

 

  • Brazil
    weather Dec. 14-20 will scatter rain and thunderstorms throughout Brazil, but resulting fall may be light and sporadic in southeastern Bolivia, northwestern Mato Grosso do Sul and some neighboring areas
    • Rain
      is likely in most other areas at one time or another, although southern Rio Grande do Sul and parts of Uruguay may not get much rain
    • Rain
      totals will vary widely in the Dec. 14-20 period with some of the greatest amounts possible from southern Paraguay into western Parana and in northern Rio Grande do Sul as well as from Minas Gerais to Tocantins and western Bahia
      • Most
        daily amounts will range from 0.30 to 0.80 inch with local totals of 1.00 to 1.60 inches
        • The
          lightest rainfall areas may not get more than 0.75 inch through the entire week
    • Temperatures
      should continue seasonable
    • Brazil’s
      bottom line is not bad with most areas getting rain at one time or another and temperatures in a seasonable range.  There is a little concern about crop moisture and potential stress in northwestern Mato Grosso do Sul, southeastern Bolivia and a few immediate
      neighboring areas. There is also reason for concern in parts of Bahia and Piaui, although more so in this first week of the outlook than next week.

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

Monday,
Dec. 7:

  • China
    trade data on soybean and meat imports for November
  • Ivory
    Coast cocoa arrivals
  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • HOLIDAY:
    Thailand

Tuesday,
Dec. 8:

  • Australia’s
    Abares releases quarterly agricultural commodities report
  • French
    agriculture ministry to publish crop estimates
  • UkrAgroConsult
    Black Sea Grain conference
  • BRF
    Day
  • Brazil
    Unica cane crush, sugar production (tentative)
  • National
    Grain & Feed Association Country Elevator Conference, 10am

Wednesday,
Dec. 9:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • National
    Grain & Feed Association Country Elevator Conference, 10am

Thursday,
Dec. 10:

  • China’s
    agriculture ministry (CASDE) releases monthly report on supply, demand, 10am local
  • Malaysian
    Palm Oil Board releases data on November stockpiles, exports, production, 12:30pm local
  • FranceAgriMer
    monthly crop report
  • Agroinvestor
    Russian agriculture conference
  • Port
    of Rouen data on French grain exports
  • Conab’s
    data on area, output and yield of soybeans and corn in Brazil, 7am
  • National
    Grain & Feed Association Country Elevator Conference, 10am
  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • USDA’s
    monthly World Agricultural Supply and Demand (WASDE) report, 12pm
  • HOLIDAY:
    Thailand

Friday,
Dec. 11:

  • ICE
    Futures Europe weekly commitments of traders report
  • HOLIDAY:
    Thailand

Source:
Bloomberg and FI

 

 

 

 

Bloomberg
Trade Estimates:

 

 

 

 

 

CFTC
Commitment of Traders

Funds
were again more long than expected as of last Tuesday for corn and soybeans, and were more long for wheat, meal and soybean oil. 

 

 

 

 

 

 

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
296,452    -13,390    389,281      1,148   -657,758     18,543

Soybeans          
166,311    -10,646    186,233    
-7,727   -350,615     23,090

Soyoil             
75,735     -4,995    129,988       -607   -224,269      6,200

CBOT
wheat         -28,845    -21,891    136,967     -2,387    -90,400     26,195

KCBT
wheat          23,263       -581     69,156     -2,541    -94,078      2,489

=================================================================================

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
270,633    -16,967    241,804      2,498   -628,469     18,543

Soybeans          
194,683     -9,127    118,029     -4,808   -353,324     23,060

Soymeal            
70,386       -749     71,120       -882   -189,186      5,075

Soyoil            
104,715       -626     89,777     -2,270   -232,405      8,109

CBOT
wheat          -4,397    -19,696     87,549        334    -80,497     22,288

KCBT
wheat          44,506     -3,915     42,319       -998    -89,769      2,578

MGEX
wheat           4,755     -1,099      2,099        -23    -10,478      3,948

                
———- ———- ———- ———- ———- ———-

Total
wheat         44,864    -24,710    131,967       -687   -180,744     28,814

 

Live
cattle         39,813       -211     65,455     -2,906   -117,591     -1,203

Feeder
cattle        1,067      1,764      7,749        671     -3,686       -758

Lean
hogs           38,359      1,926     48,004        -69    -87,999     -2,320

 

                     
Other             NonReport                  Open

                  
     Net        Chg        Net        Chg   Interest        Chg

Corn              
144,006      2,227    -27,974     -6,300  2,078,871    -57,572

Soybeans           
42,539     -4,408     -1,928     -4,717  1,253,881     -8,466

Soymeal            
22,209     -1,662     25,470     -1,782    475,823     -9,372

Soyoil             
19,365     -4,615     18,547       -599    545,609      8,864

CBOT
wheat          15,066     -1,008    -17,721     -1,918    475,976    -15,536

KCBT
wheat           1,286      1,701      1,658        633    223,335     -8,644

MGEX
wheat           3,429       -197        195     -2,627     66,959     -2,417

                
———- ———- ———- ———- ———- ———-

Total
wheat         19,781        496    -15,868     -3,912    766,270    -26,597

 

Live
cattle         25,408      4,048    -13,084        272    326,450       -269

Feeder
cattle        1,888         27     -7,019     -1,706     43,860      2,144

Lean
hogs           14,615     -1,210    -12,979      1,674    250,974       -313

 

Macros

 

Corn.

  • Risk
    off trade is pressuring March corn
    with prices approaching its intraday session low last week of $4.1450/bu.  Weather over the weekend was about as expected for South America.  Additional talk of a US economic slowdown from business shutdowns over rising Covid-19 cases are spooking traders
    across all markets. 
  • The
    USD paired about 20 points of gains (up 30 earlier) from around 5:30 am CT to about 10 points higher and WTI was about $0.44 lower. 
  • Argentina’s
    markets will be closed Monday and Tuesday for holiday. 
  • AgRural
    lowered their Brazil summer corn crop estimate to 19.4 million tons from 20.7 million previous. 
  • China
    suspended beef imports from a sixth Australian beef supplier. 
  • France
    discovered a H5 strain of bird flu on a duck farm in the southwestern part of the country. 
  • IHS
    Markit on Friday cut their 2020 EU corn production estimate by 2 million tons to 60 million. USDA is at 64.2 million tons. 

 

Prospects
for Swine Feed Costs in 2021

Langemeier,
M. “Prospects for Swine Feed Costs in 2021.” farmdoc daily (10):207, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, December 4, 2020.

https://farmdocdaily.illinois.edu/2020/12/prospects-for-swine-feed-costs-in-2021.html?utm_source=farmdoc+daily+and+Farm+Policy+News+Updates&utm_campaign=323fcf4cd0-FDD_RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_2caf2f9764-323fcf4cd0-173649469

 

Corn
Export Developments

  • South
    Korea’s NOFI bought an additional 69,000 tons of US PNW corn at $236.73 a ton c&f. 
  • Taiwan’s
    MFIG seeks 65,000 tons of optional origin corn on Wednesday for February/March shipment. 

 

Soybean
complex.  

  • US
    March soybeans and soybean meal are back trading near last week’s low after SA saw as expected rain over the weekend.  European meal cash prices were under pressure this morning with most meal markets around 2-8 euros off from late Friday indications. 
  • Soybean
    oil is lower following a 45 MYR decline in Malaysian palm (cash was down $2.00/ton). 
  • China
    November soybean imports were 9.59 million tons, up from 8.28 million November 2019 and a record for the month.  China meat imports in November were 775,000 tons.  China soybean futures were down slightly, meal down 0.2%, soybean oil up 1.0 percent and palm
    up 1.2%. 
  • Argentina
    is on holiday today and Tuesday.
  • Argentina’s
    SOEA oilseed union should have ended their strike on Sunday.
  • Brazil
    planted 90 percent of their soybean crop, 3 points below the previous season. 
  • Argentina
    saw minimal showers over the weekend except for the northwest were up to 0.50″ resulted.  Crop stress was low. Argentina will see rain southwest to northeast Thursday through Saturday.  Brazil’s Mato Grosso do Sul to southwestern Sao Paulo, Parana and northern
    Santa Catarina saw rain over the weekend.  Rain will fall this week across Mato Grosso and Tocantins to Minas Gerais and Sao Paulo where 1.00 to 3.00 inches is expected.  It will remain dry across Piaui, Pernambuco and parts of Bahia. 
  • Strategie
    Grains – EU and Britain rapeseed production could reach 18.2 million tons from a very low 17.2 million tons this year.
  • U.S.
    biodiesel credits traded at a three-year high, at $1.00 on Friday, up from $0.95 previous day, in part to companies looking to cover 2019 blending obligations as speculation has grown that the new administration will pair back on providing small facility waivers.
  • A
    Reuters poll of private groups, separate from the December S&D poll, calls for Brazil soybean production at a record of 131.79 million tons, up 5.6% from Conab 2019-20 estimate of 124.8 million tons, and compares to 132.25 million tons polled in October.
  • Safras
    estimated Brazil producers sold an estimated 75.4 million tons of soybeans for the recently planted soybeans, or 56.5 percent of a production estimate of 133.517 million tons.  At this time last year sales were 37.8 percent and average of 34.5 percent.  Safras
    also estimated only 1.4 million tons of 2019-20 soybeans are left to sell by producers. 

 

 

Oilseeds
Export Developments

 

Wheat

 

Export
Developments.

  • Japan
    seeks 131,305 tons of milling wheat on December 9. 
  • Algeria
    may have passed on 25,000 tons of feed barley for LF January shipment. 
  • Jordan
    seeks 120,000 tons of feed barley on Dec 8 for March-May shipment. 
  • 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

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

 

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

 

Description: Description: Description: Description: FImail

 

Trading of futures, options, swaps and other derivatives is risky and is not suitable for all persons.  All of these investment products are leveraged, and you can lose more than your initial deposit.  Each investment product is offered
only to and from jurisdictions where solicitation and sale are lawful, and in accordance with applicable laws and regulations in such jurisdiction.  The information provided here should not be relied upon as a substitute for independent research before making
your investment decisions.  Futures International, LLC is merely providing this information for your general information and the information does not take into account any particular individual’s investment objectives, financial situation, or needs.  All investors
should obtain advice based on their unique situation before making any investment decision.  The contents of this communication and any attachments are for informational purposes only and under no circumstances should they be construed as an offer to buy or
sell, or a solicitation to buy or sell any future, option, swap or other derivative.  The sources for the information and any opinions in this communication are believed to be reliable, but Futures International, LLC does not warrant or guarantee the accuracy
of such information or opinions.  Futures International, LLC and its principals and employees may take positions different from any positions described in this communication.  Past results are not necessarily indicative of future results.

 


pdf icon AMcom120720.pdf