FI Morning Grain Comments 12/09/20

PDF attached

 

Morning. 

 

Higher
prices on Wednesday on positioning ahead of the major government reports.  The SA weather forecast is largely unchanged.  Argentina grain inspections and oilseed workers plan another 24-hout strike starting today over wages.  Offshore values are leading soybean
oil 10 points higher and meal $2.40 higher.  Five major reports are due out Thursday, MPOB, China CASDE, Conab, USDA Export Sales & USDA S&D update.  Traders not expecting any major adjustments to global balance sheets.  We look for minor revisions to the
Brazil and Argentina crops and for USDA to possibly raise the US soybean export forecast.  A Bloomberg poll looks for weekly US ethanol production to be down 3,000 at 971,000 barrels (960-994 range) from the previous week and stocks up to 397,000 barrels to
21.637 million.

 

 

 

 

 

 

Weather

            In
Argentina, concern remains of dryness in the southern part of the nation. Some shower and thunderstorm activity will occur Thursday due to a frontal boundary; however, conditions will then likely be drier-biased in this area for a while. The next opportunity
for some meaningful moisture in southern Argentina will then be possible Dec. 16 – 18; though, this may be erratic. Rain in Argentina will be greater in the north the next two weeks compared to the south.

           
In Brazil, conditions will still be favorable in much of the nation for crop development. There will be little to no rain in much of Bahia or eastern Piaui through next Tuesday; though, this area is likely to trend at least a little wetter in the week 2 of
the outlook. Northwestern Mato Grosso do Sul may be drier than preferred in the next two weeks; though, there will be some occasional erratic shower and thunderstorm activity in this area.

 

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

 

Corn.

• CBOT
  March corn is higher on technical buying.  Look
  for positioning ahead of the government reports due out Thursday.  Traders not expecting any major adjustments to global balance sheets.  We look for minor revisions to the Brazil and Argentina crops and for USDA to possibly raise the US soybean export forecast. 
  
• DTN
  noted state-owned Chinese COFCO is working on a phytosanitary agreement to import Brazilian corn.  Some think this could take months to put in place. 
  
• We
  picked up China bought US ethanol cargoes on Tuesday (3 for Jan/Feb).
• Today
  is day 3 of the Goldman Roll.
• A
  Bloomberg poll looks for weekly US ethanol production to be down 3,000 at 971,000 barrels (960-994 range) from the previous week and stocks up to 397,000 barrels to 21.637 million.
  

 

Corn
Export Developments

• Taiwan’s
  MFG bought around 65,000 tons of US corn for Feb/Mar shipment at $1.9639/bu over the May futures. 
  

 

 

Soybean
complex.  

• The
  soybean complex is rebounding on a lower USD and bottom picking.  The SA weather forecast is largely unchanged.  There was a report China bought at least one July Brazilian soybean cargo on Tuesday.  They were inquiring for US Sep/Oct shipment. 
  
• CBOT
  January crush has stabilized today after trading to a November 24 low on Tuesday. 
  
• Support
  in January soybean meal is seen at its 50-day MA of $375.  The January soybean oil chart appears to be slightly bearish but a confirmation of tight Malaysian palm oil supplies, issued by MPOB later tonight, could help support soybean oil over the short term.   
  
• Argentina
  is back from holiday and Argentina grain inspections & oilseed workers plan another 24-hout strike starting today over wages.  Palm oil futures and cash traded 8 and $7.00 lower, respectively. 
  
• Brazil’s
  Mato Grosso, Goias, and Minas Gerais will see rain through Sunday.  Argentina will pick up on rain starting Friday. 
  
• The
  Brazilian real traded to its weakest level since June 2016 against the USD on Tuesday.  Brazil soybeans, meal and oil premiums are all weaker from the previous day. 
  
• US
  equities were mixed, USD lower, and WTI slightly higher. 
• Russia
  plans to impose a 30% export duty in some types of sunflower products due to a lower production and higher prices. 
  

• Offshore
  values this morning were leading CBOT soybean oil 14 higher and meal $3.10 higher.  
  
• Rotterdam
  soybean oil values were about 12 euros lower, rapeseed oil down 5, and Rotterdam meal mostly 1-4 euros lower from this time previous session. 
  
• China
  cash crush margins were 82 cents on out our calculation (85 previous), compared to 81 last week and 161 year ago.
  

• Malaysian
  palm oil

 

Oilseeds
Export Developments

• Today
  the USDA AMS seeks 17,200 tons of bulk crude degummed soybean oil for Mozambique. 
  

• Egypt’s
  GASC seeks at least 30,000 tons of soybean oil and 10,000 tons of sunflower oil on Thursday for arrival from Jan. 28 to Feb. 14.  The picked up local soybean oil in their last two tenders between $888 and $988.50/ton.  Last time they secured sunflower oil
  was back in early October. 
• Iran’s
  GTC seeks about 30,000 tons of sunflower oil. 

 

Wheat

• US
  wheat futures are mixed to mostly higher on technical buying and positioning ahead of the USDA report due out tomorrow.
  
• CBOT
  SRW deliverable stocks fell 564,000 bushels from the previous week and are 8 percent lower than this time last year.  HRW deliverable stocks are 10 percent below year ago. 
  
• Russia’s
  AgMin sees the 2020 grain crop above 131 million tons.  IKAR in late November estimated the grain crop at 125 million tons.
  
• Ukraine
  used up 88 percent or 3.4 million tons of their barley export quota (up to 4.2MMT) with most of it for China. 
  
• EU
  March milling wheat was up 0.25 at 201.75 euros.

 

Export
Developments.

• Jordan
  saw 4 offers for 120,000 tons of wheat for April through FH May shipment. 
  
• Japan
  in a SBS import tender seeks 80,000 tons of feed wheat and 100,000 tons of barley on Dec 16 for arrival around March 11. 
  

• Japan
  bought 131,305 tons of milling wheat.  Original details as follows.

• Jordan
  seeks 120,000 tons of feed barley on December 15 for March-May shipment.

 

Rice/Other

·        
None