FI Morning Grain Comments 12/11/20

PDF attached

 

Morning. 

 

The
soybean complex was mixed early this morning on lack of direction, corn lower and wheat mostly higher.  The South American weather forecast was mainly unchanged this morning.  Rain in Brazil will fall across the northern areas through mid-weekend and central/southern
areas Sunday through Tuesday.  Argentina is slated to see rain across the central and northern areas this weekend.  Argentina grain inspectors and oilseeds workers extended their strike over wages on Thursday for at least another day.  For soybean procurement,
China was quiet on Thursday.  The Philippines bought about 100,000 tons of Australian feed wheat (in for 200k) for Feb-Apr shipment at $260 & $265/ton, along with 90,000 tons of soybean meal from the US for March 16-April 15 shipment.  China soybean and soybean
oil futures were higher while meal traded lower.  Malaysian palm futures and cash were up 7 and $7.50, respectively.  EU vegetable oils were mixed while EU meal was weaker.  Russia may impose the wheat export tax at around 2,000 rubles ($27.30) per ton for
Feb. 15-June 30.  Russia added sugar to the list of possible commodities to restrict. 

 

 

 

Weather

 

           
In Argentina, some shower and thunderstorm activity will occur in the southern part of the nation tonight. Net drying will then likely occur in the south Saturday through at least Wednesday which will lead to some increase in crop stress. Rain in northern
Argentina will be greater, especially in northeastern Argentina. This evening’s GFS model run was notably aggressive with a rain event in much of the nation Dec. 20 – 22 (except for far eastern areas). Some erratic showers and thunderstorms will be possible;
however, this event was overdone, and changes are likely in future model runs.

           
In Brazil, conditions will still be favorable in much of the nation for crop development; though, there will be some pockets that need more rain. Bahia and southeastern Piaui will receive little to no rain through next Thursday; however, there will likely
be some increased rainfall in this area in week 2 of the outlook. Northwestern Mato Grosso do Sul will also be drier than preferred through week 1 but will likely get at least some increase of rain later in week 2 as well.

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

Friday,
Dec. 11:

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

Monday,
Dec. 14:

• USDA
  weekly corn, soybean, wheat export inspections, 11am
• U.S.
  winter wheat conditions, cotton harvested, 4pm
• Monthly
  MARS bulletin on crop conditions in Europe
• Vietnam
  customs data on coffee, rice, rubber exports in November
• Ivory
  Coast cocoa arrivals

Tuesday,
Dec. 15:

• Brazil’s
  Conab releases sugar, cane and ethanol production data
• Malaysia’s
  Dec. 1-15 palm oil export data
• New
  Zealand global dairy trade auction
• Brazil’s
  sugar-cane industry group Unica holds year-end press conference

Wednesday,
Dec. 16:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• HOLIDAY:
  Bangladesh

Thursday,
Dec. 17:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• USDA
  Total Milk Production, 3pm
• Port
  of Rouen data on French grain exports
• Conab’s
  estimate for 2020 Brazil coffee crop
• Poland
  publishes crop output figures for 2020

Friday,
Dec. 18:

• 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
• U.S.
  Cattle on Feed

Source:
Bloomberg and FI

 

 

 

 

 

Macros

US
PPI Final Demand (M/M) Nov: 0.1% (est 0.1%; prev 0.3%)

US
PPI Ex Food, Energy (M/M) Nov: 0.1% (est 0.2%; prev 0.1%)

US
PPI Ex Food, Energy, Trade (M/M) Nov: 0.1% (est 0.2%; prev 0.2%)

US
PPI Final Demand (Y/Y) Nov: 0.8% (est 0.7%; prev 0.5%)

US
PPI Ex Food, Energy (Y/Y) Nov: 1.4% (est 1.5%; prev 1.1%)

US
PPI Ex Food, Energy, Trade (Y/Y) Nov: 0.9% (prev 0.8%)

 

Canadian
Capacity Utilization Rate Q3: 76.5% (est 78.0%; prev 70.3%)

 

Russian
Trade Balance Oct: 6.4B (est 7.2B; prev 10.1B)

Russian
Exports Oct: 28.2B (est 27.9B; prev 30.5B)

Russian
Imports Oct: 21.8B (est 21.3B; prev 20.5B)

 

 

Corn.

• CBOT
  March corn is lower on lack of fresh bullish news and follow through selling after USDA made no changes to the US corn balance sheet on Thursday. 
  
• The
  USD was up 19 points as of 7:26 am CT. 
• Today
  is the last day of the Goldman Roll.
• China
  sold 564,900 tons of corn from state reserves in Jilin to local refineries at an average price of 2,309 yuan/ton.  This amount was nearly all what was offered. 
  
• China
  banned two Brazil meat suppliers over coronavirus concerns. 

 

Corn
Export Developments

• None
  reported

 

Soybean
complex.  

• The
  soybean complex was mixed early Friday morning on lack of direction. 

• March
  CBOT crush was 3 cents lower during the overnight trade. 
• Soybean
  meal spread movement has been volatile as (some) the domestic market is in disarray. 
  
• The
  South American weather forecast was mainly unchanged this morning.  Rain in Brazil will fall across the northern areas through mid-weekend and central/southern areas Sunday through Tuesday.  Argentina is slated to see rain across the central and northern areas
  this weekend. 
• Argentina
  grain inspectors and oilseeds workers extended their strike over wages on Thursday for at least another day. 
  
• China
  was quiet on Thursday due in part to USDA results. 
• Offshore
  values this morning were leading CBOT soybean oil 2 higher (60 lower for the week to date) and meal $1.40 lower ($3.90 higher week to date).  
  
• Rotterdam
  soybean oil values were about 5 euros lower, rapeseed oil up 1.00, and Rotterdam meal mostly 2-7 euros lower from this time previous session. 
  
• China
  cash crush margins were 93 cents on out our calculation (101 previous), compared to 81 last week and 161 year ago.
  

• Malaysian
  palm oil

 

Oilseeds
Export Developments

• The
  Philippines bought 90,000 tons of soybean meal from the US for March 16-April 15 shipment. 
  

 

Wheat

• US
  wheat is
  higher on follow through buying on concerns Black Sea exportable supplies will dry up by early 2021, resulting in business shifting to North America and Australia. 
  
• Russia
  may impose the wheat export tax at around 2,000 rubles ($27.30) per ton for Feb. 15-June 30.  Russia added sugar to the list of possible commodities to restrict. 
  
• Ukraine’s
  economic ministry reported grain exports to date are running 14 percent below year ago level.  69 percent of the wheat export quota has been used up or 12.1 million tons (out of 17.5). 
  
• EU
  March milling wheat was up 2.75 at 207.50 euros.

 

Export
Developments.

• The
  Philippines bought about 100,000 tons of Australian feed wheat (in for 200k) for Feb-Apr shipment at $260 & $265/ton, along with 90,000 tons of soybean meal from the US for March 16-April 15 shipment. 
  
• Jordan
  seeks 120,000 tons of feed barley on December 15 for March-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. 
  

 

Rice/Other

·        
Iraq bought more than 110,000 tons of local rice for consumption. 

·        
Bangladesh seeks 50,000 tons of rice on Dec. 22.  They bought a combined 100,000 tons on Dec. 2 and Nov 26, the country’s first rice purchase in about three years.  Bangladesh plans to import 300,000 tons of rice.