FI Morning Grain Comments 12/15/20

PDF attached

 

Morning. 

 

Lower
trade in the soybean complex and corn from a wetter Brazil weather forecast and slow US soybean & corn export demand, while wheat is higher as traders await results of Egypt’s GASC import tender. 

 

 

 

Weather

In
Argentina, a needed rain event will occur in southern production areas Friday into Saturday. The GFS model may be a little too aggressive with this weather disturbance; however, meaningful moisture is expected which will be beneficial for crops and will at
least temporarily reduce the concerns of dryness in the area.

In
Brazil, conditions will still be favorable for crop development in most of the nation. There will be some areas that could use greater rain in the first week though. Mato Grosso and northern Mato Grosso do sul into Bahia will be notably drier-biased in week
1 of the outlook with any meaningful moisture being localized. Greater rain is then likely in much of this area in week 2, with the exception of northeastern Bahia, and this will help keep concerns low of notable impacts from dryness. The bottom line is good
for crops.

Source:
World Weather Inc. and FI

 

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
261,164                 versus   375000-650000  range

Corn                     
886,938                 versus   725000-1000000                range

Soybeans           
2,368,781             versus   2050000-2650000             range

 

Macros

 

Corn.

• CBOT
  March corn is
  lower from a wetter Brazil weather forecast and lack of fresh news. 
• Ukraine
  union UGA estimated corn exports could fall to 24 million tons in 2020-21 from 30.3 million tons in 2019-20.  Production was estimated between 28 to 30 million tons, down from 35.6 million tons in 2019.
  
• China’s
  Heilongjiang plans to offer 714,516 tons of 2015 corn from state reserves on Thursday.
  
• China
  will offer to sell 20,000 tons of pork sales from reserves on Thursday. 
• Note
  China will start trading hog futures January 8.  Chinese New Year is next week, and traders are hoping China will be buying US corn and other feedgrains ahead of the holiday.  Domestic Chinese pork prices are strengthening ahead of the holiday. 
  
• The
  EPA said they are aiming for Dec. 31 date to propose biofuel blending mandates.  EPA will also aim to finalize the rule Renewable Volume Obligations in June 2021.  The EPA missed the Nov. 30 deadline for issuing the obligations. 
  

• USDA
  US corn export inspections as of December 10, 2020 were 886,938 tons, within a range of trade expectations, above 753,005 tons previous week and compares to 699,697 tons year ago. Major countries included China Main for 352,940 tons, Mexico for 244,536 tons,
  and Japan for 54,307 tons.

 

Soybean
and Corn Advisory:

2020/21
Brazil Corn Estimate Lowered 2.0 mt to 102.0 Million

2020/21
Argentina Corn Estimate Lowered 1.0 mt to 47.0 Million

 

Corn
Export Developments

• None
  reported

 

 

 

Soybean
complex.  

• US
  soybeans, meal and soybean oil are lower from a wetter Brazil weather forecast and slow US soybean export demand.  Ongoing downward revisions to SA production forecasts are limiting losses.  NOPA is due out at 11:00 am CT with November US crush stats.  CBOT
  crush is higher this morning. 
• SBO
  futures should see limited losses going forward if selected countries increase export taxes and feedstock demand for biodiesel production remains robust headed into 2021. 
  
• Argentina
  oilseed workers continued their strike over wage disputes.  Picketers are blocking entrance to terminals at soymeal factories around the Rosario ports hub. 
  
• Russia
  finalized export duties on sunflower oil are 15%, but not less than 135 euros per ton. 
  
• Palm
  oil futures fell 10 ringgits and cash was off $1.50. There are reports Malaysia will impose an export tax on palm oil sometime in January.  Losses were limited on a pickup in Malaysian palm exports over the past five days. 
  
• India
  imported 481,690 tons of palm oil from Indonesia in October from 351,950 tons in September.  AmSpec reported 732,730 tons, up 8.7 percent. 
  
• A
  Reuters NOPA poll calls for the November crush to be reported at 180.0 million bushels, down 2.8% from October (185.3), and soybean oil stocks at 1.548 billion pounds (1.487 end of Oct.). 
  
• Offshore
  values this morning were leading CBOT soybean oil 58 lower and meal $2.90 lower.  
  
• Rotterdam
  soybean oil values were about unchanged, rapeseed oil down 12, and Rotterdam meal 1-7 euros lower from this time previous session. 
  
• China
  cash crush margins were 88 cents on out our calculation (94 previous), compared to 93 last week and 160 year ago.
  

• ITS
  reported Dec 1-15 palm oil exports at 717,660 tons, up 9.8 percent from 653,541 tons during the same period a month ago. Indonesian October palm exports were 3.03 million tons, up 9.5 percent from September. 
  
• Malaysian
  palm oil: 

• USDA
  US soybean export inspections as of December 10, 2020 were 2,368,781 tons, within a range of trade expectations, below 2,585,571 tons previous week and compares to 1,317,564 tons year ago. Major countries included China Main for 1,552,473 tons, Egypt for 103,812
  tons, and Mexico for 102,962 tons.
• The
  European Union reported soybean import licenses since July 1 at 6.625 million tons, below 6.440 million tons a year ago. European Union soybean meal import licenses are running at 8.300 million tons so far for 2020-21, below 8.859 million tons a year ago.
  EU palm oil import licenses are running at 2.743 million tons for 2020-21, above 2.560 million tons a year ago, or up 6 percent.  European Union rapeseed import licenses since July 1 were 3.175 million tons, down 11 percent from 3.569 million tons from the
  same period a year ago.

 

 

Soybean
and Corn Advisory:

2020/21
Brazil Soybean Estimate Unchanged at 130.0 Million Tons

2020/21
Argentina Soybean Estimate Lowered 1.0 mt to 48.0 Million

 

Oilseeds
Export Developments

• None
  reported

 

March
CBOT crush

 

Wheat

• US
  wheat is
  higher on technical buying as traders await Egypt’s GASC import tender results. 
  
• Egypt
  is in for wheat for Feb 1-15 shipment and French wheat was the lowest offer at $269.10/ton.
  
• Russia
  finalized their export tax on wheat and other commodities.  The wheat export tax is 25 euros ($30.40) per ton. If export volumes exceed a quota of 17.5 million tons during the Feb 15-Jun 30 period, the tax for wheat would rise to 50% of the customs price or
  100 euros per ton, whichever is higher. 
• China
  sold 649,373 tons of wheat out of auction from state reserves or 16.1 percent of what was offered at an average price of 2,339 yuan per ton ($357.40/ton). 
  
• EU
  March milling wheat was up 1.50 at 207.75 euros.
• Sudan’s
  acting finance minister mentioned the US committed to providing support for wheat and other commodities over four years as well as for debt relief. (Reuters)
• USDA
  US all-wheat export inspections as of December 10, 2020 were 261,164 tons, below a range of trade expectations, below 536,881 tons previous week and compares to 512,778 tons year ago. Major countries included China Main for 99,749 tons, Indonesia for 75,349
  tons, and Mexico for 14,670 tons.
• The
  European Union granted export licenses for 305,000 tons of soft wheat exports, bringing cumulative 2020-21 soft wheat export commitments to 11.067 MMT, well down from 13.969 million tons committed at this time last year, a 17 percent decrease.  Imports are
  up 8 percent from year ago at 1.161 million tons.

 

Export
Developments.

• Egypt
  is in for wheat for Feb 1-15 shipment and French wheat was the lowest offer at $269.10/ton.
  

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

• Thailand
  bought 62,000 tons of feed wheat for Feb shipment.  Jordan saw 5 offers for 120,000 tons of barley. 
  
• Tunisia
  seeks 117,000 tons of optional origin soft milling wheat, 100,000 tons of durum and 100,000 tons of animal feed barley, on Wednesday, Dec. 16, for Jan 15-Feb 25 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. 
  
• Jordan
  seeks 120,000 tons of wheat on December 23 for Jun-Jul shipment. 
• Bangladesh
  seeks 50,000 tons of milling wheat on December 27. 

 

Rice/Other

·        
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.