FI Morning Grain Comments 12/23/20

PDF attached

 

Morning. 

 

 

Soybeans
and corn are higher on ongoing Argentina strike problems and poor weather forecast.  Wheat turned sharply higher on fund buying.  USD was down 23 points and WTI crude up $0.05/barrel as of 7:50 am CT.  Option trading was active overnight. 

 

Argentina
was dry Tuesday into Wednesday and the morning weather forecast was wetter for next week, but the current patter calling for light rain across northern Cordoba and northwest Santa Fe Friday into Saturday maybe erratic.  Brazil was unchanged. Brazil will see
rain favor the northern areas through this weekend. 

 

 

Weather

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

Argentina’s
wetter outlook today may attempt to produce a little bearishness in market mentality, although looking at early morning market activity there does not seem to be much interest. Brazil’s forecast has not changed and a classic La Nina weather pattern is expected
over the next couple of weeks favoring abundant rain in center west and center south crop areas while the far south and extreme northeast experience more likely rainfall. Argentina’s weather bias will be dry through Friday and then increasing shower and thunderstorm
activity will occur in the west this weekend with some of that rain spreading to the east next week. The higher humidity in Argentina and sporadic shower activity will help keep temperatures down a little more than previously expected and will provide enough
moisture to keep crops viable while waiting for greater rain.

            South
Africa weather will be mostly good for summer crops, but there will be some pockets of dryness. Indonesia and Malaysia weather will also continue erratic and light in portions of the nation through the weekend with improving rainfall after that.

            China’s
winter rapeseed will be dormant and plenty moist this week. Weather in India will be good for most of its winter crops as well as for late summer crop harvest progress. Central and interior northern India may get some rain in the first days of January.

           
Overall, weather is expected to provide a mixed influence on market mentality with a slight bearish bias.

 

MARKET
WEATHER MENTALITY FOR WHEAT:  Bitter cold air moving southward into the central U.S. Plains and Midwest today will not likely bring a threat of winterkill to wheat production areas. However, some single digit readings may occur in parts of Nebraska and a few
northern wheat production areas in the Midwest. Snow will protect wheat in Nebraska while most of the temperatures in the lower Midwest will not be cold enough to bring a threat of damage.

            Next
week’s storm in the central United States will bring some snow and rain to hard red winter wheat areas, but most of the west-central and southwestern crop areas will be missed by the most significant precipitation.

            Northern
portions of Russia’s Southern Region and Ukraine crops will benefit from periods of snow and rain through the weekend, although the benefit will not be noted until spring. Any boost in snow cover will help protect winter crops, although there is no risk of
crop damaging cold. Drier and warmer conditions will evolve next week.

            Winter
crops in Europe, China and India are mostly in favorable condition. Recent weeks of moisture improvement will help many of the winter grains in these areas experience better root and tiller systems in early spring. Central and interior northern India may get
some beneficial moisture in the first days of January.

           
Morocco still needs significant moisture especially in the southwest. A part of northwestern Algeria and a few far northeastern Morocco areas also need greater precipitation, but not much is coming this week. Some boost in precipitation might also be welcome
in the Middle East.

            Australia’s
late season harvest in the southeast will advance around brief bouts of rain. None of the unharvested crop will be vulnerable to a notably change in grain quality.

            Argentina’s
limited rain in wheat areas through Saturday will be good for ongoing harvest progress. Rain next week will slow some fieldwork, but no harm to crop quality is likely.

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

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

Wednesday,
Dec. 23:

• China
  customs publishes data on imports of corn, wheat, sugar and cotton
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• USDA
  hogs and pigs inventory, red meat production, 3pm

Thursday,
Dec. 24:

• Port
  of Rouen data on French grain exports

Friday,
Dec. 25:

• Christmas
  Day
• NOTE:
  Commitments of Traders reports for both ICE Futures Europe and CFTC will be delayed to Monday, Dec. 28
• China
  customs publishes country-wise soybean and pork import data

Source:
Bloomberg and FI

 

 

 

 

USDA
Export Sales

China
was very quiet in buying US agriculture goods for the week ending December 17. 

·        
US soybean export sales were reported at a marketing year low 352,800 tons. It included China but a chink of it was switched from unknown.  (526,400 MT, including 396,000 MT switched
from unknown destinations and decreases of 6,900 MT)

·        
Soybean oil sales were 20,900 tons and meal at 223,700 tons.  Soybean meal shipments were a good 314,100 tons and 23,600 tons of soybean oil were shipped. 

·        
US corn export sales were 651,100 tons. 

·        
Pork sales were 16,300 tons. 

·        
US all-wheat export sales were 393,700 tons and new-crop 24,000 tons. 

 

 

 

 

Macros

US
Initial Jobless Claims: 803K (est 885K, prev 885K) 

US
Continuing Claims: 5.337Mln (est 5.558Mln, prev 5.508Mln)

US
Core PCE Price Index (M/M) Nov: 0.0% (est 0.1%, prev 0.0%) 

 

US
Core PCE Price Index (Y/Y) Nov: -0.4% (est 1.5%, prev 1.4%)

US
Consumption Adjusted (M/M) Nov: -0.4% (est -0.2%, prevR 0.3%)

US
Personal Income (M/M) Nov: -1.1% (est -0.3%, prevR -0.6%) 

US
Consumption Adjusted (M/M) Nov: -0.4% (prevR 0.3 %)

 

 

Corn.

• March
  corn hit a new contract high again overnight, and prices are higher for the ninth consecutive session.  Higher soybeans are supporting prices. 
  
• China
  corn imports through November hit 9 million tons (Jan-Nov) after importing 1.23 million tons last month. 
  

• Anec
  sees December corn exports at 4.423 million tons. 
• A
  Bloomberg poll calls for weekly ethanol production to end up around 959,000 barrels, up 2,000 from the previous week, and stocks to end up near 23.094 million barrels from 22.950 million previous week.
  

 

Corn
Export Developments

• Qatar
  seeks 100,000 tons of bulk barley on January 12.

• Qatar
  seeks 640,000 cartons of corn oil on January 12.

 

 

 

Soybean
complex.  

• CBOT
  soybeans hit a 6-1/2 year high on poor Argentina weather and ongoing Argentina strike.  The strike is nearly two-weeks old.  Soybean meal and soybean oil were up sharply. 
  
• European
  meal and vegetable oil prices were higher from yesterday.  Malaysian palm futures were sharply higher by 123 points (settle for March) and cash rose $21.50/ton to $910.00.  China soybean, meal and oil futures were slightly higher. 
  
• We
  heard China bought 4-5 US and Brazilian cargoes on Tuesday. 
• Yesterday
  Brazil’s Aprosoja cut Brazil’s 2020/2021 soybean crop to 127 million tons from 129 million tons previously. They cited recent dryness as the driver in the cuts.  
  
• Offshore
  values this morning were leading CBOT soybean oil 6 points higher and meal $1.90 higher.  
  
• Rotterdam
  soybean oil values were about up 10-17 euros, rapeseed oil 5 higher, and Rotterdam meal 4-10 euros higher from this time previous session. 
  
• Malaysian
  palm oil:  Cash up 2.4%.  Strength in soybean oil part of the reason for the rally.
  

• China
  cash crush margins were 119 cents on our calculation (119 previous), compared to 123 last week and 131 year ago.
  

 

Oilseeds
Export Developments

• None
  reported

 

Wheat

• Wheat
  turned sharply higher near the end of the overnight trading session on higher soybeans and lower USD. 
  
• EU
  March milling wheat was up 1.50 at 210.50 euros.
• Russia
  exported 29 million tons of grain since July 1, including 24 million tons oof wheat, according to Grain Exporters Union. 
  
• Ukraine
  grain exports season to date are running 16 percent below same period year ago at 24.76 million tons.  This included 8.34 million tons of corn, 3.75 million tons of barley and 12.29 million tons of wheat.
  

 

Export
Developments.

• Bangladesh
  floated an imported tender for 50,000 tons of wheat, set to close Jan 4. 
• 3
  participants: Jordan issued a new import tender for 120,000 tons of animal feed barley, set to close Dec. 29 for shipment during the April 1-15, April 16-30, May 1-15 and May 16-31 periods. 
  
• Jordan
  seeks 120,000 tons of wheat on December 23 for Jun-Jul shipment. 

 

Rice/Other

• Results
  awaited:  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.
• 12/21. 
  Bangladesh seeks another 50,000 tons of rice on Dec. 30. 

 

 

 

Export Sales Highlights  

This
summary is based on reports from exporters for the period December 11-17, 2020.

Wheat:  Net sales of 393,700
metric tons (MT) for 2020/2021 were down 27 percent from the previous week and 34 percent from the prior 4-week average.  Increases primarily for Nigeria (102,000 MT), Mexico (70,200 MT, including decreases of 200 MT), Indonesia (60,000 MT), South Korea (57,000
MT, including 55,000 MT switched from unknown destinations), and Japan (52,900 MT), were offset by reductions primarily for unknown destinations (17,300 MT).  For 2021/2022, total net sales of 24,000 MT were for Peru.  Exports of 366,300 MT were up 54 percent
from the previous week, but down 8 percent from the prior 4-week average.  The destinations were primarily to Mexico (80,700 MT), China (63,000 MT, including 31,500 MT late–see below), South Korea (57,000 MT), Taiwan (49,100 MT), and Japan (30,300 MT). 

 Optional Origin Sales:  For 2020/2021, the current outstanding balance of 10,000 MT, all Spain.

 Late Reporting: For 2020/2021, exports totaling 43,100 MT were reported late for China (31,500 MT) and the Dominican Republic (11,600 MT).

Corn:  Net sales of 651,100 MT for 2020/2021–a marketing-year
low–were down 66 percent from the previous week and 59 percent from the prior 4-week average.  Increases were primarily for unknown destinations (181,600 MT), Guatemala (99,800 MT, including decreases of 1,600 MT), Japan (87,200 MT, including 79,200 MT switched
from unknown destinations and decreases of 300 MT), Egypt (60,000 MT), and Canada (42,600 MT).  Exports of 835,700 MT were down 13 percent from the previous week and 8 percent from the prior 4-week average.  The destinations were primarily to China (271,900
MT), Japan (260,800 MT), Mexico (178,500 MT, including 36,300 late–see below), Panama (30,700 MT, including 20,800 late–see below), and Taiwan (26,500 MT). 

Optional Origin Sales:  For 2020/2021, the current outstanding
balance of 1,647,400 MT is for South Korea (903,000 MT), unknown destinations (224,000 MT), Taiwan (205,000 MT), Vietnam (130,000 MT), China (65,000 MT), Ukraine (62,400 MT), and Japan (58,000 MT). 

Late Reporting: For 2020/2021, exports totaling 71,500
MT were reported late for Mexico (36,300 MT), Panama (20,800 MT), and Jamaica (14,400 MT). 

Barley:  No net sales were reported for the week.  Exports
of 1,000 MT were to Japan (700 MT) and Taiwan (300 MT).

Sorghum:  Net sales of 64,300
MT for 2020/2021 were down 80 percent from the previous week and 75 percent from the prior 4-week average.  Increases reported for China (64,400 MT, including 68,000 MT switched from unknown destinations and decreases of 6,500 MT), were offset by reductions
for Mexico (100 MT).  For 2021/2022, total net sales reductions of 68,000 MT were for unknown destinations.  Exports of 130,600 MT were down 60 percent from the previous week and 22 percent from the prior 4-week average.  The destination was China.

 Rice:  Net sales of 111,500 MT for 2020/2021 were down 33 percent from the previous week, but up 19 percent from the prior 4-week average.  Increases
primarily for South Korea (45,700 MT), Mexico (35,500 MT, including decreases of 1,200 MT), the Dominican Republic (8,600 MT, including decreases of 400 MT), the United Kingdom (8,200 MT), and Ghana (4,000 MT), were offset by reductions for Liberia (200 MT)
and Haiti (200 MT).  Exports of 78,600 MT were down 47 percent from the previous week and 30 percent from the prior 4-week average.  The destinations were primarily to Japan (27,600 MT), Nicaragua (24,300 MT), Haiti (7,300 MT), Mexico (4,900 MT), and Jordan
(3,500 MT).

 Exports for Own Account:  For 2020/2021, new exports for own account totaling 100 MT were to Canada.  The current exports for own account outstanding
balance is 100 MT, all Canada.

Soybeans:  Net sales of 352,800 MT for 2020/2021–a marketing-year
low–were down 62 percent from the previous week and 47 percent from the prior 4-week average.  Increases primarily for China (526,400 MT, including 396,000 MT switched from unknown destinations and decreases of 6,900 MT), the Netherlands (139,000 MT, including
138,000 MT switched from unknown destinations and decreases of 6,400 MT), Egypt (95,700 MT, including 70,800 MT switched from unknown destinations and 13,800 MT switched from Canada), Japan (75,000 MT, including 67,300 MT switched from unknown destinations
and decreases of 2,800 MT), and Spain (71,800 MT, including 65,000 MT switched from unknown destinations), were offset by reductions primarily for unknown destinations (791,300 MT).  For 2021/2022, total net sales of 165,000 MT were for unknown destinations.  Exports
of 2,518,400 MT were down 3 percent from the previous week and 1 percent from the prior 4-week average.  The destinations were primarily to China (1,374,600 MT, including 69,100 late–see below), Egypt (192,700 MT), Mexico (147,600 MT), the Netherlands (139,000
MT), and Japan (134,000 MT). 

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

Exports for Own Account:  For 2020/2021, the current exports
for own account outstanding balance is 74,000 MT, all Canada. Late Reporting: For 2020/2021, exports totaling 69,100 MT were reported late China.  Export Adjustments:  Accumulated exports of soybeans to the Netherlands
were adjusted down 23,331 MT for week ending December 3, 2020.  The correct destination for these shipments is Germany and is included in this week’s report.

Soybean Cake and Meal:  Net sales of 223,700 MT for 2020/2021
resulting in increases primarily for the Philippines (51,300 MT), Guatemala (50,700 MT), Canada (35,200 MT, including decreases of 600 MT), Mexico (34,100 MT, including decreases of 9,400 MT), and Peru (18,000 MT), were offset by reductions primarily for El
Salvador (6,000 MT), Thailand (3,200 MT), and Belgium (2,200 MT).  Exports of 314,100 MT were up 31 percent from the previous week and 32 percent from the prior 4-week average.  The destinations were primarily to the Philippines (91,400 MT), Bangladesh (49,500
MT), Honduras (36,300 MT), Venezuela (25,100 MT), and Mexico (22,800 MT).

Soybean Oil:  Net sales of 20,900 MT for 2020/2021 primarily
for Peru (11,500 MT), Venezuela (4,000 MT), unknown destinations (4,000 MT), South Korea (1,000 MT), and Colombia (1,000 MT), were offset by reductions for Canada (700 MT).  Exports of 23,600 MT were primarily to South Korea (17,500 MT), Venezuela (5,500 MT),
Canada (300 MT), and Mexico (200 MT).

Cotton:  Net
sales of 416,700 RB for 2020/2021 were down 1 percent from the previous week, but up 14 percent from the prior 4-week average.  Increases primarily for China (185,600 RB, including decreases of 13,500 RB), Vietnam (108,400 RB), Pakistan (52,000 RB), El Salvador
(17,200 RB), and Turkey (14,800 RB), were offset by reductions primarily for Mexico (10,500 RB).  For 2021/2022, net sales of 67,100 RB were primarily for El Salvador (21,600 RB), Honduras (15,000 RB), China (13,200 RB), and Turkey (9,200 RB).  Exports of
281,200 RB were up 12 percent from the previous week and 20 percent from the prior 4-week average.  Exports were primarily to China (156,200 RB), Pakistan (30,900 RB), Vietnam (24,000 RB), Mexico (16,800 RB), and Turkey (14,300 RB).  Net sales of Pima totaling
30,900 RB were up noticeably from the previous week and from the prior 4-week average.  Increases were primarily for India (9,200 RB), China (8,700 RB), Pakistan (3,700 RB), Egypt (2,700 RB), and Vietnam (2,600 RB).  Exports of 13,900 RB were down 40 percent
from the previous week and 44 percent from the prior 4-week average.  The destinations were primarily to India (5,600 RB), China (3,700 RB), Peru (2,000 RB), Vietnam (900 RB), and El Salvador (600 RB). 

 Exports for Own Account:  For 2020/2021, exports for own
account totaling 15,900 RB to China (14,600 RB), Bangladesh (1,000 RB), and Indonesia (300 RB) were applied to new or outstanding sales.  The current exports for own account outstanding balance of 18,600 RB is for China (2,700 RB).

Hides and Skins:  Net
sales of 265,800 pieces for 2020 were up 37 percent from the previous week, but down 8 percent from the prior 4-week average.  Increases primarily for China (168,900 whole cattle hides, including decreases of 6,900 pieces), Mexico (44,000 whole cattle hides,
including decreases of 2,900 pieces), South Korea (30,000 whole cattle hides, including decreases of 3,000 pieces), and Brazil (11,400 whole cattle hides, including decreases of 300 pieces), were offset by reductions for Taiwan (700 pieces).  Additionally,
total net sales of 5,600 whole calf skins were for Italy and net sales reductions of 100 kip skins were for Belgium.  For 2021, net sales of 131,300 pieces were reported for China (59,800 whole cattle hides), Mexico (52,800 whole cattle hides), South Korea
(9,600 whole cattle hides), and Taiwan (9,100 whole cattle hides).  Also, net sales reductions of 5,600 whole calf skins were reported for Italy.  Exports of 360,600 pieces reported for 2020 were up 2 percent from the previous week and 4 percent from the prior
4-week average.  Whole cattle hides exports were primarily to China (255,100 pieces), South Korea (51,700 pieces), Mexico (30,500 pieces), Brazil (8,900 pieces), and Taiwan (4,700 pieces).  Additionally, exports of 4,500 kip skins were reported to China (1,900
kip skins), India (1,300 kip skins), and Belgium (1,300 kip skins). 

Net sales of 25,200 wet blues
for 2020 were down noticeably from the previous week and down 73 percent from the prior 4-week average.  Increases primarily for Italy (13,300 unsplit, including decreases of 26,300 unsplit), China (5,800 unsplit), and Brazil (5,400 unsplit, including decreases
of 300 unsplit), were offset by reductions primarily for Vietnam (100 unsplit).  For 2021, net sales of 71,000 wet blues primarily for Italy (69,800 unsplit), Vietnam (1,600 unsplit), and Hong Kong (1,500 unsplit), were offset by reductions for Brazil (1,500
unsplit) and China (1,200 unsplit).  Exports of 88,200 wet blues for 2020 were down 40 percent from the previous week and 16 percent from the prior 4-week average.  The destinations were primarily to Italy (20,000 unsplit and 3,800 grain splits), China (19,700
unsplit), Vietnam (19,500 unsplit), Brazil (9,700 unsplit), and Thailand (9,500 unsplit).  Net sales of 402,600 splits for Vietnam (360,000 pounds) and Italy (48,000 pounds), were offset by reductions for Taiwan (5,300 pounds).  For 2021, net sales of 180,700
splits were reported for Vietnam (172,800 pounds) and China (7,900 pounds).  Exports of 237,700 pounds were to Vietnam (200,000 pounds) and Taiwan (37,700 pounds).

 

Beef:  Net
sales of 6,000 MT reported for 2020 were down 40 percent from the previous week, but up noticeably from the prior 4-week average.  Increases were primarily for Japan (2,000 MT, including decreases of 400 MT), South Korea (1,900 MT, including decreases of 700
MT), Mexico (600 MT, including decreases of 100 MT), Canada (400 MT, including decreases of 100 MT), and Hong Kong (400 MT, including decreases of 400 MT).  For 2021, net sales of 7,200 MT were primarily for South Korea (3,100 MT), Hong Kong (2,100 MT), Japan
(700 MT), Mexico (500 MT), and Taiwan (300 MT).  Exports of 13,500 MT were down 30 percent from the previous week and 27 percent from the prior 4-week average.  The destinations were primarily to South Korea (3,700 MT), Japan (3,300 MT), Mexico (1,900 MT),
Hong Kong (1,500 MT), and Canada (800 MT). 

 

Pork:  Net sales of 16,300 MT
reported for 2020 were down 59 percent from the previous week and 44 percent from the prior 4-week average.  Increases primarily for Mexico (17,000 MT, including decreases of 1,000 MT), Japan (2,300 MT, including decreases of 2,000 MT), Canada (1,500 MT, including
decreases of 500 MT), the Philippines (900 MT, including decreases of 200 MT), and Guatemala (900 MT), were offset by reductions primarily for China (6,100 MT) and South Korea (1,800 MT).  For 2021, net sales of 23,400 MT were primarily for China (7,700 MT),
South Korea (3,900 MT), Colombia (3,50 MT), Japan (1,400 MT), and the Philippines (1,400 MT).  Exports of 40,500 MT were down 4 percent from the previous week, but up 2 percent from the prior 4-week average.  The destinations were primarily to Mexico (14,400
MT), China (13,100 MT), Japan (3,200 MT), South Korea (2,600 MT), and Canada (1,700 MT).

 

U.S. EXPORT SALES FOR WEEK ENDING 12/17/2020 

 

	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	172.4	1,660.9	1,489.2	156.4	5,407.7	5,312.1	0.0	22.0
SRW	67.4	496.2	557.7	9.6	1,038.0	1,523.3	24.0	145.0
HRS	77.4	1,595.7	1,385.5	76.9	3,922.5	3,820.7	0.0	45.0
WHITE	78.5	2,632.7	1,103.9	95.1	2,699.4	2,581.9	0.0	20.0
DURUM	-2.1	128.1	195.6	28.4	461.5	571.5	0.0	0.0
TOTAL	393.7	6,513.5	4,731.9	366.3	13,529.0	13,809.4	24.0	232.0
BARLEY	0.0	15.0	31.5	1.0	15.5	27.4	0.0	12.5
CORN	651.1	29,342.1	9,895.6	835.7	12,888.9	7,927.6	0.0	757.0
SORGHUM	64.3	3,305.9	593.5	130.6	1,738.0	493.4	-68.0	327.0
SOYBEANS	352.8	19,256.1	9,316.9	2,518.4	34,902.2	19,768.5	165.0	496.0
SOY MEAL	223.7	3,062.7	3,022.0	314.1	2,687.0	2,421.9	0.0	18.2
SOY OIL	20.9	246.1	186.7	23.6	180.7	240.9	0.0	0.6
RICE
L G RGH	36.2	272.9	328.5	28.5	687.1	618.4	0.0	0.0
M S RGH	0.0	17.3	15.4	1.0	11.6	15.4	0.0	0.0
L G BRN	8.2	10.9	22.4	1.3	20.6	17.8	0.0	0.0
M&S BR	44.6	61.3	52.2	0.4	33.9	6.8	0.0	0.0
L G MLD	12.5	88.8	193.4	10.5	229.5	444.2	0.0	0.0
M S MLD	10.1	181.5	150.6	37.0	187.0	239.0	0.0	0.0
TOTAL	111.5	632.7	762.5	78.6	1,169.8	1,341.6	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	416.7	6,118.9	7,527.3	281.2	4,987.8	3,700.9	67.1	780.8
PIMA	30.9	223.9	172.5	13.9	314.5	160.8	0.0	0.7