From: Terry Reilly
Sent: Tuesday, January 21, 2020 2:27:35 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 01/21/20

PDF attached


There were no 24-hour announcements this morning.  Soybeans and corn are lower in a risk off session. Chicago wheat getting a little help from higher Paris wheat futures.  Real is weaker and USD is lower. 





Rain is expected to fall more erratically in Brazil and Argentina over the next two weeks which may lead to a few areas of flooding in Minas Gerais and while a few areas in southern Brazil become a little drier biased. Parts of Argentina will also experience some erratic rainfall in the next couple of weeks, but timely rain should occur to prevent dryness from becoming a widespread significant problem.

            In the meantime, South Africa rainfall increased in many areas during the weekend improving topsoil moisture especially in Eastern and Western Cape, Limpopo and northeastern Mpumalanga. Additional rain is expected in the next seven days.

            Rain in eastern Australia improved some of the irrigated summer crops and more rain is expected there over the coming week.

            India’s winter oilseed crop is suspected of being in better than usual condition and China will see improved establishment in the spring when seasonal warming occurs. China’s winter crops were not well-established last autumn but have experienced improved precipitation in recent weeks that will be of use to establishment when it warms up once again.

            Overall, weather today may provide a bearish bias to market mentality.



Little to no winterkill has likely occurred in key wheat production areas in the Northern Hemisphere so far this winter, although a few crops in Montana might have been negatively impacted by recent cold weather.

            In the meantime, India is poised to have a high yielding crop this year. Crops in the Middle East are expected to yield relatively well, and China weather has improved in recent weeks and that should translate into better crop establishment during the spring.

            Southeastern Europe crops are not as well established as they should be, but winter weather has been mild leaving very little threat of crop damage thus far. Much of Russia has snow on the ground, but temperatures there are well above average and expected to stay warm minimizing the threat of winterkill. Some snowmelt is expected in Russia, however.

            Overall, weather today will likely have a neutral to slightly bearish bias on market mentality.

Source: World Weather Inc. and FI


Bloomberg Ag Calendar


  • USDA weekly corn, soybean, wheat export inspections, 11am
  • New Zealand global dairy trade auction


  • USDA monthly cold storage – pork, beef, poultry, 3pm
  • EARNINGS: Barry Callebaut 1Q results


  • USDA total milk, red meat production, 3pm


  • USDA weekly crop net-export sales for corn, soybeans, wheat, 8:30am
  • ICE Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions ~1:30pm (~6:30pm London)
  • CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
  • U.S. poultry slaughter, cattle on feed (25 jan 1.30 am)
  • HOLIDAY: China

Source: Bloomberg and FI


USDA inspections versus Reuters trade range                                            

Wheat       435,129     versus  400000-600000           range

Corn          345,859     versus  450000-800000           range

Soybeans   1,199,136  versus  600000-1200000         range





                  REPORTED IN WEEK ENDING JAN 16, 2020

                            — METRIC TONS —


                                                   CURRENT     PREVIOUS 

             ———– WEEK ENDING ———-  MARKET YEAR  MARKET YEAR

  GRAIN      01/16/2020  01/09/2020  01/17/2019    TO DATE     TO DATE  


BARLEY            318         168         343       17,246        6,534 

CORN          345,859     483,559   1,127,279    9,431,246   20,615,492 

FLAXSEED            0           0           0          396          218 

MIXED               0           0           0            0            0 

OATS               48         100           0        2,066        1,793 

RYE                 0           0           0            0            0 

SORGHUM        18,875      20,319      65,845      976,556      564,622 

SOYBEANS    1,199,136   1,149,404   1,130,306   24,169,056   19,540,223 

SUNFLOWER           0           0           0            0            0 

WHEAT         435,129     560,976     524,942   15,917,942   14,016,732 

Total       1,999,365   2,214,526   2,848,715   50,514,508   54,745,614 







·         Philadelphia Fed Non Manufacturing  Regional Business Activity Index Jan 13.4 (prev 13.2)

o   -New Orders 16.6 (prev 15.7)

o   -Wage And Benefit Cost Index 49.9 (prev 48.7)

o   -Employment 12.5 (prev 20.4)

·         Canada Manufacturing Sales (M/M) Nov -0.6% (est -0.5%; prevR 0.2%; prev -0.7%)



·         Corn futures ended 0.75-1.75 cents lower post US holiday in a risk off session. Traders are awaiting to see is China will buy U.S. grains. There were no USDA 24-hour announcements. 

·         USDA US corn export inspections as of January 16, 2020 were 345,859 tons, below a range of trade expectations, below 483,559 tons previous week and compares to 1,127,279 tons year ago. Major countries included Mexico for 153,277 tons, Colombia for 120,485 tons, and Japan for 40,881 tons.

·         China’s agriculture ministry formally issued biosafety certificates domestic GMO seed corn and soybeans; same varieties announced last month that were pending review. 

·         China’s fertilizer production was up 3.6% year-on-year to 56.249 million tons in 2019.  

·         Ukraine, Germany and China reported bird flu cases over the weekend.  H5N8 and H5N6 (China) bird flu. 

·         China meat importers are looking to renegotiate their contracts for beef imports from Brazil, citing high prices.  Some Chinese importers are refusing to pay for shipments that already arrived.


Export Developments




Updated 1/10/20

  • CBOT March corn is seen in a $3.70 and $4.05 range


Soybean complex.

·         CBOT soybeans traded 9.25-13.75 cents lower (5-week low) on profit taking, good weather for South America and ongoing uncertainty over China buying US soybeans.  Global markets were under pressure from the spread of a deadly virus in China. 291 cases have been confirmed. 2019-nCov is a cousin of SARS.  The coronavirus is renewing fears China may restrict transportation of live birds and seafood.

·         March soybeans ended below its 200-day MA at $9.16/bu. 

·         Soybean meal settled $1.10-$1.50 / short ton lower.   

·         Soybean oil is down 54-60 points on lower China vegetable oils. 

·         USDA US soybean export inspections as of January 16, 2020 were 1,199,136 tons, above a range of trade expectations, above 1,149,404 tons previous week and compares to 1,130,306 tons year ago. Major countries included China Main for 550,677 tons, Bangladesh for 165,179 tons, and Mexico for 133,112 tons.

·         AgRural put Brazil soybean harvesting progress at 1.8 percent complete as of Jan. 16. Widespread rain in the 2-week weather forecast could delay soybean harvesting. 

·         Brazilian real was weaker at 4.2058. 

·         SGS reported Malaysian palm oil Jan. 1-20 exports fell 8.6 percent to 765,801 tons from 837,873 tons previous period last month. 

·         Reuters poll: palm oil prices may increase 17.9% in 2020 on tight supplies, biodiesel program, with average 2020 at 2,650 ringgit/ton. Production of palm was seen at 19.9 million tons for Malaysia and  Indonesia at 45.8 million tons. 


Oilseeds Export Developments



Updated 1/15/20

  • CBOT March soybeans are seen in a $9.00-$9.50 range
  • March soybean meal is seen a $285 and $305 range
  • March soybean oil 32.15-34.50 range



·         Strong global export demand driving up world wheat prices supported CBOT and MN wheat futures.

·         Nearby Chicago wheat hit its highest level since August 2018, and the March contract traded at a premium over May, indicating nearby cash prices are rising and/or demand for wheat is strong over the near term. 

·         March Paris wheat futures settled up 2.50 euros, at 199.25 euros, more than a one-year high. 

·         European Union wheat exports are running 71% ahead of last season at 15.7 million tons. 

·         Ongoing strikes by French port workers are hindering exports.  Port workers returned to work over the weekend but will strike for three days later this week. 

·         Pakistan’s Economic Coordination Committee (ECC) approved wheat imports of 300,000 tons through March 31, 2020. USDA projected nearly no wheat imports in 2019-20. 



Export Developments.

·         Jordan’s state grains buyer bought 60,000 tons of hard milling wheat at $229.90 a ton c&f for shipment in the second half of July.

·         Syria cancelled an import tender for 200,000 tons of soft wheat from Russia.  Syria also passed on 200,000 tons of Russian wheat that was set to close on Dec. 18.

·         Japan’s Ministry of Agriculture seeks 108,296 tons of food-quality wheat on Thursday from the United States and Canada.

·         Algeria’s OAIC seeks at least 50,000 tons of milling wheat on Jan. 21, valid up to Jan. 22, for shipment in two periods, March 1-15 and March 16-31, or earlier if from SA. 





Weekly EU wheat

Source: Reuters and FI


Updated 1/10/20

·        CBOT Chicago March wheat is seen in a $5.40-$5.90 range

·        CBOT KC March wheat is seen in a $4.70-$5.30 range

·        MN March wheat is seen in a $5.40-$5.85 range


Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International │190 S LaSalle St., Suite 410│Chicago, IL  60603

W: 312.604.1366

AIM: fi_treilly

ICE IM:  treilly1

Skype: fi.treilly


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