From: Terry Reilly
Sent: Tuesday, January 21, 2020 8:12:50 AM (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. 







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.

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.

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

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.

weather today may provide a bearish bias to market mentality.



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.

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.

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.

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

World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI


Ag Calendar

JAN. 21:

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

JAN. 22:

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

JAN. 23:

  • USDA
    total milk, red meat production, 3pm

JAN. 24:

  • 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)

Bloomberg and FI


changes in CBOT registrations





Commitment of Traders


managers didn’t have large changes from the previous week, but the trade got the fund positions wrong for corn by 19,300 contracts and Chicago wheat by 11,100. Indexes were active in buying corn. 



the SBO net long position is more than 100k long, we remain bearish over the short term if palm oil prices continue to fall.  The net long position in corn has been cut over the recent few trading sessions but created an opportunity for commercials to hedge. 
Look for volatility to increase in corn, soybeans, and soybean oil over the next week.  For wheat, prices will remain sensitive to import tender announcements, and weather if it should turn adverse for North America and Europe. 






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

-New Orders 16.6 (prev 15.7)

-Wage And Benefit Cost Index 49.9 (prev 48.7)

-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 are lower post US holiday in a risk off session.  Traders are awaiting to see is China will buy U.S. grains.

CBOT corn OI was up 32,089 contracts. 

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. 





CBOT soybeans are lower on profit taking, good weather for South America and ongoing uncertainty over China buying US soybeans.  Global markets are under pressure from the spread of a deadly virus in China.
291 cases have been confirmed. 

Soybean oil is down 38-48 points on lower China vegetable oils. 

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 4.2013. 

Offshore values are leading CBOT soybean oil 31 lower and meal $2.00 higher. 

Over a 2-day period, Rotterdam vegetable oils this morning were down 1 euro for nearby soybean oil positions and 7 euros higher for rapeseed oil. Rotterdam meal when imported from SA were mostly higher. 

China cash crush was last 90 cents per bushel, compared to 98 late last week and 36 cents year ago. 


Malaysian palm markets:
this is for a 2-day period.  April was down 15 on Tuesday.

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. 


Export Developments



US wheat is higher in Chicago on light short covering but lower in MN and KC on uncertainty China will buy US high protein wheat. 

European Union wheat exports are running 71% ahead of last season.

March Paris wheat futures were up 1.25 at 197.00 euros as of early this morning, near a one-year high.

Ongoing strikes by French port workers are hindering exports. 

Pakistan’s Economic Coordination Committee (ECC) approved wheat imports of 300,000 tons through March 31, 2020.



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. 




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


Skype: fi.treilly


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