From: Terry Reilly
Sent: Thursday, January 30, 2020 7:03:48 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 01/30/20
Coronavirus spreading continues to weigh on commodities as more broad-based selling noted. The first person-to-person case in the U.S. was reported today in Chicago.
MARKET WEATHER MENTALITY FOR CORN AND SOYBEANS:
There is still not much reason for concern over Brazil summer crop conditions, but Argentina is still a little worry. Argentina is not likely to see failing rainfall over a large enough area to move markets in a big manner especially not with Brazil’s weather so good.
Weather in eastern Australia improved briefly during the weekend, but this week will trend drier again. More showers are expected next week. South Africa will dry down for a while this week raising some potential for mild crop stress especially in western production areas.
Southeast Asia rainfall will be well mixed and mostly supportive of palm oil development. Rain in China and India will be typical of this time of year with winter crops poised for improvement as spring approaches because of recent past precipitation.
Southeastern Euope remains too dry, but there is potential for some rain and mountain snow this week from there into Kazakhstan possibly easing long term dryness in Romania, the lower Danube River Basin and parts of Ukraine. The moisture boost will be important for spring planting and early season winter rapeseed development.
Overall, weather today will produce a neutral to slightly bearish bias to market mentality.
MARKET WEATHER MENTALITY FOR WHEAT:
There is still no risk of winterkill around the world for the next couple of weeks. That will leave winter crop conditions mostly unchanged. China crops will improve in the spring because of recent precipitation. India’s crops are still expected to yield extremely well.
There is still some concern over Morocco weather and the lack of rain in the southwest may harm production. A few other areas in northern Africa will also need some timely rain in February to protect production potentials.
Middle East wheat conditions are rated favorably, but would benefit from some greater rain. Southeastern Europe, Ukraine, southern Russia and Kazakhstan may get some needed precipitation in the next two weeks to improve soil moisture for spring crop development. Warm weather will continue to minimize the risk of winterkill and some areas may become snow free.
U.S. crops are not likely to experience much change in the next two weeks and the same is true for southeastern Canada.
Overall, weather today will have a neutral bias on market mentality.
Source: World Weather Inc. and FI
- USDA weekly crop net-export sales for corn, soybeans, wheat, 8:30am
- GUS Polish pig population data, Warsaw
- HOLIDAY: China
FRIDAY, JAN. 31:
- 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. agricultural prices paid and received, cattle inventory
- Paris Grain Day conference. Topics include outlook for Black Sea/Europe grains and challenges facing the oilseed market
- AmSpec, Intertek, SGS: Malaysia’s Jan. 1-31 Palm Oil Exports, Kuala Lumpur
Source: Bloomberg and FI
US GDP Annualized (Q/Q) Q4: 2.1% (est 2%, prev 2.1%)
US GDP Price Index Q4: 1.8% (est 1.8%, prev 1.8%)
US Personal Consumption Q4: 1.4% (est 2%, prev 3.2%)
US Core PCE (Q/Q) Q4: 1.3% (est 1.6%, prev 2.1%)
US Initial Jobless Claims: 216K (est 215K, prevR 223K)
US Continuing Claims: 1703K (1730K, prevR 1747K)
Bloomberg Ag Survey from January 29
· Soybeans: Bullish: 7 Bearish: 6 Neutral: 12
· Corn: Bullish: 8 Bearish: 4 Neutral: 13
· Wheat: Bullish: 2 Bearish: 13 Neutral: 10
· Raw sugar: Bullish: 5 Bearish: 0 Neutral: 3
· White sugar: Bullish: 5 Bearish: 0 Neutral: 3
· White-sugar premium: Bullish: 4 Bearish: 0 Neutral: 4
Source: Bloomberg and FI
Source:John Hophins CSSE https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6 site updates frequently
· Technical buying and strong export demand underpinned the corn market helped limit losses.
· USDA export sales were good at 1.235 million tons.
· Argentina’s Bolsa de Cereales reported corn sowing 97% complete on an unchanged 6.3 million hectares for the 2019/2020 corn crop.
- None reported
· There have been no Chinese soybean purchases reported on the USDA 24-hour window since the trade deal was signed on January 15.
· Soymeal and bean oil settled lower following soybeans and grains.