From: Terry Reilly
Sent: Tuesday, February 25, 2020 3:49:22 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 02/25/20

PDF attached


Many of the US agriculture markets ended higher despite sharply lower equities and lower crude oil. 





South America weather remains favorable, but there may be a few more concerns today over net drying in Argentina and a wet bias from center south through center west Brazil during the next couple of weeks. No serious weather anomalies are expected in this week, but rain will be needed in Argentina and far southern Brazil during March.

            Southeast Asia weather is quite varied. World Weather, Inc. anticipates an erratic shower and thunderstorm pattern in March supporting early season moisture boosting.

            Winter grain and oilseed crops will remain favorably rated and poised for improvement in the spring in China and southeastern Europe. India’s winter crops are expected to perform well this year because of greater than usual rainfall.

            South Africa will get some timely rainfall along with parts of Australia to maintain a favorable outlook. With that said, eastern Australia production has not improved much, but some sorghum has received supplemental rainfall recently.

            Overall, weather today will likely produce a neutral to slightly bullish bias.



There is still not much risk to winter wheat from adverse weather for a while. Frost and freezes in the southeastern United States likely burned back some new vegetative development, but no permanent harm likely came to the region’s crops. Some additional moisture will fall early this week in the central U.S. Plains, although amounts will be light in same areas that have been drier biased for a while, including western Kansas, eastern Colorado and neighboring areas.

            Russia crops are going to come into spring favorably moist except in the far south where greater rain will be needed. Kazakhstan will also need greater rain in the spring while Ukraine already has enough moisture to induce some improvement just as soon as seasonal warming arrives.

            North Africa’s outlook has not changed for Morocco, but there is a little more rain slated for Tunisia and northeastern Algeria over the next two weeks. No general soaking of rain is expected, but any showers would be welcome.

            Australia’s winter small grains will not be planted prior to late April which leaves plenty of time for improved weather and soil conditions.

            India’s wetter outlook over the next two weeks will further ensure a significantly large-sized winter crop.

            France and Spain need to warm up along with Italy to support spring planting and to stimulate early season crop development when weather conditions improve.

            Overall, weather today will likely maintain a neutral environment for wheat trading.

Source: World Weather Inc. and FI


Bloomberg Ag Calendar


  • EIA U.S. weekly ethanol inventories, production, 10:30am (26 feb 2100)


  • USDA weekly crop net-export sales for corn, soybeans, wheat, 8:30am
  • Port of Rouen data on French grain exports
  • International Grains Council monthly market report


  • 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
  • FranceAgriMer weekly update on crop conditions
  • U.S. agricultural prices paid, received, 3pm
  • AmSpec, Intertek, SGS palm oil export data for Feb. 1-28
  • EARNINGS: Olam, Golden Agri, Sime Darby

Source: Bloomberg and FI



·         US Philadelphia Fed Non-Manufacturing Firm-Level Business Activity Feb: 36.1 (prev 23.5)



·         May corn traded in a tight trading range, ending 0.25 cent higher at $3.7650. South Korea was busy again buying corn, wheat and searching for soybean meal.  We estimate SK bought at least six cargos of corn so far this week.  Funds were even in corn today. 

·         Crude oil was down nearly $1.65/barrel as of 3:00 CT.  

·         China looks to sell 20,000 tons of pork from reserves on February 27. 

·         South Africa will release its initial estimate for corn production on Wednesday and a Reuters poll looks for 14.504 million tons, up from 11.259 million tons in 2019. 7.99 million was estimated for white and 6.52 million for yellow. 

·         USDA reported end of January pork inventories in cold storage at 625.2 million pounds, above 562.7 million pounds at the end of January 2019.  Pork bellies at the end of January were 70.872 million pounds, above 53.736 million pounds at the end of January 2019.  Bellies at the end of Jan are highest level for any month since the end of May 2016. For the month of Jan, they are highest level since 2014.  See attached charts. 

·         A Bloomberg poll looks for weekly US ethanol production to be up 1,000 at 1.041 million barrels from the previous week and stocks to decrease 5,000 barrels to 24.776 million.  


Export Developments

·         South Korea’s FLC group bought 65,000 tons of optional origin corn (“private deal”) at around $207.99 a ton c&f shipment around LH May to early June. This could be from the US.  Yesterday they paid $215.00 for 65k arrival around June 30.

·         South Korea’s KOCOPIA group bought 60,000 tons of US corn at around $219.98 a ton c&f for FH 2020 arrival.

·         South Korea’s NOFI group bought 69,000 tons of optional origin corn (in for 138k) at around $208.95 a ton c&f for arrival around June 30.

·         South Korea’s KFA group bought 54,000 tons of optional origin corn at around $208.95 a ton c&f for arrival around June 20.  Yesterday they paid $210.20 for 65k for arrival around June 25. 




Updated 2/24/20


Soybean complex.

·         There was a rumor Argentina may increase grain and oilseed export taxes by 3 percent, which is unfavorable for producers that reside in the northern growing areas. Argentina was closed for holiday today.  Much of Brazil was also on holiday. 

·         China buying of SA soybeans slowed Monday as the markets sold off.  There were rumors China was in for a couple Brazilian boats, but nothing was confirmed.  They may have also been in for an Argentina cargo for June shipment on Tuesday. 

·         The Canadian canola crush in January was reported at 855,000 tons, up from 830,000 tons in January 2019.  August through January canola crush is up 7 percent from the same period a year ago.  Part of the reason is lack of China buying. 

·         Argentina January soybean crush during January was 2.32 million tons, below 2.50 million tons for January 2019. 

·         January Indonesia biodiesel consumption was 706,176 kiloliters, about 35 percent above the 2019 monthly average.  In 2019, Indonesia consumed 6.26 million kiloliters of biodiesel. 

·         Malaysian palm markets traded to its lowest since late October 2019

·         Cargo surveyor SGS reported month to date February 25 Malaysian palm exports at 970,094 tons, 45,132 tons below the same period a month ago or down 4.4%, and 151,834 tons below the same period a year ago or down 13.5%.  AmSpec reported exports at 981,073 tons from 1,011,515 tons shipped during Jan 1-25.  ITS reported a 5 percent decline to 970,764 tons from 1,022,023 tons month earlier.


Oilseeds Export Developments

  • South Korea’s NOFI group passed on 60,000 tons of soybean meal for arrival around September 5. 


Selected vegetable oil markets versus Brent

Source: Reuters and FI


Updated 2/24/20

  • May soybeans are seen in a wide $8.65-$9.15 range.
  • May meal is seen in a $280 to $3.05 range
  • May soybean oil range is 28.50 to 31.50 (lowered 50 & 75)



·         US wheat futures started lower but turned higher.  Bull spreading led to a higher close in Chicago May futures by 2.25 cents.  May KC wheat finished 2.75 cents higher and May MN ended 2.00 cents higher. 

·         The strength in US wheat was due in part to technical buying after wheat futures traded four consecutive days lower. 

·         Funds bought an estimated net 5,000 Chicago wheat contracts. 

·         US selected state combined good/excellent winter wheat ratings:  (see Reuters table for other states attached)

o   Texas 31 vs. 35 last week and 31 at the end of November

o   Oklahoma 46 versus 36 at the end of January and 52 percent at the end of November

  • Canadian wheat and canola movement along rail lines are expected to increase after Canadian police started breaking up blockades that were put up in part to protest a new pipeline.  The blockade in Tyendinaga, Ontario was put up February 6 and effectively cut off cross-country train routes. 

·         Ukraine began planting 2020 spring grains.  A senior weather official projected good weather.  Ukraine harvested a record 75.1 million tons of grain in 2019, up from 70 million tons in 2018.  Yesterday Ukraine’s Deputy Minister projected the Ukraine grain harvest in 2020 to fall to 65-70 million tons from record 75.1 million tons in 2019. 


Export Developments.

  • Jordan bought 60,000 tons of hard wheat at $221.25/ton c&f for first half September shipment.
  • Tunisia’s bought 125,000 tons of optional origin soft milling wheat for shipment between March 15 and May 25.  Lowest offer was $232.92/ton c&f. 

·         South Korea’s NOFI group bought 60,000 tons of optional feed wheat at around $238.82 a ton c&f for arrival around July 20.

  • Jordan issued a new import tender for 120,000 tons of feed barley set to close February 26 for June-July shipment. 
  • Japan in an SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of feed barley for arrival in Japan by July 30, on Feb. 26. 
  • Bangladesh seeks 50,000 tons of wheat by February 27. 
  • Morocco seeks 354,000 tons of US durum wheat on March 5 for arrival by May 31.



  • The Philippines canceled unused import permit for up to 1 million tons of rice. 


Updated 2/24/20

·        CBOT Chicago May wheat is seen in a $5.15-$5.80 range

·        CBOT KC May wheat is seen in a $4.45-$4.95 range

·        MN May wheat is seen in a $5.05-$5.55 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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