From: Terry Reilly
Sent: Monday, December 30, 2019 2:54:26 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 12/30/19

PDF attached


will be a regular session for CBOT agriculture.  Poor grain inspections sent prices lower while soybean export inspections fell within a range of trade expectations.  China took 281k soybeans. 


net long SBO?….


Refiniv and FI          



Argentina’s dry areas saw much need rain over the weekend, from Buenos Aires to southern Cordoba and northeastern La Pampa and from northern Cordoba to western Santiago del Estero.

Eastern, central and parts of western Kansas as well as western Oklahoma saw good precipitation over the weekend, which was needed.  Far western KS and eastern Colorado picked up on light precipitation and
more is needed to boost soil moisture levels.  The weekend storm was not as heavy as expected in terms of snowfall coverage, so there is still some concern lack of snowfall coverage may leave poorly established HRW wheat across the central US Great Plains
vulnerable to cold snaps.  The central Great Plains will see additional snow events in January. No extreme cold threat is expected through January 6.

Rain and thunderstorms occurred elsewhere in the Midwest

World Weather Inc. and FI


World Weather Inc.


America weather will be mostly good over the next two weeks. Recent rain in the previously dry areas of Argentina is improving recently planted crop emergence and establishment while crops planted earlier in the year likely experienced some stress relief and
this trend may continue for a while as additional showers and thunderstorms occur in many areas. The northeast will be driest

weather will continue favorably mixed, although a close watch on the south is warranted due to net drying over the next ten days. Dryness will have to breakdown later in January to protect production potentials.

the meantime, recent rain in southern Sumatra and western and central Java and has been improving soil moisture for better oil palm production potentials in 2020. The rain must be sustainable over multiple weeks and it looks like that may be the case.

Africa crop weather will remain varied offering some timely rainfall to many areas, but frequent follow up rain will be needed to seriously change crop moisture and development potential. Some areas may not get enough rain to counter evaporation in the next
two weeks while others will.

will get some additional rain in the central and east this week benefiting some summer crops. Timely precipitation has occurred in many other areas and more is expected later in January to support good yields.

crops in China and Europe are semi-dormant and mostly in good shape. Rain in China this winter will help to improve soil moisture for better winter rapeseed establishment prior to reproduction in the spring.

      Late season farming activity in the United States will not advance very well for a while, but that is no change from last week’s weather outlook.

weather today will provide a neutral to slightly bearish bias to market mentality.



in the U.S. hard red winter wheat production region during the weekend bolstered topsoil moisture for improved wheat establishment in the spring. Additional moisture will be needed periodically through the winter to ensure the best crop development potential.

rain in the U.S. Midwest and snow in the southeastern Canada will leave those wheat areas plenty wet for spring fieldwork.

crop conditions in China may improve if precipitation falls as expected this week and next week. The moisture will fall in areas that were a little dry in the autumn. Improvements in wheat establishment prior to reproduction cannot occur until warmer weather
comes along in the spring, but the moisture should still be available to crops unless a warm and dry finish to winter and start to spring takes place.

India wheat production areas will receive some welcome precipitation this week further ensuring high yields this winter.

in Europe and the western CIS are dormant and mostly in fair to good shape. Dryness in the autumn left many crops in southeastern Europe, including Ukraine, and Kazakhstan with poor emergence and establishment. Timely rain and seasonable temperatures will
be needed in the spring. Until then, snow is needed to protect poorly established crops from any harsh or extreme weather that suddenly evolves. There is no threat of damaging cold for the next two weeks

North Africa wheat is in fair to good shape. Crops in southwestern Morocco are not well established and need timely rain in the next few weeks to induce better establishment prior to reproduction.

harvesting was disrupted during the weekend by some rain and additional precipitation periodically into next week will likely perpetuate this concern, although more than 80% of the wheat crop has been harvested. Barley has not been harvested as well.

weather today will likely provide a bearish bias to market weather mentality.

World Weather Inc. and FI


Ag Calendar

Dec. 30:

  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • CFTC
    commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm


  • AmSpec
    releases Malaysia’s Dec. 1-31 palm oil export data, 10pm Monday (11am Kuala Lumpur); SGS data due at 3pm KL

Jan. 1:

  • Nothing
    major scheduled

Jan. 2:

  • Australia
    commodity index
  • USDA
    Soybean crush, DDGS production, corn for ethanol, 3pm

Jan. 3:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, 8:30am
  • EIA
    U.S. weekly ethanol inventories, production, 11am
  • ICE
    Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions ~1:30pm (~6:30pm London)

Bloomberg and FI



inspections versus Reuters trade range                                            

312,017     versus  300000-650000           range

408,946     versus  450000-650000           range

911,482     versus  750000-1300000         range










GRAIN      12/26/2019  12/19/2019  12/27/2018    TO DATE     TO DATE  


0           0           0       16,760        6,191 

408,946     401,894     952,881    8,050,874   17,972,678 

100         100           0          396          218 

0           0           0            0            0 

0           0           0        1,918        1,693 

  0           0           0            0            0 

4,049     157,401      29,769      869,974      458,712 

911,482   1,097,748     756,153   20,719,478   16,627,065 

0           0           0            0            0 

312,017     605,545     380,421   14,497,684   12,677,074 

1,636,594   2,262,688   2,119,224   44,157,084   47,743,631 






Commitment of Traders

As of 12/24/19

The traditional fund net long position in soybean oil continued to take off to the upside while meal continues to struggle. 

Managed money in soybean oil futures and options increased their net long position by 16,080 contracts to 140,752 lots, largest position since November 2016.  The record is 126,543 contracts in early November
2016.  Prices back then were around 37-38 cents/pound. 

For managed money, they added an impressive 46,119 net long contracts, cutting the short position to net 33,888 lots.

Traditional futures only funds bought 20,600 corn, 38,300 soybeans, 7,200 meal, 13,700 soybean oil and sold 11,100 Chicago wheat for the week. 

Open interest in soybeans decreased 37,800 contracts futures and options combined. 

Funds were much more long than expected for corn (by 28,900), soybeans (by 28,200) and soybean oil (16,600). 









Poor USDA export inspections of only 409,000 tons triggered selling in corn during the morning session, creating a two-sided trade. Bear spreading was a feature. 

USDA US corn export inspections as of December 26, 2019 were 408,946 tons, below a range of trade expectations, above 401,894 tons previous week and compares to 952,881 tons year ago. Major countries included
Mexico for 167,153 tons, Japan for 109,072 tons, and Colombia for 69,153 tons.

Profit taking could have been a feature. CBOT corn
a 7-week overnight on trade optimism. 

The northern and parts of the central Great Plains and far northwestern Corn Belt saw a large storm system over the weekend that impacted travel and increased livestock stress, but at the same time provided
beneficial moisture to the growing regions. 

There are conflicting weather forecasts for southern Brazil. Southern Brazil will see drought like conditions through the 10th of January, according to one weather person, stressing corn and soybeans. 
Temperatures will remain hot.  But much of the area will not be completely dry. World Weather indicated “Southern Brazil should get some timely rainfall to prevent dryness from becoming an issue in the next two weeks…All of Brazil will see timely rain, although
Paraguay and southwestern Mato Grosso do Sul will be left in a drying mode this week before relief comes next week.” 

As for yields, we raised our Argentina yield (was low to begin with) to 2.90 tons per hectare. Others are around 3.03 to 3.05 tons.  USDA is using 3.03 versus 3.33 last year. For Brazil, USDA is at 3.33 versus
3.26 last year. Our Brazil production was raised to 123.1 million tons from 121.3 million previously. We think the weather situation improved for Argentina and will not be as bad as some project for southern Brazil. 

USDA radio talked about a recent US ethanol delegation’s trip to Mexico, a market that could be very lucrative for the US.  Related: 
And reading up on US corn S&D:

Speaking of ethanol demand, Brazil ethanol stocks are projected to be very tight despite a record 35 billion liters (9.25 billion gallons) produced during the peak April through mid-December season.  An ethanol
analyst with INTL FCStone doesn’t see a comfortable stock situation to cover seasonal downtime during the mid-December and early April period. Cheaper ethanol in 2019 increased demand for the fuel to record levels.  Are imports from the US likely?  US ethanol
is cheap relative to Brazil.  Spot prices of ethanol in Brazil is pretty firm. 

China will soon release frozen pork, frozen beef and mutton from reserves, and increase imports of pork, all ahead of the China New Year starting January 25.  January through November China’s pork imports
were up 57.9% from a year earlier to 1.7 million tons.

Vietnam’s pig prices declined recently despite ongoing ASF problems. The government had launched several initiatives to drive prices down, including the encouragement to increase slaughter rates to boost the
countries frozen pork supplies.  Vietnam’s General Statistics Office reported the hog population in December declined 26 percent from year ago, largest monthly decline during the span of nine consecutive months of it falling.  ASF was first discovered on Feb.
1 and since then, it led to culling of six million pigs through mid-December. 











CBOT soybean

futures were higher on Monday following good USDA export inspections, strength in soybean oil and ideas China will buy more US soybeans after renewing 10 GMO variety strains and approving 2 new import varieties.  However, China is making a move to approve
GMO seeds for commercial production, which long-term is slightly bearish, assuming the slope of the trend yield increases.  Soybean meal was led higher by weather forecasts calling for colder temperatures through early January and soybean oil was up on sharply
higher Malaysian palm and China vegetable oil futures.  Egypt bought sunflower oil and they paid more than $150/ton more than their last tender back in October. Going home tonight, we think money managers are a record net long 132k soybean oil (F&O).

USDA US soybean export inspections as of December 26, 2019 were 911,482 tons, within a range of trade expectations, below 1,097,748 tons previous week and compares to 756,153 tons year ago. Major countries
included China Main for 280,907 tons, Bangladesh for 112,303 tons, and Mexico for 91,576 tons.

  • China’s
    AgMin will make a monumental move that could change the landscape for the nearby trend in soybean and corn yields.  They plan to issue biosafety certificates for one GMO soybean seed variety and two corn varieties, for commercial production, a signal the country
    turned the page and open the door to boosting crop production.  Rather than become dependent on international research and GMO seed varieties, they spent billions of USD in research over years.  SHZD32-01 soybeans, developed by Shanghai Jiaotong University,
    drew no public objection during a 15-day period.  Dabeinong’s 002385.SZ DBN9936 corn and double-stacked 12-5 corn by Hangzhou Ruifeng Biotech Co Ltd and Zhejiang University may also be approved.
  • China
    also approved two new genetically modified (GM) crops for import and renewed permits for 10 others.  The two news ones were Corteva AgriScience’s CTVA.N DAS-81419-2 soybean and 55-1 papaya by USDA and Hawaii University.
  • Argentina
    producers in in Rosario and Cordoba are staging a protest over export taxes.  This is not expected to impact grain transportation or export flow.

APK-inform reported Ukraine sunflower exports as of late December increased 44% to 1.585 million tons so far this season from 1.099 million during the same period a year ago.


Export Developments

  • USDA
    CCC seeks 14,650 tons of packaged vegetable oils for export to Yemen on January 7 with shipment February 1-29 (Feb. 16-Mar. 15 for plants at ports). 
  • Egypt’s
    GASC bought 10,500 tons of sunflower oil at $857/ton.  They were in for an undetermined amount of vegetable oil for arrival Feb. 5-20 arrival and earlier the lowest offer was $857.00 per ton for 10,500 tons of sunflower oil.  GASC received only one offer for
    soyoil at $908.33 a ton.  Offers per Reuters for cost and freight (C&F) basis:

    • 6,000
      tons of sunflower oil at $862.00
    • 10,500
      tons of sunflower oil at $857.00
    • 15,000
      tons of soyoil at $908.33
    • 11,000
      tons of sunflower oil at $864.33
    • 11,000
      tons of sunflower oil at $880.00




prices have been rallying along with soybeans, but large Canadian supplies have widened the spread against EU rapeseed

Refiniv and FI          


Refiniv and FI          



  • CBOT
    March soybeans are seen in a $9.00-$9.60 range
  • March
    soybean meal $285 (lowered $10) to $310 range
  • March
    soybean oil 33.00-36.00 range
  • Upside
    in oil share is seen limited at 37.5 percent, for the short term.  Eventually it could rally to 38.5-39.0 percent.




Lackluster USDA export inspections created a two-sided trade in US wheat futures. 

started higher on follow through bullish optimism China will buy US wheat in 2020 and rising Black Sea wheat prices, traded mixed after the release of USDA export inspections, and rallied into the close to settle mostly higher.

USDA US all-wheat export inspections as of December 26, 2019 were 312,017 tons, low end a range of trade expectations, below 605,545 tons previous week and compares to 380,421 tons year ago. Major countries
included Indonesia for 74,103 tons, Japan for 55,638 tons, and Korea Rep for 41,085 tons.

Eastern, central and parts of western Kansas as well as western Oklahoma saw good precipitation over the weekend, which was needed.  Far western KS and eastern Colorado picked up on light precipitation and
more is needed to boost soil moisture levels.  The weekend storm was not as heavy as expected in terms of snowfall coverage, so there is still some concern lack of snowfall coverage may leave poorly established HRW wheat across the central US Great Plains
vulnerable to cold snaps.  The central Great Plains will see additional snow events in January. No extreme cold threat is expected through January 6.

EU weekly agriculture trade data will not be released this week. They will resume Monday, January 6.

Russian 12.5% protein wheat from Black Sea January delivery increased $2 per ton to $218according to SovEcon.  IKAR reported unchanged at $218 per ton.

March Paris wheat futures settled unchanged at 189.00 euros.

Will Egypt tender for wheat tonight or Tuesday? Egypt said they have enough strategic reserves of wheat for five months.  I put the odds for a tender at 85 percent. 

Ukraine’s Ministry for Development of Economy, Trade and Agriculture reported grain exports as of late December increased 32.5% to 30 million tons since July 1, fueled by higher corn and wheat exports.  Wheat
export are 4.2 million tons higher to 14.6 million tons.  Ukraine also exported 3.7 million tons of barley and 11.4 million tons of corn.





Chicago wheat

Refiniv and FI          



  • Jordan
    seeks 120,000 tons of wheat on January 7.
  • Morocco
    seeks to import about 355,000 tons of US durum wheat on January 9 for arrival by May 31.
  • Mauritius
    seeks 95,000 tons of optional origin wheat flour on Jan. 10, 2020, for shipment between July 1, 2020, and June 20, 2021. 

Syria seeks 200,000 tons of soft wheat from Russia on January 20, 2020. 



  • Results
    awaited: South Korea is in for 42,222 tons of rice for April-June arrival on Dec 27. Reuters:

of the tender are as follows:


3,000     Milled Long     April 30, 2020/Busan

17,000     Milled Medium   June 30, 2020/Busan

22,222     Brown Medium    June 30, 2020/Busan

  • Syria
    seeks 45,000 tons of white rice on Jan. 6, 2020.  (Reuters) Short grain white rice of third or fourth class was sought. No specific country of origin was specified in the tender, traders said.  Some 25,000 tons was sought for supply 90 days after confirmation
    of the order and 20,000 tons 180 days after supply of the first consignment.  The rice was sought packed in bags and offers should be submitted in euros.  A previous tender from the agency for 45,000 tons of rice with similar conditions had closed on



(high end increased)

CBOT Chicago March wheat is seen in a $5.40-$5.80 range

CBOT KC March wheat is seen in a $4.70-$5.00 range

MN March wheat is seen in a $5.50-$5.75 range

We like KC wheat over Chicago wheat.


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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