From: Terry Reilly
Sent: Thursday, January 02, 2020 8:03:35 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 01/02/20

PDF attached






Soybeans 5-7 higher

Soybean meal: $0.50-$1.50 higher

Soybean oil: 30-40 points higher

Corn: 2-3 higher

Chicago wheat: 3-5 higher




saw much needed rain through Tuesday but turned and will remain drier into the weekend.  There is some opportunity for rain Sunday and early Monday for southern Argentina, but the rest of the country will remain dry through at least Wednesday. 



World Weather Inc.

  • Northern

    is drying out and may experience some crop stress through the coming week

    • Temperatures
      will be quite warm to hot through the weekend with daily highs in the 90s and over 100 degrees Fahrenheit
    • Some
      showers will occur Monday, but rainfall will rarely reach as much as 0.60 inch and most amounts will be too light to counter evaporation
    • Showers
      will return late next week and occur over multiple days bringing the best opportunity for relief
    • Warm
      conditions will continue on the drier days next week
    • The
      bottom line is one of increasing concern over crop conditions, although if rain develops in the January 10-16 period there would likely be some relief to help curb stress and protect production, but rain needs to be significant at that time


  • Southern

    will continue to dry down over the next few days, but rain Saturday night and Sunday will offer some short term relief with rainfall of 0.50 to 2.00 inches occurring from southern Cordoba into Buenos Aries and impacting a few immediate neighboring areas

    • Net
      drying will resume after that and could prevail for a while as rainfall becomes erratic and light
    • Temperatures
      will continue to have a near to above average bias during much of the coming week to ten days keeping evaporation rates high when rain is not falling
    • The
      bottom line should remain favorable for key summer crops from southern Cordoba to Buenos Aires, but areas from northern Cordoba to northern Entre Rios may need greater rain like that of northern Argentina as time moves along


  • Argentina
    rainfall Tuesday and Wednesday

    was quite limited with most of the nation experiencing net drying

    • Temperatures
      were seasonable


  • Northeast

    will experience crop improvements through the weekend and into early next week due to much needed rainfall

    • The
      region has been much too dry in recent weeks and this precipitation will be sufficient to offer some relief, but follow up rain will be very important
    • World
      Weather, Inc. believes the drier bias will return next week and it may prevail in the Jan. 10-16 period.
    • The
      bottom line will be one of temporary improvement with cotton planting and establishment in western Bahia to benefit greatly. Some improvement in coffee, cocoa, corn, soybeans, rice, sugarcane and other crops is expected, but follow up rain will be imperative
      for a more notable improvement in production potential.


  • Southern
    Brazil and Paraguay will dry out through Tuesday

    with slowly increasing showers and thunderstorms during the second half of next week

    • The
      best rainfall will occur at the end of next week
    • Crop
      moisture stress will be significant from southern Paraguay into Rio Grande do Sul and may also impact western Parana, western Santa Catarina and southwestern Mato Grosso do Sul until the latter part of next week due to dryness
    • Relief
      from dryness may occur late next week, but it will be temporary and more drying is expected to follow which will place much pressure on the rain that falls to be sufficient for improved crop conditions and soil moisture to carry crops further into January
      without a threat to production
    • The
      bottom line in southern and southern Paraguay Brazil is one of concern because parts of the region are already dry and warm temperatures coupled with limited rainfall bound to induce some crop moisture stress. Relief late next week of be great importance to
      protect production potentials

World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI


Ag Calendar

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






The People’s Bank of China said they will lower the reserve requirement ratio for all banks by 0.5 percentage point on January 6. This would release more than 800 billion yuan ($114.9 billion) into the financial
system, according to Market Watch.  We view this supportive for both equities and commodities.

U.S. President Donald Trump said he will sign the first phase of a trade deal with China on Jan. 15.

On January 10 USDA will release S&D data and Crop Production.




Opening calls: corn: 2-3 higher

USD was 30 points higher as of 6:49 CT.

Soybean and Corn Advisory predicted that Brazil will overtake the US as the top corn exporter in 2020.

South Korea reported its 56th case of ASF near the North Korean border.

On Wednesday China lowered import tariffs on over 850 commodities, including pork.

China plans to sell 30k frozen pork from reserves on Jan 3.

Baltic Dry index resumed trading and it fell nearly 10.5 percent to 976, or 114 points. 

October US ethanol production ended up at 30.941 million barrels, slightly above expectations and below 32.358 million for October 2018. 








Opening calls: soybeans 5-7 higher, soybean meal $0.50-$1.50 higher and soybean oil 30-40 points higher.

We get NASS US soybean crush later.

CBOT soybean meal registrations were up 200.  FCS issued the 1215 meal that they stopped on Tuesday.

  • October
    US EIA soybean oil for biodiesel production came in well below our expectations at 558 million pounds, well below 699 million in October 2018 and represents a low 50.9 percent of total feedstock used for biodiesel (1.096 billion in October, down from 1.292
    billion year ago). 
  • Rotterdam
    vegetable oils this morning were down 2 euros for nearby soybean oil positions and 7 higher for rapeseed oil. Rotterdam meal when imported from SA were mostly higher. 

Offshore values are leading CBOT soybean oil 86 points higher and meal $1.50 lower.  

China cash crush was last 139 cents per bushel (141 prev.), compared to 131 on Friday and 11 cents year ago. 


3-year high: Malaysian palm markets:


Export Developments





Chicago wheat is expected to open 3-5 cents higher, KC 4-6 higher and MN 4-7 higher.

Global import tender developments remain steady with Turkey seeking high protein wheat.

March Paris wheat futures earlier were up 0.50 at 189.00 euros.

Northeast Ukraine and Russia’s central region and Volga Valley will see snow over the next few days.



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



Details of the new tender are as follows:


        20,000   Brown Medium    Sept.1-Oct.31,2020/Busan

        10,764   Brown Medium    Sept.1-Oct.31,2020/Gwangyang

  • 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
    Nov. 13.


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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