From: Terry Reilly
Sent: Friday, January 10, 2020 8:28:21 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 01/10/20

PDF attached

 

Morning. 
MPOB Malaysian palm S&D was bullish and China CASDE neutral. USDA export sales were flat out poor and one of the worst reports I have seen in a while. USDA weekly export commitments were a marketing year low for wheat, corn, rice, and soybean meal. 

 

 

 

 

 

 

 

 

Reuters
Estimates

 

 

 

 

 

Source:
Reuters and FI

 

Weather

https://www.wpc.ncep.noaa.gov/qpf/p120i.gif?1578664395

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

Weather
conditions in many Brazil and Argentina crop areas will be favorable over the next two weeks, although a close watch on the rain distribution is warranted. A few pockets could be a little too dry. Rio Grande do Sul will get some relief from dryness over the
coming week with northern soybeans benefiting more than southern corn or rice production areas. Paraguay will receive additional rain periodically over the coming week to further improve soil and crop conditions. The same is expected over all neighboring areas.

Parts
of Argentina’s north need timely rainfall and will get some over the coming week to ten days.

            South
Africa summer crop conditions should be largely beneficial over the next couple of weeks. Australia weather will continue hot and too dry for crop changes, although it would not be surprising to see some rain in eastern parts of the nation later this month.

            India’s
winter crops are in very good condition and should remain that way for the next two weeks. Summer crop harvesting in the south will continue around brief periods of rain.

            China
rapeseed conditions will have potential for improvement in the spring after this week’s storm system brought significant moisture to the production region. A follow up storm system will see to it the region is plenty moist in the spring.

            Southern
Europe and the southwestern parts of the CIS will be dry biased for a while, but winter crops are dormant or semi-dormant and will not be bothered. A boost in precipitation will be needed in the late winter prior to the start of spring growth.

            Overall,
weather today will likely provide a mixed influence on market mentality with a slight bearish bias prevailing.

 

MARKET
WEATHER MENTALITY FOR WHEAT: 

Winter
crop conditions around the world are either in fair to good condition or poised for improvement. Recent moisture in the United States will be good for spring crop development. Snow is accumulating in the northwestern U.S. Plains before bitter cold conditions
evolve in the next week to ten days to prevent winterkill.

Portions
of Ukraine, southern Russia and Kazakhstan are still snow free and some winter crops are not well established due to dryness and change is needed by spring to improve crops. 

            There
is no risk of crop threatening cold in Russia, Europe or most of China’s key winter crop production areas for the coming week to ten days. Winter crops are not as well established as they should be in some areas of southeastern Europe locations or in parts
of China, but recent rain and snow in eastern China will see to it that big improvements occur prior to the start of aggressive crop development in the spring.

India’s
winter crops are poised to perform quite well this year and rain in Pakistan Sunday into Monday will improve the outlook there as well.

            Dryness
in northern Africa will be closely monitored with Morocco the only area at risk of lower production today but drying in northwestern Algeria will continue for a while.

            Overall,
weather today will likely produce a mixed influence on market mentality.

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

FRIDAY,
JAN. 10:

  • China
    CASDE
  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, 8:30am
  • USDA’s
    monthly World Agricultural Supply and Demand (WASDE) report, noon
  • Malaysia
    end-2019 palm oil stocks, production, export numbers; Jan. 1-10 palm oil export data from AmSpec, Intertek and SGS
  • U.S.
    winter wheat seeding forecast
  • USDA
    quarterly wheat, barley, corn, soybean stocks, noon
  • 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

MONDAY,
JAN. 13:

  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • EU
    weekly grain, oilseed import and export data
  • Ivory
    Coast cocoa arrivals
  • HOLIDAY:
    Japan

TUESDAY,
JAN. 14:

  • China
    Soybean import data
  • Malaysian
    Cocoa Board releases 4Q 2019 cocoa grinding data
  • EARNINGS:
    Suedzucker, Agrana

WEDNESDAY,
JAN. 15:

  • New
    Zealand Food Prices
  • FranceAgriMer’s
    monthly cereals press conference
  • Intertek,
    AmSpec and SGS release Malaysia’s Jan. 1-15 palm oil shipment data

THURSDAY,
JAN. 16:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, 8:30am
  • Port
    of Rouen data on French grain exports
  • Brazil
    crop agency Conab may release 1st report on 2020 coffee crop, Sao Paulo
  • MPOB
    Palm Oil Review & Outlook Seminar, Kuala Lumpur
  • AB
    Foods trading update

FRIDAY,
JAN. 17:

  • 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
  • European
    cocoa grindings data for Q4 2019
  • Cocoa
    Association of Asia releases 4Q cocoa grinding data

Source:
Bloomberg and FI

 

 

 

 

Bloomberg
Bull/Bear survey

·        
Soybeans: Bullish: 10 Bearish: 9 Neutral: 5

·        
Corn: Bullish: 9 Bearish: 4 Neutral: 11

·        
Wheat: Bullish: 6 Bearish: 10 Neutral: 8

·        
Raw sugar: Bullish: 2 Bearish: 1 Neutral: 4

·        
White sugar: Bullish: 4 Bearish: 0 Neutral: 3

·        
White-sugar premium: Bullish: 5 Bearish: 0 Neutral: 2

 

 

 

 

 

 

 

 

 

Macros.

US
Change In Nonfarm Payrolls Dec: 145K (exp 160K; R prev 256K)

–         
Unemployment Rate Dec: 3.5% (exp 3.5%; prev 3.5%)

US
Average Hourly Earnings (M/M) Dec: 0.1% (exp 0.3%; R prev 0.3%)

–         
Average Hourly Earnings (Y/Y) Dec: 2.9% (exp 3.1%; prev 3.1%)

–         
Labour Force Participation Rate Dec: 63.2% (prev 63.2%)

US
Change In Private Payrolls Dec: 139K (exp 153K; R prev 243K)

–         
Change In Manufacturing Payrolls Dec: -12K (exp 5K; R prev 58K)

Canadian
Net Change In Employment Dec: 35.2K (exp 25.0K; prev -71.2K)

–         
Unemployment Rate Dec: 5.6% (exp 5.8%; prev 5.9%)

–         
Participation Rate Dec: 65.5% (exp 65.6; prev 65.6)

 

 

Corn.

·        
Corn futures are mixed.  USDA export sales were poor. There is no lead from the China CASDE report and South America picked up on light rain.

·        
March corn resistance is seen at $3.8725, then $3.9100. 

·        
We heard South Korea was in for 4 cargoes of corn but saw only one confirmed.

·        
Gold was down about $4.50 as of 8:03 am CT and Dow futures up 33 points. 

·        
USD was 5 points higher as of 8:03 am CT and WTI down 40. 

·        
Traders will be watching the phase one trade signing in Washington next week. 

·        
USDA is set to release their annual crop production report later.  U.S. corn production seen 159m bu lower, yields seen a point lower at 166 bu/acre. Dec. 1 corn stocks seen at 11.47b bu, 465m less than in
Dec. 2018.

·        
Agroconsult sees the 2019-20 Brazil corn area up 2 percent to 17.8 million hectares, and production at 101.6 million tons, down 1.3 percent from previous year. 

 

Export
Developments

  • South
    Korea’s KFA bought 68,000 tons of corn at around $209.95 a ton c&f for arrival around April 5.

    • Thursday:
      South Korea’s NOFI bought 69,000 tons of optional origin corn at $211.95/ton c&f for arrival around April 15. 
    • Thursday:
      South Korea’s FLC bought 66,000 tons of US corn at $207.49/ton c&f for shipment between Jan. 25 and Feb. 25 from the U.S. Pacific Northwest coast. 
    • Wed:
      South Korea’s KOCOPIA bought 60,000 tons of corn at $218.28/ton c&f for arrival in March. 
  • Revised:
    India’s MMTC delayed their import tender for 175,000 tons (50k previously) of non-GMO corn from Jan 7 to January
    14,
    valid until January 22, for shipment by February 10. Another source put shipment by Jan 22. 

 

Soybean
complex
.

·        
Soybeans
are
mixed.  Southern Brazil and parts of Argentina saw rain. China’s CASDE was neutral, MPOB palm data supportive for global vegetable oils, and USDA export sales poor.  CBOT products are slightly higher.