From: Terry Reilly
Sent: Wednesday, January 22, 2020 8:09:23 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 01/22/20

PDF attached








is expected to fall more erratically in Brazil and Argentina over the next two weeks which may lead to a few areas of flooding in Minas Gerais and while a few areas in southern Brazil become a little drier biased. Parts of Argentina will also experience some
erratic rainfall in the next couple of weeks, but timely rain should occur to prevent dryness from becoming a widespread significant problem.

the meantime, South Africa rainfall increased in many areas during the weekend improving topsoil moisture especially in Eastern and Western Cape, Limpopo and northeastern Mpumalanga. Additional rain is expected in the next seven days.

in eastern Australia improved some of the irrigated summer crops and more rain is expected there over the coming week.

winter oilseed crop is suspected of being in better than usual condition and China will see improved establishment in the spring when seasonal warming occurs. China’s winter crops were not well-established last autumn but have experienced improved precipitation
in recent weeks that will be of use to establishment when it warms up once again.

weather today may provide a bearish bias to market mentality.



to no winterkill has likely occurred in key wheat production areas in the Northern Hemisphere so far this winter, although a few crops in Montana might have been negatively impacted by recent cold weather.

the meantime, India is poised to have a high yielding crop this year. Crops in the Middle East are expected to yield relatively well, and China weather has improved in recent weeks and that should translate into better crop establishment during the spring.

Europe crops are not as well established as they should be, but winter weather has been mild leaving very little threat of crop damage thus far. Much of Russia has snow on the ground, but temperatures there are well above average and expected to stay warm
minimizing the threat of winterkill. Some snowmelt is expected in Russia, however.

weather today will likely have a neutral to slightly bearish bias on market mentality.

World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI



Ag Calendar

JAN. 22:

  • USDA
    monthly cold storage – pork, beef, poultry, 3pm
    Barry Callebaut 1Q results

JAN. 23:

  • USDA
    total milk, red meat production, 3pm

JAN. 24:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, 8:30am
  • 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.
    poultry slaughter, cattle on feed (25 jan 1.30 am)

Bloomberg and FI


changes in CBOT registrations





inspections versus Reuters trade range                                            

435,129     versus  400000-600000           range

345,859     versus  450000-800000           range

1,199,136  versus  600000-1200000         range



US Chicago Fed National Activity Index (Dec): -0.35  (est 0.13, prevR 0.41)

Canada New Housing Price Index (M/M) Dec: 0.2% (est 0.0%, prev -0.1%)

Canada New Housing Price Index (Y/Y) Dec: 0.1% (est -0.1%, prevR -0.1%)

Canada CPI NSA (M/M) Dec: 0.0% (est 0.0%, prev -0.1%)




Corn futures are higher from South Korean buying interest and forming prices for US Gulf offers.  SK’s NOFI group bought 134,000 tons. They were in for three cargos.  It was for optional origin but some traders
noted it could have been from the US as they are cheapest in the world. CIF corn barges for loading firmed on Tuesday from Friday by 5 cents to 52 over the March. 

CBOT corn OI was down 17,653 contracts on Monday after rising 32,089 contracts on Friday.

Ethanol producers in the western Corn Belt are paying as much as $4.00/bu on lack of producer selling.  Dayton, OH went up 9 cents on their corn bids. Others in the eastern Corn Belt went up 3-9 cents.

The Baltic Dry Index fell 66 points or 9.6% to 623 points.    

Italian tax police confiscated an illegal shipment of pork imported from China.  9.5 tons of pork as destroyed after authorities found the meat hidden under a shipment of vegetables in a storage facility near
Padua (Northern Italy’s Veneto region).  African swine fever virus is still showing up at local (China) slaughterhouse samples.

The German AgMin confirmed a case of African swine fever was discovered in Poland in a wild boar, only 12 kilometers (7.4 miles) from the German border.

USDA US corn export inspections as of January 16, 2020 were 345,859 tons, below a range of trade expectations, below 483,559 tons previous week and compares to 1,127,279 tons year ago. Major countries included
Mexico for 153,277 tons, Colombia for 120,485 tons, and Japan for 40,881 tons.



SK’s NOFI group bought 134,000 tons of corn. They were in for three cargos. It was for optional origin, but some traders noted it could have been from the US.  One cargo was bought at $219.55 a ton c&f for
arrival around April 20.  Second cargo of 65,000 tons was bought at $218.88 a ton c&f for arrival around May 1.  This cargo for arrival around May 10 was rejected.  Either over the weekend or on Monday
Korea’s MFG bought 69,000 tons of corn at $217.90 a ton c&f for shipment by April 10. Last week KFA paid $216.30/ton c&f for arrival around April 20. 

  • Algeria
    seeks 20,000 tons of corn and 30,000 tons of soybean meal on January 23 for March 1-15 and February 10-25 shipment, respectively. 




CBOT soybeans are higher on higher soybean oil.  Soybean oil is up 44-50 points following strength in Malaysian palm oil.  Meal is lower on spreading.  Fears of the spread of 2019-nCov could limit gains in
soybeans.  The coronavirus is renewing fears China may restrict transportation of live birds and seafood.  We heard an employee at a large China soybean crusher (Shanghai) was quarantined due to illness and the rest of the office was sent home. 

With China going on holiday Friday, and lack of buying interest, we caution bulls. 

Brazilian real was stronger at 4.1911.  USD was down 3 points.  

CBOT soybean OI was up 11,193 contracts at the end of Monday. 

Offshore values are leading CBOT soybean oil 77 higher and meal $0.70 higher. 

Rotterdam vegetable oils this morning were unchanged for nearby soybean oil positions and 8 euros higher for rapeseed oil. Rotterdam meal when imported from SA were mixed. 

China was looking around for April/May Brazil soybeans, but we didn’t hear of any trades. 

Note the Chinese New Year holiday starts on Friday. 

China cash crush was last 85 cents per bushel (90 pervious), compared to 98 late last week and 36 cents year ago. 


Malaysian palm markets:
central bank cut rates.  Bloomberg noted Production in Peninsular Malaysia slipped more than 15%, while it dropped 18.5% in Sabah and about 23% in Sarawak. 

USDA US soybean export inspections as of January 16, 2020 were 1,199,136 tons, above a range of trade expectations, above 1,149,404 tons previous week and compares to 1,130,306 tons year ago. Major countries
included China Main for 550,677 tons, Bangladesh for 165,179 tons, and Mexico for 133,112 tons. 

Planalytics Brazil soybean yield lowed to 3.31 tons/hectare from 3.34.  Parana 3.50 vs 3.51, Goias 3.32 vs 3.33, Mato Grosso 3.31 vs 3.37. 


Export Developments



Strong global export demand driving up world wheat prices continued to underpin US wheat futures on Wednesday. Algeria bought about 400,000 tons of wheat.

Nearby Chicago wheat is trading at its highest level since July 2018.

March is also trading at a premium over May. 

Egypt is mulling over adding India to their country import list for wheat

March Paris wheat futures were up 0.50 at 198.75 euros as of early this morning. 
workers planned a strike for three days this week. 

USDA US all-wheat export inspections as of January 16, 2020 were 435,129 tons, low end  a range of trade expectations, below 560,976 tons previous week and compares to 524,942 tons year ago. Major countries
included Indonesia for 115,231 tons, Mexico for 62,026 tons, and Bangladesh for 56,925 tons.



Algeria’s OAIC bought around 400,000 tons of milling wheat at about $245 a ton c&f. Other prices ranged between $244 and $246 a ton c&f.  Originally the tender called for shipment in two periods, March 1-15
and March 16-31, or earlier if from SA. 

Japan received no offers for 120,000 tons of feed wheat and 200,000 tons of feed barley for arrival by March 19. 

Japan seeks 120,000 tons of feed wheat and 200,000 tons of feed barley on January 29 for arrival by March 19. 

Japan’s Ministry of Agriculture seeks 108,296 tons of food-quality wheat on Thursday from the United States and Canada.




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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