From: Terry Reilly
Sent: Thursday, January 23, 2020 8:12:00 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 01/23/20

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 and Argentina become a little drier biased. Timely rain will be needed in
the drier areas to prevent dryness from becoming a widespread significant problem.

the meantime, South Africa rainfall will be erratic for a while with eastern areas more favored for rain than the west. A greater need for moisture will soon evolve in the western production areas.

rain in eastern Australia improved some of the irrigated summer crops and more rain is expected in eastern and northern Queensland and northeastern New South Wales through Saturday before the region dries out and heats up again.

India’s 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.
Hebei, China still needs moisture.

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 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. 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







US Initial Jobless Claims 211K (est 214K; prevR 205K; prev 204K)

Continuing Claims 1.731 Mln (est 1.750 Mln; prevR 1.768 Mln; prev 1.767 Mln)




Corn futures are trending lower. March/May spread continues to firm on lack of US producer selling. 

WTI crude is more than $1.00 lower and USD slightly lower. Under the 24-hour announcement system, USDA reported a total of 284,948 tons of corn was sold to Guatemala and Unknown. 

The Baltic Dry Index fell 47 points or 7.5% to 576 points.  The capesize index .BACI slipped 118 points, or 36.3%, to 207. 

Meanwhile the surplus of supertankers in the Middle East during the next month is set to increase to more than double the usual level for this time of year, according to a weekly Bloomberg survey. 

South Africa will supply Zimbabwe millers 100,000 tons of corn. 

China imported 730,000 tons of corn in December but much of that could have been of Ukraine origin. But US demand may increase due short exportable supplies out of SA and eventually Ukraine.  Japan may continue
to buy from the US PNW before switching their origin in July and August. 

U.S. Dec. pork supplies in cold storage were 581 million pounds, up 15% from Dec. 2018. 

The US produced 9.8 billion eggs in December, up 3.9 percent from Dec 2018. 

The USDA Broiler report showed eggs set in the US up 4 percent and chicks placed up 4 percent.  Cumulative placements from the week ending January 4, 2020 through January 18, 2020 for the United States were
571 million, up 4 percent from the same period a year earlier. 

A Bloomberg poll looks for weekly US ethanol production to be down 17,000 at 1.078 million barrels from the previous week and stocks to increase 224,000 barrels to 23.230 million.







CBOT soybeans, meal and oil are lower on lack of bullish news and lower lead by outside markets. 

China restricted travel to a second major city ahead of the lunar new year holiday.  

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

In a down market on Wed., CBOT soybean OI was up 10,895 contracts. 

Brazilian real was stronger at 4.1622.  USD was down slightly.  

Offshore values are leading CBOT soybean oil 50 points lower and meal $0.10 lower. 

Rotterdam vegetable oils this morning were down 2 euros for nearby soybean oil positions and 7 euros lower for rapeseed oil. Rotterdam meal when imported from SA were mixed. 

China cash crush was last 84 cents per bushel (85 pervious), compared to 98 late last week and 36 cents year ago. 


Malaysian palm markets:


is trying to smooth out trade tensions with India by committing to buy more Indian sugar.  A large Malaysian sugar refiner said it will increase sugar imports from India.  MSM Malaysia Holdings Berhad plans to purchase 130,000 tons of raw sugar from India
worth 200 million ringgit ($49.20 million) in the first quarter. The company bought around 88,000 tons of raw sugar from India in 2019. 


Export Developments



Chicago wheat was mixed early this morning in a quiet trade.  News was light. 

CBOT Chicago wheat volatility is at its highest level since mid-December. 

Europe remains dry across parts of northern France into Germany and Poland. 

March Paris wheat futures were up 0.50 at 196.25 euros as of early this morning. 
workers planned a strike for three days this week. 



Saudi Arabia’s Saudi Grains Organization (SAGO) seeks 900,000 tons of animal feed barley on Friday.  660,000 tons are for Red Sea ports and 240,000 tons Gulf.  On Nov. 18, 2019, SAGO bought 1.02 million tons
at an average price of $216.62 a ton c&f.

  • Japan’s
    Ministry of Agriculture bought 108,296 tons of food-quality wheat on Thursday from the United States and Canada. Original details as follows.




20,000   Brown Short   China     March 15-31/Gunsan

20,000   Brown Short   China     April 30/Masan

15,556   Brown Short   China     May 31/Donghae

22,222   Brown Medium  U.S.      May 31/Incheon

  • Mauritius
    seeks up to 6,000 tons of long grain white rice on Feb. 3, optional origin, for delivery between May 1 and July 31.


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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