From: Terry Reilly
Sent: Wednesday, February 05, 2020 8:28:51 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 02/05/20

PDF attached


palm oil increased 5 percent.  The Goldman Roll starts Friday; they will move March positions forward.






continues supportive of crops in most of Brazil and Argentina. There is some concern over rainfall in Brazil delaying some of this year’s soybean harvest, but the bottom line should not impact production for most areas. A few areas in Argentina may become
too wet in the next few days after some heavy rain already occurred overnight.

summer crops will get some additional rainfall in this coming week and India crops will remain in good shape. China still has potential for improving rapeseed production potential once spring arrives due to recent precipitation and improving soil moisture
in parts of southeastern Europe into Kazakhstan may do to the same for those areas in the spring.

Asia weather will trend a little wetter in the coming week restoring favorable soil moisture to many Indonesian and Malaysian crop areas. Rain is needed most in parts of Peninsular Malaysia.

weather today is likely to contribute a bearish bias on market mentality.



is very little risk of crop threatening cold for small grain crops around the world. Cooling in the U.S. this week in the west-central and southwestern Plains will prove to be beneficial since recent temperatures were so very warm. No crop damage occurred
in the west-central high Plains region this morning as temperatures dropped near and below zero Fahrenheit due to snow cover.

precipitation in southeastern Europe and the southwestern grain areas of the Commonwealth of Independent states may improve production potentials in the spring. China’s winter crops are still expected to improve in the early spring if there are a few timely
rain events as temperatures trend warmer

India is still expecting a huge winter wheat crop and the only thing needed would be a few timely rain events this month and no extreme heat. Some of those conditions will be met in this coming week.

in east-central Australia this week will be great enough to bolster topsoil moisture and possibly improve a few water reservoir levels, but much more rain will be needed before autumn planting begins in April. The recent weather trends have looked appealing
with rain falling more frequently easing some of the dryness.

Africa wheat is still a concern with southwestern Morocco production already expected to be down. Timely rain will be needed later this month and in March to support reproduction and filling throughout northern Africa. Early February will be dry and warm biased.

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

World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI


Ag Calendar

FEB. 5:

  • Statcan
    Canada wheat, soybean, barley, canola and durum stocks, 8.30am
  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • New
    Zealand ANZ Bank Commodity World Price

FEB. 6:

  • UN’s
    FAO World Food Price Index, 4am
  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, 8:30am

FEB. 7:

  • 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
  • Agricultural
    conference organized by consultancy IKAR, Moscow
  • Guatemala
    Coffee Exports

Bloomberg and FI



No changes






US ADP Employment Change Jan: 291K (exp 158K; prev 202K)

US Trade Balance (USD) Dec: -48.9B (exp -48.2B; prev -43.1B)

Canadian International Merchandise Trade (CAD) Dec: -0.37B (exp -0.61B; prev -1.09B)

US December Crude Oil Exports Reached 3.669Mln BPD (prev 3.023Mln BPD) – RTRS




Open Interest in corn was up 13,454 contracts.

WTO crude oil traded more than $1.25 higher early Wednesday in part to reports that researchers in China and UK made breakthroughs on inhibiting the virus. 

Indonesia may import up to 200,000 tons of corn this year for use in animal feed.

  • Pork
    product prices have weakened in China since the outbreak of the coronavirus, in part to lower consumption and China state reserve sales of frozen pork.  Look for China to continue releasing pork out of reserves. 

African Swine Fever Shrinks Pork Production in China, Swells Demand for Imported Pork

  • Brazil’s
    ethanol consumption in 2019 hit a record 32.8 billion liters (8.6 billion gallons), up 10.5% from 2018, according to Unica.  This consisted of hydrous ethanol of 22.5 billion liters, up 16.3%, and anhydrous ethanol 10.3 billion liters.

A Bloomberg poll looks for weekly US ethanol production to be unchanged at 1.029 million barrels from the previous week and stocks to decrease 249,000 barrels to 23.995 million.



  • China
    plans to sell 2.96 million tons of corn from state reserves on February 7.




oil was up little more than 90 points at the electronic pause, which is supporting soybeans.  A five percent increase in Malaysian palm oil futures and higher China vegetable oil prices spilled over into SBO futures.  Meal was unchanged to slightly lower. 

China continues to buy soybeans despite the coronavirus epidemic. We heard they bought at least 10 cargos of SA soybeans earlier this week. 

China announced they plan to diversify import channels for meat and other agriculture products.  

After seeing rain across the heart of the southern growing areas, Argentina rain will continue today across Cordoba, eastern La Pampa, Santa Fe, and Buenos Aires, lasting through Feb. 7. Rainfall will range
from 1.00 to 3.00 inches.

Open Interest in soybeans was up 6,970 contracts. 

The US$ is higher and the is lower. The Brazilian Real was higher-last 4.2456.

Yesterday a White House adviser said the China coronavirus would delays a surge in US exports to China expected from the Phase 1 trade deal. 

Reportedly the US Department of Commerce said they will make no changes to the current anti-dumping duties on biodiesel imports from Argentina.  This is response to a September inquiry from the US Court of
International Trade.

Offshore values are leading CBOT soybean oil 27 points higher and meal $1.10 lower. 

Rotterdam vegetable oils this morning were up 14 euros for nearby soybean oil positions and 8 euros higher for rapeseed oil. Rotterdam meal when imported from SA were down 2-10 euros. 


China cash crush margins as of today, using our calculation, was 130 cents per bushel (120 previous), compared to 84 cents more than a week ago and 48 cents around this time last year. 

Malaysian palm oil increased 5% on trade estimates for end of January stocks to decrease 41 percent from the previous year. 

Malaysian palm markets:



Export Developments



US wheat futures are sharply higher following EU wheat and higher outside commodity markets.  A higher USD may limit gains.

Goldman Roll starts Friday. 

March Paris wheat futures were up 2.75 at 193.50 euros as of early this morning.



  • Syria
    seeks 200,000 tons of wheat from Russia on February 17 for shipment within 60 days of contract signing. 




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


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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