From: Terry Reilly
Sent: Monday, February 10, 2020 8:06:20 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 02/10/20

PDF attached

 

Morning.
USDA is due out with updated S&D’s on Tuesday. Soybeans turned lower after trading up six straight sessions overnight, while corn and wheat are on the defensive.  Look for a choppy but slow trade today. 

 

 

 

Weather

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS:
 

Not
much has changed since Friday. Favorable soil moisture is present in Argentina, Brazil, South Africa, India and some eastern Australia locations which should support crop development.  More rain will fall this week in southeastern Europe and from there to
Ukraine and that will improve early season crop development potentials for areas that were too dry last autumn.

            Today’s
weather will maintain a bearish influence on market mentality, although the lack of change in weather should minimize its overall influence

 

MARKET
WEATHER MENTALITY FOR WHEAT:
 

Many
of the winter crop areas in the world that experienced poor crop establishment because of dryness last autumn have seen some timely precipitation in recent weeks. The moisture should help improve winter crop establishment prior to reproduction this spring.
There has also been very little winterkill this year and that should be supporting larger crops.

            The
biggest dry concern today is in North Africa and in particular southwestern Morocco where durum wheat and barley production has been cut. There is potential for larger small grain losses from North Africa if improved rainfall does not occur soon. Spain and
Portugal are also drying out but have adequate subsoil moisture for now.

           
Overall, despite market performance of late, there is still no good weather related reason for futures price appreciation and some caution is warranted there. Today’s weather will maintain little change from that of late last week and that should include a
bearish bias to market mentality.

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

MONDAY,
FEB. 10:

  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • National
    Ethanol Conference, Feb. 10-12

    • Speakers
      include former U.S. President George W. Bush and USDA Undersecretary Ted McKinney
  • EU
    weekly grain, oilseed import and export data
  • Malaysia’s
    Feb. 1-10 palm oil exports data
  • Ivory
    Coast cocoa arrivals

TUESDAY,
FEB. 11:

  • USDA’s
    monthly World Agricultural Supply and Demand (Wasde) report, noon
  • France
    agriculture ministry gives estimate for 2020 winter grain and rapeseed plantings
  • China
    agriculture ministry’s (CASDE) supply, demand monthly report
  • Brazil
    Conab soybean and corn yield, area and production
  • Sao
    Martinho Earnings Conference Call, Sao Paulo
  • HOLIDAY:
    Japan

WEDNESDAY,
FEB. 12:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • FranceAgriMer
    monthly cereals balance sheet

THURSDAY,
FEB. 13:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, 8:30am
  • Giant
    pulp maker Suzano holds investor day in Sao Paulo
  • Brazil’s
    grain exporter group Anec holds conference on 2019-20 crop outlook

FRIDAY,
FEB. 14:

  • 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
  • FranceAgriMer
    crop conditions – French crops office expected to resume crop-conditions reports after winter break
  • New
    Zealand food prices
  • Biosev
    holds analyst conference call to discuss 4Q earnings.

Source:
Bloomberg and FI

 

 

 

 

No
changes in CBOT registrations

 

 

 

CFTC
Commitment of Traders

Funds
were much less long in corn than expected. 

 

 

As
of Friday:

 

 

 

 

 

 

 

 

 

Corn.

·        
Corn futures
are
under pressure early on Monday on lack of US demand and favorable weather in South America.  The harvest progress of soybeans in Brazil is running near a five-year average. Producers tend to follow up with second corn crop plantings about a day or two following
soybean harvest. 

·        
908 deaths and more than 40,000 cases of coronavirus was recorded by the end of Sunday.

·        
China sold 10,000 tons of pork from state reserves late last week.  They look to import more meat to satisfy consumption demand. 

·        
Open Interest in corn was down 5,773 contracts.

·        
Goldman Roll – day 2 

·        
African swine fever was confirmed in the Philippines, first case since September. The Philippines is the world’s seventh largest pork importer and tenth largest consumer, according to Bloomberg. 

 

Export
Developments

  • None
    reported

 

Soybean
complex
.

·        
Open Interest in soybeans was up 6,139 contracts. 

·        
The US$ is lower and the slightly higher. The Brazilian Real was weaker at 4.3157.

·        
Money managers extended their net short position in soybean meal to a record 64,377.

·        
APK-Inform reported August to date Ukraine sunflower exports at 2.112 million tons, up 59 percent from the previous season. 

·        
Brazil exported 77.7 million tons of soybeans during the February-January period, down from 84.4 million tons in 2018-19.  Meal exports fell to 16.8MMT from 17.4MMT previous and soybean oil dropped to 1.010MMT
from 1.331MMT. 

·        
Heavy rain today for Brazil’s Santos and Paranagua ports could slightly disrupt shipments.

·        
Offshore values are leading CBOT soybean oil 21 points lower and meal $0.50 lower. 

·        
Rotterdam vegetable oils this morning were 15-16 euros lower for nearby soybean oil positions and 7-8 euros lower for rapeseed oil. Rotterdam meal when imported from SA were unchanged to 2 euros lower. 

·        
China:

·        
China cash crush margins as of today, using our calculation, was 130 cents per bushel, compared to 139 cents more than a week ago and 40 cents around this time last year. 

·        
China December palm imports fell 24 percent from the previous year to 723,237 tons.

·        
Cargo surveyor SGS reported month to date February 10 Malaysian palm exports at 323,341 tons, 134,490 tons below the same period a month ago or down 29.4%, and 69,143 tons below the same period a year ago
or down 17.6%.  AmSpec showed a 20 percent drop to 364,456 tons. 

·        
Malaysian palm markets:
 China
demand concerns amid coronavirus and palm export data weighted on palm oil futures.  End of January palm oil stocks came in below expectations, but production fell nearly 48,000 tons below a Reuters trade guess.  Stocks are lowest in 2 years.