FW: 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.

• CBOT
  soybeans were lower Monday morning in a late electronic session selloff. They were higher overnight as China continued to buy soybeans from South America last week and higher soybean meal futures amid short covering by money managers.  Soybean oil was on the
  defensive from a drop in Malaysian palm oil prices.  Uncertainty over Chinese demand for vegetable oils from the spread of coronavirus remains a concern. However, state-run companies have been told to restart and/or increase oilseed crushings last week, leading
  some to believe China will not default on importing soybeans.  There was talk on Sunday that China bought about 15 cargos of SA soybeans last week.  A Bloomberg survey for Conab soybean production came in at 124.3 million tons.
  AgRural
  mentioned the recent rain across Brazil boosted production prospects and production may exceed 123.9 million tons.  16 percent of the soybean crop was harvested by Thursday, below 26 percent from this time last year which was above normal. 
  
• May
  CBOT crush was under pressure this morning, trading last around 98. 
  

·        
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. 

 

 

Oilseeds
Export Developments

• South
  Korea’s Nonghyup Feed Inc. (NOFI) seeks up to 13,000 tons of palm kernel meal expellers, 14,000 tons of copra meal and 8,000 tons of corn gluten feed, on Feb. 11 for arrival in South Korea in March and April.
  

 

Wheat

·        
US wheat futures are mostly lower in Chicago and KC on light demand for US wheat. MN traded two-sided overnight.  Strength in Paris wheat is limiting losses for MN. Algeria seeks wheat for April shipment. 

·        
Southeast Queensland and northeastern New South Wales in Australia are expected to get additional rain this week after seeing rain last week. 

·        
Egypt said they shave enough wheat to last 4.6 months.  Egypt said they will keep their wheat moisture limit cap at 13.5 percent  to April 2021. 

·        
March Paris wheat futures were up 1.00 at 194.25 euros as of early this morning.

·        
French wheat is cheapest in the world.

 

Export
Developments.

• Algeria
  seeks 50,000 tons of soft milling wheat for April shipment.
• Jordan
  seeks 120,000 tons of optional origin wheat on Feb. 11. 

• Jordan
  seeks 120,000 tons of optional origin animal feed barley on Feb. 12, at various shipment periods thought to be May 1-15, May 16-31, June 1-15 and June 16-30.
• Japan
  in an SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of feed barley for arrival in Japan by July 30, on Feb. 12. 
  
• Syria
  seeks 200,000 tons of wheat from Russia on February 17 for shipment within 60 days of contract signing. 
  
• Turkey’s
  TMO seeks around 250,000 tons of wheat and 50,000 tons of durum on Feb. 18 for March shipment.
  
• The
  Philippines might be in for wheat soon.

 

Rice/Other

·        
Results awaited: Mauritius has delayed the deadline for to buy up to 6,000 tons of long grain white rice to Feb. 10, for delivery between May 1 and July 31.

·        
Turkey’s TMO seeks 20,000 tons of rice on Feb. 12 for shipment between Feb. 19 and April 6.