From: Terry Reilly
Sent: Tuesday, February 18, 2020 8:03:18 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 02/18/20

PDF attached



US is back from holiday. Wheat is the leader today.  Locust swarms with a 40-mile reach (length) that have been destroying farm crops Africa could now threaten Southwest
Asian countries.  Coronavirus continues to hit selected markets, such and India chicken demand and Indonesia palm export shipments to China.  Truck strikes in Brazil are disrupting port loadings, especially at Santos. 




Flooding remains a serious issue across the far southern Delta and Southeast.  

Snow and rain will develop in the southern U.S. Plains Wednesday and Thursday with accumulations of 1 to 4 inches.

A larger central U.S. storm is expected during mid- to late-week next week that will bring significant moisture to the upper Midwest, northern Plains and a part of the western Corn Belt. 

Argentina’s Chaco saw flooding over the weekend where more than 14 inches fell. 

Argentina’s bottom line is mostly favorable.

Brazil crops will all received rain at one time or another during the next two weeks.

World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI


Ag Calendar

FEB. 18:

  • Australian
    crop report from Abares, Canberra
  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • New
    Zealand global dairy trade auction

FEB. 19:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am

FEB. 20:

  • USDA
    Agricultural Outlook – corn, wheat, soy, cotton acreage, 8:20am
  • USDA
    milk, read meat production, 3pm
  • Malaysia’s
    Feb. 1-20 palm oil exports data

FEB. 21:

  • USDA
    outlook — corn, soy, wheat cotton end-stockpiles
  • 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
  • FranceAgriMer
    weekly update on crop conditions
  • U.S.
    Cattle on Feed, 3pm
    Pilgrim’s Pride

Bloomberg and FI



No changes






Euro hit a 34-month low. 

Canada Manufacturing Sales (M/M) Dec: -0.7% (est 0.7% ; prevR -1.0% ; prev -0.6%)

(Reuters) – China will cut some pension contributions and insurance fees to help companies cope with the coronavirus, while firms in Hubei province, the epicenter of the outbreak, won’t have to pay pensions,
jobless and work-injury insurance until June.

China also lowered one key interest rate to pump more funds into their system. 




Corn futures
higher in part to a strong rally in soybeans and renewed hopes China will buy US agriculture products by March 15. 

CH traded at $3.80 every trading day since January 27. 

Rallies maybe limited on PNW corn tender woes.  Platts reported two South Korean firms (MFG and NOFI) stopped taking offers for US PNW corn due to quality problems.  High levels of broken corn foreign material
(BCFM) was noted. 

High water levels for lower Midwestern rivers continue to slow barge traffic. 

General Administration of Customs: China removed import restrictions on U.S. poultry and poultry products that were imposed in 2013, 2014 and 2015.  (Bloomberg)

China warned the poultry and product industry may take a hit from coronavirus.  Poultry prices are down hard this year as demand eroded. 

Bulgaria reported a bird flu outbreak (N5N8) at a duck farm in the southern part of the country. 

India officials mentioned demand for chicken dropped over the past three weeks after social media reports speculated the coronavirus was thought to be spread through chickens.  Broiler chicken prices have
fallen to 35 rupees a kg from around 70 rupees in January. 

Zimbabwe plans to import Uganda to make up for a shortfall in consumption. 



South Korea’s MFG bought 135,000 tons of optional origin corn at $211.79/ton c&f for arrival around June 11 and $211.78 for arrival around June 18. 

South Korea’s NOFI bought 66,000 tons of optional origin corn at $212.30/ton c&f for arrival around May 20. 



Soybeans and meal are higher this morning after China said they will but some US agriculture products by early March.  A 60,000-ton soybean cargo sale here or there will not be bullish for trade expectations. 
We see more than two million tons as supportive. Anything below that and the trade may again lose optimism China’s pledge may fall short for Phase One trade deal, at least for 2020 expectations. 

China’s central bank on Monday lowered a key interest rate (one-year rate) and injected more liquidity into the system.

Bloomberg noted China was considering US agriculture buying by early March.  They lifted import restriction on US poultry and poultry products. 

  • NOPA
    will issue its US January crush today.
    trade average is 173.7 million bushels, down from 174.8 in December.  End of Jan. stocks are seen at 1.782 billion pounds, above 1.757 billion at the end of December 2019. 
  • Soybean
    and Corn Advisory:  Increased 2019-20 Brazil soybean crop by 1 million tons to 125 million tons.  Argentina was increased 1 million tons to 54 million. 
  • The
    US$ is 30 higher and the lower, at the time this was written. The Brazilian Real was weaker at 4.3451, near its all-time low of 4.3829. 

Over a two-day period, offshore values are leading CBOT soybean oil 11 points higher and meal $0.10 higher. 

Over a two-day period, Rotterdam vegetable oils this morning were down one euro for nearby soybean oil positions and up 7-8 euros for rapeseed oil. Rotterdam meal when imported from SA were mostly 1-2 euros


changes (from settle)

changes (from settle)

China cash crush margins as of this morning, using our calculation, were 159 cents per bushel, compared to 147 cents a week ago and 8 cents around this time last year. 

  • Ukraine
    sunflower exports since August are running at 2.225 million tons, up 61 percent yoy, according to APK Inform. 
  • Cargo
    surveyor SGS reported month to date February 15 Malaysian palm exports at 529,191 tons, 56,060 tons below the same period a month ago or down 9.6%, and 144,938 tons below the same period a year ago or down 21.5%.  Shipments to the EU were 139,696 tons (167.6k
    Jan 1-15) and China 108,150 tons (68.3k Jan 1-15). 
  • AmSpec
    reported 1-15 Feb exports of palm oil at 511,629 tons, down from 569,260 tons during Jan 1-15.     ITS was at 541,444 tons, down 6.7% from 580,421 tons in FH Jan.

Malaysian palm markets:

changes (from settle)

changes (from settle)




  • Brazilian
    truck strike on Monday over high diesel prices crippled port operations in Santos. 
  • Major
    Brazilian ports were scheduled to ship 8.66 million tons of soybeans as of Feb. 14, up from 8.58 million tons a week earlier – Williams via Bloomberg.  6.4 million tons were scheduled to be shipped at this time last year. 
  • AgRural
    estimated the 2019-20 Brazil soybean production at 125.6 million tons, upward revised from 123.9 million tons in January.  21 percent of the crop had been collected, below 36 percent a year ago and near its 5-year average. 
  • Soybean
    and Corn Advisory:  increased 2019-20 Brazil soybean crop by 1 million tons to 125 million tons.  Argentina was increased 1 million tons to 54 million. 
  • Last
    week Abiove estimated the Brazil soybean crop at 123.7 million tons, up from 122.8 previously.  Exports were seen at 73.5 million tons, down from 75 million projected in January.  They look for the crush to end up near 44.5 million tons, up 500,000 from their
    January projection.  Separately, Agroconsult is at 126.3 million tons. 
  • Brazil’s
    economic policy manager estimated a long-term coronavirus outbreak could have an economic impact on Brazil but maintained a 2.4 percent growth for 2020. 


of IL: 2020 Soybean Price Prospects
T. "2020 Soybean Price Prospects." farmdoc daily (10):29,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, February 17, 2020.


Export Developments





Chicago wheat prices hit a one-week high on technical buying amid tighter global stocks, locust problems in Africa and renewed hopes China will buy US agriculture products after announcing over the weekend
they plan to buy goods from the US by early March.   Not all news is bullish. India estimated a record wheat production for 2019-20. 

ABARES: Australia 2019-20 wheat crop fell to 15.17 million tons, down from 15.85 million tons at the end of 2019, but still above some private estimates.  15.17 million tons puts the crop lowest in 12 years. 

Meanwhile, India projected a record 2019-20 wheat crop of 106.21 million tons, well above the 99-100 benchmark traders see as a break-even.  Domestic wheat consumption for India may end up near 98 million
tons in 2019-20, a record, according to USDA.  2019-20 production was estimated by USDA at 102 million tons, 4.2 million below the India government estimate. 

March Paris wheat was unchanged on Monday.  Today
Paris wheat futures were up 1.50 at 195.50 euros as of early this morning.

Ukraine grain exports are running at 38.4 million tons, up 24.5 percent from the same period a year ago, according to the Ministry of Economic Development.  State statistical service office at the end of the
year pegged the Ukraine grain crop at 75.1 million tons. 

APK-Inform has the Ukraine grain crop at 75.08 million tons. 

Russian 12.5 percent protein wheat prices fell to $220/ton, down $6 from the previous week, according to SovEcon.  IKAR showed a $3/ton decrease to $192.00/ton. 



  • Bangladesh
    seeks 50,000 tons of wheat by February 27. 
  • Japan
    seeks 93,100 tons of milling wheat on Thursday. 

  • Morocco
    seeks 354,000 tons of US durum wheat on March 5 for arrival by May 31.
  • Taiwan
    seeks 102,525 tons of US wheat on February 21 for April and/or early May shipment. 
  • Turkey
    bought at least 155,000 tons of wheat.  Results are still awaited. Lowest offer $222.77/ton c&f: Turkey’s TMO seeks around 250,000 tons of wheat for March shipment.
  • Turkey
    bought 25,000 tons of barley for 2/26-3/15 loading.  $200.88 c&f was noted. 

  • Turkey
    bought 50,000 tons of durum for March 1-20 shipment.  $314.00 and $325.75/ton c&f was noted. 
  • Results
    awaited: 4 offers…Jordan seeks 120,000 tons of wheat, optional origin, on Feb 18.
  • Results
    awaited: Syria seeks 200,000 tons of wheat from Russia on February 17 for shipment within 60 days of contract signing. 
  • Jordan
    seeks 120,000 tons of feed barley on Feb 19. Possible shipment periods are May 1-15, May 16-31, June 1-15 and June 16-30.



None reported



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


Description: Description: Description: Description: FImail


Trading of futures, options, swaps and other derivatives is risky and is not suitable for all persons.  All of these investment products are leveraged, and you can lose more than your initial deposit.  Each investment product is offered
only to and from jurisdictions where solicitation and sale are lawful, and in accordance with applicable laws and regulations in such jurisdiction.  The information provided here should not be relied upon as a substitute for independent research before making
your investment decisions.  Futures International, LLC is merely providing this information for your general information and the information does not take into account any particular individual’s investment objectives, financial situation, or needs.  All investors
should obtain advice based on their unique situation before making any investment decision.  The contents of this communication and any attachments are for informational purposes only and under no circumstances should they be construed as an offer to buy or
sell, or a solicitation to buy or sell any future, option, swap or other derivative.  The sources for the information and any opinions in this communication are believed to be reliable, but Futures International, LLC does not warrant or guarantee the accuracy
of such information or opinions.  Futures International, LLC and its principals and employees may take positions different from any positions described in this communication.  Past results are not necessarily indicative of future results.


This email, any information contained herein and any files transmitted with it (collectively, the Material) are the sole property of OTC Global Holdings LP and its affiliates (OTCGH); are confidential, may be legally privileged and are intended solely for
the use of the individual or entity to whom they are addressed. Unauthorized disclosure, copying or distribution of the Material, is strictly prohibited and the recipient shall not redistribute the Material in any form to a third party. Please notify the sender
immediately by email if you have received this email by mistake, delete this email from your system and destroy any hard copies. OTCGH waives no privilege or confidentiality due to any mistaken transmission of this email.