From: Terry Reilly
Sent: Wednesday, February 19, 2020 8:14:18 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 02/19/20

PDF attached


Global vegetable oil markets are on the defensive. USDA set to release new-crop US crop estimates on Friday. 





Argentina will dry down over the next 5-6 days but the country has plenty of soil moisture to allow conditions to remain favorable. 

Southern Brazil will dry down over the next two weeks but there is an opportunity for some rain Feb 24-29.

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. 

World Weather Inc. and FI



soil moisture is present in Argentina, Brazil, South Africa, India and some eastern Australia locations which should support crop development.  There is still some concern over harvest conditions in early season soybean areas of Goias and southwestern Minas
Gerais which may lead to more delay in second season corn planting, but progress is being made every day and it looks as though the pace is not far from the five year average even though much slower than last year. Good field working conditions have been occurring
in other areas and that should minimize the amount of crop that will be later planted.

Too much rain in northeastern South Africa in the past week has resulted in some flooding. Crop damage has not been assessed, but the region impacted is a minor production region in eastern Limpopo and northeastern Mpumalanga. Other areas in South Africa have
ideal crop development conditions.

rain will fall this week in northern and eastern Europe and from there to Ukraine and that will improve early season crop development potentials for areas that were too dry last autumn.

winter crops are still rated favorably with a big potential for improving rapeseed conditions in the early weeks of spring after recent weeks of rain.

winter crops are still poised to perform quite favorably, despite a drier biased outlook for the next ten days.

Asia crops are still rated well, despite erratically distributed rainfall in recent weeks.

Australia sorghum conditions have improved, but drought remains in key production areas and much more rain will be needed before winter planting of canola begins in late April. Summer crop development has improved, but it will still be a very small crop.

Today’s weather will have a mixed influence on market mentality.



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. With that said there may have been some damage in a few minor wheat areas in central Nebraska Thursday morning when temperatures fell near slightly below zero
Fahrenheit while snow cover was minimal. Today’s bitter cold in the Midwest occurred in mostly snow covered areas.

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 production 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. The outlook leaves most of these areas dry or mostly dry for the next ten days and perhaps longer.

Overall, weather today will continue to provide a mixed influence on market mentality.

World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI


Ag Calendar

FEB. 19:

  • USDA
    Broiler Report

FEB. 20:

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




Outlook forum Bloomberg trade estimates:


inspections versus Reuters trade range                                                    

501,990         versus   400000-600000  range

795,228         versus   600000-800000  range

992,294         versus   700000-1250000                range



US Housing Starts Number (Jan):  1.567Mln (est 1.425Mln, prevR 1.626Mln)

US PPI Final Demand Y/Y (Jan): 2.1% (est 1.6%, prev 1.3%)

Canada CPI Inflation (M/M) Jan): 0.3% (est 0.2%, prev 0.0%)




Corn futures
lower on lack of US corn sales to South Korea and large South American crop prospects.  Brazil is rapidly planting second crop corn following soybean harvest that is running near average. 

March corn has yet to trade at $3.80 today.  CH traded at $3.80 every trading day since January 27. 

USDA US corn export inspections as of February 13, 2020 were 795,228 tons, high end of a range of trade expectations, above 788,549 tons previous week and compares to 941,811 tons year ago. Major countries
included Mexico for 257,628 tons, Japan for 233,306 tons, and Colombia for 134,864 tons.

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



South Korea’s

FLC bought an optional origin corn cargo at $211.74 c&f for arrival around May 20. 

It was confirmed NOFI bought an optional origin corn cargo at $211.54 c&f foe arrival around May 20.

Total SK purchases this week amount to about 330,000 tons.  Black Sea origin was noted for FLC.




Offshore values are leading CBOT soybean oil 27 points lower and meal $0.40 lower. 

Rotterdam vegetable oils this morning were down 4 euros for nearby soybean oil positions and down 2-3 euros for rapeseed oil. Rotterdam meal when imported from SA were mostly 1 euro higher. 


China cash crush margins as of this morning, using our calculation, were 169 cents per bushel (159 previous), compared to 147 cents a week ago and 8 cents around this time last year. 

Malaysian palm markets:

  • NOPA
    US January crush came in well above an average trade guess at 176.9 million bushels, a record for any month, and soybean oil stocks were 2.013 billion pounds, 231 million pounds above the trade, and well above 1.757 billion pounds at the end of December. 

USDA US soybean export inspections as of February 13, 2020 were 992,294 tons, within a range of trade expectations, above 640,620 tons previous week and compares to 1,083,567 tons year ago. Major countries
included Mexico for 216,873 tons, China Main for 203,165 tons, and Egypt for 121,471 tons.


Export Developments



US wheat is giving up gains after yesterday’s rally on light profit taking.  Texas crop rating improved 11 points to 35 percent G/E.  Traders should monitor the wheat import tenders by Taiwan and Morocco (in
for US) through March 5. 

Egypt said they have enough wheat for reserves for 4.7 months and sugar for 5.3 months.  Egypt also aims to buy 4 million tons of wheat starting April 15.  They may be in soon for an import tender.   

March Paris wheat futures were down 0.50 at 195.75 euros as of early this morning.  

UAC sees Russian wheat exports at 38 million tons from 32.6 million ton forecast for 2019-20.

Russia’s AgMin looks for a 3-5 percent increase for their 2020 wheat crop.  

ProAgro sees the Ukraine 2020 grain crop down 3.19% to 72.673 million tons from 75.1 million tons in 2019.  Wheat was estimated 7 percent lower at 26.234 million tons from 28.3 million tons
in 2019.

USDA US all-wheat export inspections as of February

13, 2020 were 501,990 tons, within a range of trade expectations, below 567,349 tons previous week and compares to 363,523 tons year ago. Major countries included Mexico for 79,105 tons, Thailand for 57,839 tons, and Philippines for 57,200 tons.



  • Jordan
    bought 60,000 tons (120,000 sought) of feed barley. Possible shipment periods are May 1-15, May 16-31, June 1-15 and June 16-30.  Nine participants were noted. 
  • Japan
    in an SBS import tender received no offers for 120,000 tons of feed wheat and 200,000 tons of feed barley for arrival in Japan by July 30. 
  • Yesterday
    Jordan passed on 120,000 tons of wheat, optional origin.  Four offers were received. 
  • Jordan
    issued a new import tender for 120,000 tons of wheat set to close February 25 for Sep-Oct shipment. 
  • Japan
    seeks 93,100 tons of milling wheat on Thursday. 

  • Taiwan
    seeks 102,525 tons of US wheat on February 21 for April and/or early May shipment. 
  • 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. 26. 
  • Bangladesh
    seeks 50,000 tons of wheat by February 27. 
  • Morocco
    seeks 354,000 tons of US durum wheat on March 5 for arrival by May 31.
  • Results
    awaited: Syria seeks 200,000 tons of wheat from Russia on February 17 for shipment within 60 days of contract signing. 



  • Iraq bought 73,000 tons of white sugar and 37,000 tons vegetable oil from a local supplier. Details were lacking.


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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