From: Terry Reilly
Sent: Thursday, February 20, 2020 8:26:03 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 02/20/20

PDF attached


Egypt bought 120k of vegoils.


released selected area numbers this morning. USDA 2020 outlook area versus analysts estimates (Reuters estimates), 2020 baseline and USDA 2019, in millions of acres:

Corn 94.0/93.6/94.5/89.7

Soybeans 85.0/84.6/84.0/76.1

All wheat 45.0/44.9/45.0/45.2





Mid-February ENSO suggests the potential for near term El Nino increased from last months forecast. 

Argentina will dry down over the next 5 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.

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





in Argentina over the next week to ten days will eventually grab the market’s attention, but today’s soil moisture is very good and crops will coast through this first week of net drying without much stress. Timely rain will be needed again later in March
to ensure the best production potential.

Brazil crop weather still looks quite appealing with timely rain in most production areas and seasonable temperatures.

South Africa will have its best summer grain and oilseed production year since 2017 with weather over the next two weeks maintaining that favorable outlook.

Southeast Asia palm oil weather remains quite favorable and little change will occur through the next two weeks.

China’s winter rapeseed should experience much improvement early this spring after abundant winter precipitation. India’s winter grain and oilseed crops are also expected to perform well.

Europe weather is mostly good and winter crops will need timely rainfall to support normal development this spring especially in Spain where the greatest drying has occurred recently.

Concern is rising over early season corn planting delays in the U.S. Delta and interior southeastern states because of too much rain. The problem of moisture excesses will continue into March delay will be realized.

Overall, weather today will likely support a mixed influence on market mentality with bearish bias.



Africa, Spain and Portugal are drying down and significant rain will soon be needed in unirrigated areas to ensure the best production potential. Some yield cuts have already occurred in southwestern Morocco, but losses elsewhere have not been as significant.
Rain must fall soon, however, since reproduction is getting under way in North Africa and will soon occur in the Iberian Peninsula and without rain and good soil moisture yields will come crashing downward.

Limited winterkill around the world this year has kept production potentials mostly good, although winter crops were not well established in the U.S., Southeastern Europe, southern Russia, Kazakhstan or China. With that said most of these areas have received
good amounts of moisture during the winter which should translate into improving crop development potential early in the spring so that production potentials are favorably restored.

India is still expecting a large crop even though there is not much precipitation expected in key wheat areas for a while. Some showers will occur in eastern and far northern parts of the nation in this coming week which will support some reproduction.

Overall, weather is still not offering a good reason for serious market price appreciation. If anything, weather conditions have left a good reason to expect crop improvements early this spring. Overall, weather today may offer a neutral to bearish bias to
market mentality.

World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI


Ag Calendar

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








US Philadelphia Fed Business Outlook Feb: 36.7  (est 11.0 ; prev 17.0)

US Initial Jobless Claims Feb 15: 210K (est 210K ; prevR 206K ; prev 205K)

US Continuing Claims Feb 8: 1.726M (est 1.717M ; prevR 1.701M ; prev 1.698M)

USDA Sees U.S. Farm Exports To China At $14 Bln In 2020/21




Corn futures
lower on speculation China will be slow on buying US grains. Large SA production prospects continue to hang over the market. 

There was talk China picked up four cargoes of sorghum out of the US Gulf, but no corn.

  • As
    of Thus., China put the overall death toll at 2,126+ and 75,700+ infections.

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

USDA’s annual outlook conference started today.  The full 2020-21 US commodity outlooks will be out on Friday.

Japan’s usage of corn in animal feed fell to 47.7% in December, compared with 48.4% in the prior year, according to the AgMin. 

China’s sow herd increased by 1.2% in January from December.

The USDA Broiler Report showed eggs set in the US up 3 percent and chicks placed up 5 percent.  Cumulative placements from the week ending January 4, 2020 through February 15, 2020 for the United States were
1.34 billion. Cumulative placements were up 4 percent from the same period a year earlier.

A Bloomberg poll looks for weekly US ethanol production to be up 16,000 at 1.049 million barrels from the previous week and stocks to increase 47,000 barrels to 24.405 million.




None reported




Offshore values are leading CBOT soybean oil 9 points lower and meal $0.90 lower. 

Rotterdam vegetable oils this morning were down 10 euros for nearby soybean oil positions and down 8 euros for rapeseed oil. Rotterdam meal when imported from SA were mostly unchanged. 


China cash crush margins as of this morning, using our calculation, were 166 cents per bushel (169 previous), compared to 147 cents a week ago and 8 cents around this time last year. 

Malaysia looks to fully implement B20 biodiesel by mid-2021.  About 1.06 million tons of palm oil would be used to produce enough B20 annually for the transportation sector, 1.3MMT when adding B7 for the industrial

ITS reported 1-20 February palm exports at 817,314 tons, up 8.7 percent from 751,868 tons shipped during the same period a year ago. 

AmSpec reported Feb 1-20 palm exports at 819,653 tons, up 10.9 percent. 

Malaysian palm markets:
off 3-month low


Export Developments



US wheat is lower on lack of bullish developments and prospects for large 2020 global production.   

March Paris wheat futures were up 0.50 at 196.25 euros as of early this morning.

Coceral looks for EU’s soft-wheat production to end up near 137.9 million tons in 2020 compared with 145.7 million tons a year earlier.

USDA/FAS sees the Russian 2020 wheat crop at 87 million tons.  Russia’s AgMin looks for a 3-5 percent increase, or 83-87 million tons for 2020

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.



  • Saudi
    Arabia seeks 715,000 tons of 11% and 12.5& protein wheat on February 21 for April-June shipment. 
  • Syria
    passed on 200,000 tons of wheat from Russia (should of closed February 17) for shipment within 60 days of contract signing. 
  • Tunisia
    bought 75,000 tons of feed barley at $205.67-$206.56/ton c&f for March and April shipment. 
  • Japan
    bought 93,100 tons of milling wheat. Original details as follows: 

  • Taiwan
    seeks 102,525 tons of US wheat on February 21 for April and/or early May shipment. 
  • Jordan
    issued a new import tender for 120,000 tons of wheat set to close February 25 for Sep-Oct 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.



  • 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


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