From: Terry Reilly
Sent: Tuesday, February 25, 2020 7:47:26 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 02/25/20

PDF attached


COVID-19: 80,000+ cases and more than 2700 deaths. 






America weather remains favorable, but there may be a few more concerns today over net drying in Argentina and a wet bias from center south through center west Brazil during the next couple of weeks. No serious weather anomalies are expected in this week,
but rain will be needed in Argentina and far southern Brazil during March.

Asia weather is quite varied. World Weather, Inc. anticipates an erratic shower and thunderstorm pattern in March supporting early season moisture boosting.

Winter grain and oilseed crops will remain favorably rated and poised for improvement in the spring in China and southeastern Europe. India’s winter crops are expected to perform well this year because of greater than usual rainfall.

South Africa will get some timely rainfall along with parts of Australia to maintain a favorable outlook. With that said, eastern Australia production has not improved much, but some sorghum has received supplemental rainfall recently.

weather today will likely produce a neutral to slightly bullish bias.



is still not much risk to winter wheat from adverse weather for a while. Frost and freezes in the southeastern United States likely burned back some new vegetative development, but no permanent harm likely came to the region’s crops. Some additional moisture
will fall early this week in the central U.S. Plains, although amounts will be light in same areas that have been drier biased for a while, including western Kansas, eastern Colorado and neighboring areas.

Russia crops are going to come into spring favorably moist except in the far south where greater rain will be needed. Kazakhstan will also need greater rain in the spring while Ukraine already has enough moisture to induce some improvement just as soon as
seasonal warming arrives.

Africa’s outlook has not changed for Morocco, but there is a little more rain slated for Tunisia and northeastern Algeria over the next two weeks. No general soaking of rain is expected, but any showers would be welcome.

Australia’s winter small grains will not be planted prior to late April which leaves plenty of time for improved weather and soil conditions.

wetter outlook over the next two weeks will further ensure a significantly large-sized winter crop.

and Spain need to warm up along with Italy to support spring planting and to stimulate early season crop development when weather conditions improve.

     Overall, weather today will likely maintain a neutral environment for wheat trading.

World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI


Ag Calendar

FEB. 25:

  • AmSpec,
    Intertek, SGS palm oil export data for Feb. 1-25

FEB. 26:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am (26 feb 2100)

FEB. 27:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, 8:30am
  • Port
    of Rouen data on French grain exports
  • International
    Grains Council monthly market report

FEB. 28:

  • 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.
    agricultural prices paid, received, 3pm
  • AmSpec,
    Intertek, SGS palm oil export data for Feb. 1-28
    Olam, Golden Agri, Sime Darby

Bloomberg and FI



No changes




inspections versus Reuters trade range                                                    

411,523         versus   350000-600000  range

912,922         versus   600000-950000  range

594,536         versus   600000-1100000                range



Philadelphia Fed Non-Manufacturing Firm-Level Business Activity Feb: 36.1 (prev 23.5)






Corn futures

are higher on technical buying, but lower wheat may hinder gains. 
Korea is busy again buying corn, wheat and searching for soybean meal.  We estimate SK bought at least six cargos of corn so far this week. 

CBOT corn open interest fell 15,521 contracts on Monday. 

China looks to sell 20,000 tons of pork from reserves on February 27. 

USDA US corn export inspections as of February 20, 2020 were 912,922 tons, within a range of trade expectations, above 795,399 tons previous week and compares to 761,656 tons year ago. Major countries included
Mexico for 333,572 tons, Japan for 197,892 tons, and Colombia for 170,482 tons.

South Africa will release its initial estimate for corn production on Wednesday and a Reuters poll looks for 14.504 million tons, up from 11.259 million tons in 2019. 7.99 million was estimated for white and
6.52 million for yellow. 



South Korea’s FLC group bought 65,000 tons of optional origin corn (“private deal”) at around $207.99 a ton c&f shipment around LH May to early June. This could be from the US.  Yesterday they paid $215.00
for 65k arrival around June 30.

South Korea’s KOCOPIA group bought 60,000 tons of US corn at around $219.98 a ton c&f for FH 2020 arrival.

South Korea’s NOFI group bought 69,000 tons of optional origin corn (in for 138k) at around $208.95 a ton c&f for arrival around June 30.

South Korea’s KFA group bought 54,000 tons of optional origin corn at around $208.95 a ton c&f for arrival around June 20.  Yesterday they paid $210.20 for 65k for arrival around June 25. 



Attaché for Brazil: Livestock and Products Semi-annual



Argentina is closed for holiday today.  Much of Brazil will be on holiday. 

China buying of SA soybeans slowed Monday as the markets sold off.  There were rumors China was in for a couple Brazilian boats, but nothing was confirmed.  They may have also been in for a Argentina cargo
for June shipment on Tuesday. 

The Canadian canola crush in January was reported at 855,000 tons, up from 830,000 tons in January 2019.  August through January canola crush is up 7 percent from the same period a year ago.  Part of the reason
is lack of China buying. 

Offshore values are leading CBOT soybean oil 55 points higher and meal $2.40 higher.

Rotterdam vegetable oils this morning were down 4-5 euros for nearby soybean oil positions and up 10-13 euros for rapeseed oil. Rotterdam meal when imported from SA were mixed. 


China cash crush margins as of this morning, using our calculation, were 127 cents per bushel (141 previous day), compared to 159 cents a week ago and negative 12 cents around this time last year. 

January biodiesel consumption was 706,176 kiloliters, about 35 percent above the 2019 monthly average.  In 2019, Indonesia consumed 6.26 million kiloliters of biodiesel. 

Cargo surveyor SGS reported month to date February 25 Malaysian palm exports at 970,094 tons, 45,132 tons below the same period a month ago or down 4.4%, and 151,834 tons below the same period a year ago or
down 13.5%.  AmSpec reported exports at 981,073 tons from 1,011,515 tons shipped during Jan 1-25.  ITS reported a 5 percent decline to 970,764 tons from 1,022,023 tons month earlier.

Malaysian palm markets:
since late October 2019

USDA US soybean export inspections as of February 20, 2020 were 594,536 tons, below a range of trade expectations, below 1,005,050 tons previous week and compares to 1,308,510 tons year ago. Major countries
included China Main for 137,601 tons, Mexico for 101,381 tons, and Egypt for 93,999 tons.

The European Union reported soybean import licenses since July 1 at 9.007 million tons, below 9.320 million tons a year ago, a 3 percent decrease. European Union soybean meal import licenses are running at
11.569 million tons so far for 2019-20, above 9.320 million tons a year ago. EU palm oil import licenses are running at 3.510 million tons for 2019-20, down from 4.189 million tons a year ago, or down 17 percent.  European Union rapeseed import licenses since
July 1 were 4.252 million tons, up 46 percent from 2.915 million tons from the same period a year ago.


Export Developments


vegetable oil markets versus Brent

Reuters and FI



US wheat is down for its fifth consecutive session, basis Chicago, on slow US export demand and ongoing coronavirus concerns.  KC was moderately lower before the electronic close and MN slightly higher.  A
recovery in selected global markets and lower USD may limit downside risk. 

US selected state combined good/excellent winter wheat ratings:  (see Reuters table for other states attached)

Texas 31 vs. 35 last week and 31 at the end of November

Oklahoma 46 versus 36 at the end of January and 52 percent at the end of November

  • Canadian
    wheat and canola movement along rail lines are expected to increase after Canadian police started breaking up blockades that were put up in part to protest a new pipeline.  The blockade in Tyendinaga, Ontario was put up February 6 and effectively cut off cross-country
    train routes. 

Ukraine began planting 2020 spring grains.  A senior weather official projected good weather.  Ukraine harvested a record 75.1 million tons of grain in 2019, up from 70 million tons in 2018.  Yesterday Ukraine’s
Deputy Minister projected the Ukraine grain harvest in 2020 to fall to 65-70 million tons from record 75.1 million tons in 2019. 

May Paris wheat futures were down 1.00 at 188.50 euros as of early this morning.

The European Union granted export licenses for 157,000 tons of soft wheat exports, bringing cumulative 2019-20 soft wheat export commitments to 18.715 MMT, up from 11.389 million tons committed at this time
last year, a 64 percent increase.  Imports are down 54 percent from year ago at 3.248 million tons.


Export Developments.

Tunisia’s bought 125,000 tons of optional origin soft milling wheat for shipment between March 15 and May 25.  Lowest offer was $232.92/ton c&f. 

5 companies made offers for Jordan seeking 120,000 tons of wheat for Sep-Oct shipment.

South Korea’s NOFI group bought 60,000 tons of optional feed wheat at around $238.82 a ton c&f for arrival around July 20.

Jordan issued a new import tender for 120,000 tons of feed barley set to close February 26 for June-July 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.



  • The Philippines canceled unused import permit for up to 1 million tons of rice. 


Terry Reilly

Senior Commodity Analyst C 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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