From: Terry Reilly
Sent: Monday, December 30, 2019 8:07:08 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 12/30/19

PDF attached




COT will be out this afternoon.





Argentina’s dry areas saw much need rain over the weekend, from Buenos Aires to southern Cordoba and northeastern La Pampa and from northern Cordoba to western Santiago del Estero.

Eastern, central and parts of western Kansas as well as western Oklahoma saw good precipitation over the weekend, which was needed.  Far western KS and eastern Colorado picked up on light precipitation and
more is needed to boost soil moisture levels.  The weekend storm was not as heavy as expected in terms of snowfall coverage, so there is still some concern lack of snowfall coverage may leave poorly established HRW wheat across the central US Great Plains
vulnerable to cold snaps.  The central Great Plains will see additional snow events in January. No extreme cold threat is expected through January 6.

Rain and thunderstorms occurred elsewhere in the Midwest

World Weather Inc. and FI


World Weather Inc.


America weather will be mostly good over the next two weeks. Recent rain in the previously dry areas of Argentina is improving recently planted crop emergence and establishment while crops planted earlier in the year likely experienced some stress relief and
this trend may continue for a while as additional showers and thunderstorms occur in many areas. The northeast will be driest

weather will continue favorably mixed, although a close watch on the south is warranted due to net drying over the next ten days. Dryness will have to breakdown later in January to protect production potentials.

the meantime, recent rain in southern Sumatra and western and central Java and has been improving soil moisture for better oil palm production potentials in 2020. The rain must be sustainable over multiple weeks and it looks like that may be the case.

Africa crop weather will remain varied offering some timely rainfall to many areas, but frequent follow up rain will be needed to seriously change crop moisture and development potential. Some areas may not get enough rain to counter evaporation in the next
two weeks while others will.

will get some additional rain in the central and east this week benefiting some summer crops. Timely precipitation has occurred in many other areas and more is expected later in January to support good yields.

crops in China and Europe are semi-dormant and mostly in good shape. Rain in China this winter will help to improve soil moisture for better winter rapeseed establishment prior to reproduction in the spring.

Late season farming activity in the United States will not advance very well for a while, but that is no change from last week’s weather outlook.

weather today will provide a neutral to slightly bearish bias to market mentality.



in the U.S. hard red winter wheat production region during the weekend bolstered topsoil moisture for improved wheat establishment in the spring. Additional moisture will be needed periodically through the winter to ensure the best crop development potential.

rain in the U.S. Midwest and snow in the southeastern Canada will leave those wheat areas plenty wet for spring fieldwork.

crop conditions in China may improve if precipitation falls as expected this week and next week. The moisture will fall in areas that were a little dry in the autumn. Improvements in wheat establishment prior to reproduction cannot occur until warmer weather
comes along in the spring, but the moisture should still be available to crops unless a warm and dry finish to winter and start to spring takes place.

India wheat production areas will receive some welcome precipitation this week further ensuring high yields this winter.

in Europe and the western CIS are dormant and mostly in fair to good shape. Dryness in the autumn left many crops in southeastern Europe, including Ukraine, and Kazakhstan with poor emergence and establishment. Timely rain and seasonable temperatures will
be needed in the spring. Until then, snow is needed to protect poorly established crops from any harsh or extreme weather that suddenly evolves. There is no threat of damaging cold for the next two weeks

North Africa wheat is in fair to good shape. Crops in southwestern Morocco are not well established and need timely rain in the next few weeks to induce better establishment prior to reproduction.

harvesting was disrupted during the weekend by some rain and additional precipitation periodically into next week will likely perpetuate this concern, although more than 80% of the wheat crop has been harvested. Barley has not been harvested as well.

weather today will likely provide a bearish bias to market weather mentality.

World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI


Ag Calendar

Dec. 30:

  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • CFTC
    commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm


  • AmSpec
    releases Malaysia’s Dec. 1-31 palm oil export data, 10pm Monday (11am Kuala Lumpur); SGS data due at 3pm KL

Jan. 1:

  • Nothing
    major scheduled

Jan. 2:

  • Australia
    commodity index
  • USDA
    Soybean crush, DDGS production, corn for ethanol, 3pm

Jan. 3:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, 8:30am
  • EIA
    U.S. weekly ethanol inventories, production, 11am
  • ICE
    Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions ~1:30pm (~6:30pm London)

Bloomberg and FI






Bloomberg Bull/Bear survey report:

Soybeans: Bullish: 11 Bearish: 3 Neutral: 5

Corn: Bullish: 10 Bearish: 3 Neutral: 6

Wheat: Bullish: 8 Bearish: 5 Neutral: 6

Raw sugar: Bullish: 4 Bearish: 0 Neutral: 3

White sugar: Bullish: 4 Bearish: 0 Neutral: 3

White-sugar premium: Bullish: 2 Bearish: 1 Neutral: 4






CBOT corn
a 7-week high on Friday and its higher on Monday.  Trade optimism is the underlying reason. 

The northern and parts of the central Great Plains and far northwestern Corn Belt saw a large storm system over the weekend that impacted travel and increased livestock stress, but at the same time provided
beneficial moisture to the growing regions. 

There are conflicting weather forecasts for southern Brazil. Southern Brazil will see drought like conditions through the 10th of January, according to one weather person, stressing corn and soybeans. 
Temperatures will remain hot.  But much of the area will not be completely dry. World Weather indicated “Southern Brazil should get some timely rainfall to prevent dryness from becoming an issue in the next two weeks…All of Brazil will see timely rain, although
Paraguay and southwestern Mato Grosso do Sul will be left in a drying mode this week before relief comes next week.” 

USDA radio talked about a recent US ethanol delegation’s trip to Mexico, a market that could be very lucrative for the US.  Related reading on US corn S&D:

China will soon release frozen pork, frozen beef and mutton from reserves, and increase imports of pork, all ahead of the China New Year starting January 25.  January through November China’s pork imports
were up 57.9% from a year earlier to 1.7 million tons.

Vietnam’s General Statistics Office reported the hog population in December declined 26 percent from year ago, largest monthly decline during the span of nine consecutive months of it falling.  ASF was first
discovered on Feb. 1 and since then, it led to culling of six million pigs through mid-December. 

The weekly USDA Broiler Hatchery report showed broiler type eggs set in the US up 4 percent from year ago and chicks placed down 1 percent.  Cumulative placements from the week ending January 5, 2019 through
December 21, 2019 for the United States were 9.47 billion. Cumulative placements were up 2 percent from the same period a year earlier.

EIA reported US ethanol production for the week ending 12/20 at 1.083 million barrels, up 19,000 barrels from the previous week, well above a Bloomberg average of 1.064 million, and largest since June 7, 2019. 
September to date ethanol production is running 2.4 percent below the same period year ago.  Stocks of 21.469 million were 329,000 barrels below the previous week and lowest in four weeks.  The poll called for a 70,000 barrel increase.  There were no imports
last week.  The ethanol blend rate into finished motor gasoline was running at 90.4 percent, above 89.7 percent last week. 





CBOT soybean

futures are higher on Monday following strength in soybean oil and ideas China will buy more US soybeans after renewing 10 GMO variety strains and approving 2 new import varieties.  However, China is making a move to approve GMO seeds for commercial production. 
Soybean meal is led higher by direction in offshore values and soybean oil is up on sharply higher Malaysian palm and China vegetable oil futures. 

APK-inform reported Ukraine sunflower exports as of late December increased 44% to 1.585 million tons so far this season from 1.099 million during the same period a year ago.

Commitment of Traders will be out later today and we estimate the managed money futures and options net long position in soybean oil at net long 106,000 contracts.  Record net long is 126,543 contracts established
November 2016. 

Last we heard IL SBO was 50 over (crude), east 75 over, west option, and Gulf 280 over.  Meanwhile Brazil fob 305 over and Argentina 325 over. 

  • Rotterdam
    vegetable oils this morning were unchanged for nearby soybean oil positions and 2 higher for rapeseed oil. Rotterdam meal when imported from SA were mostly 2 euros euros lower. 

Offshore values are leading CBOT soybean oil 1 point1 lower and meal $3.00 higher.  

China cash crush was last 141 cents per bushel, compared to 131 on Friday and 11 cents year ago. 


3-year high: Malaysian palm markets:


Export Developments


prices have been rallying along with soybeans, but large Canadian supplies have widened the spread against EU rapeseed

Refiniv and FI          



are higher on follow through bullish optimism China will buy US wheat in 2020, and rising Black Sea wheat prices. 

Eastern, central and parts of western Kansas as well as western Oklahoma saw good precipitation over the weekend, which was needed.  Far western KS and eastern Colorado picked up on light precipitation and
more is needed to boost soil moisture levels.  The weekend storm was not as heavy as expected in terms of snowfall coverage, so there is still some concern lack of snowfall coverage may leave poorly established HRW wheat across the central US Great Plains
vulnerable to cold snaps.  The central Great Plains will see additional snow events in January. No extreme cold threat is expected through January 6.

Russian 12.5% protein wheat from Black Sea January delivery increased $2 per ton to $218according to SovEcon.  IKAR reported unchanged at $218 per ton.

March Paris wheat futures earlier were up 0.50 at 189.50 euros.

Egypt said they have enough strategic reserves of wheat for five months

Ukraine’s Ministry for Development of Economy, Trade and Agriculture reported grain exports as of late December increased 32.5% to 30 million tons since July 1, fueled by higher corn and wheat exports.  Wheat
export are 4.2 million tons higher to 14.6 million tons.  Ukraine also exported 3.7 million tons of barley and 11.4 million tons of corn.



March Chicago wheat

Source: Refiniv and FI          



  • Jordan seeks 120,000 tons of wheat on January 7.
  • Morocco seeks to import about 355,000 tons of US durum wheat on January 9 for arrival by May 31.
  • Mauritius seeks 95,000 tons of optional origin wheat flour on Jan. 10, 2020, for shipment between
    July 1, 2020, and June 20, 2021. 

Syria seeks 200,000 tons of soft wheat from Russia on January 20, 2020. 



Details of the tender are as follows:


         3,000     Milled Long     April 30, 2020/Busan

        17,000     Milled Medium   June 30, 2020/Busan

        22,222     Brown Medium    June 30, 2020/Busan

  • Syria seeks 45,000 tons of white rice on Jan. 6, 2020.  (Reuters) Short grain white rice of third
    or fourth class was sought. No specific country of origin was specified in the tender, traders said.  Some 25,000 tons was sought for supply 90 days after confirmation of the order and 20,000 tons 180 days after supply of the first consignment.  The rice was
    sought packed in bags and offers should be submitted in euros.  A previous tender from the agency for 45,000 tons of rice with similar conditions had closed on
    Nov. 13.


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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