FW: FI Morning Grain Comments 01/07/20

PDF attached

 

Morning. 

 

 

 

Weather

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

Weather
conditions in many Brazil and Argentina crop areas will be favorable over the next two weeks, although a close watch on the rain distribution is warranted. A few pockets could be a little too dry. Northern Argentina and a few areas in Paraguay and southern
Brazil will be drier biased for a while this week, but relief should come around in time. A greater soaking of rain will be needed. Today’s rain in southwestern Argentina will maintain excellent crop conditions in that region.

            South
Africa summer crop conditions should be largely beneficial over the next couple of weeks. Australia crops will continue hot and too dry for change, although it would not be surprising to see some rain in eastern parts of the nation later this month.

            India’s
winter crops are in very good condition and should remain that way for the next two weeks. Summer crop harvesting will continue around brief periods of rain.

            China
rapeseed conditions will have potential for improvement in the spring after this week’s storm system impacts the production region. A follow up storm system will see to it the region is plenty moist in the spring.

            Europe
and the southwestern parts of the CIS will dry out for a while, but winter crops are dormant or semi-dormant and will not be bothered. A boost in precipitation will be needed in the late winter prior to the start of spring growth.

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

 

MARKET
WEATHER MENTALITY FOR WHEAT:  Winter
crop conditions around the world are either fair to good or improving. Recent moisture in the United States will be good for spring crop development. Snow will develop in the northwestern U.S. Plains before bitter cold conditions evolve in the next week to
ten days.

            There
is no risk of crop threatening cold in Russia, Europe or most of China’s key winter crop production areas for the coming week to ten days. Winter crops are not as well established as they should be in some areas of southeastern Europe, southern Russia or Kazakhstan.
Weekend precipitation in eastern China will improve wheat establishment in the spring.

India’s
winter crops are poised to perform quite well this year and rain in Pakistan will improve the outlook there as well. China’s precipitation today and that coming over the next week will improve spring crop development potential.

            Dryness
in northern Africa will be closely monitored with southwestern Morocco the only area at risk of lower production today but drying in northern Morocco and northwestern Algeria will continue for a while.

            Overall,
weather today will likely produce a mixed influence on market mentality.

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

 

Bloomberg
Ag Calendar

TUESDAY,
JAN. 7:

• New
  Zealand global dairy trade auction

WEDNESDAY,
JAN. 8:

• Conab
  releases 4th estimate for Brazil’s soy, corn crops

THURSDAY,
JAN. 9:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, 8:30am
• Port
  of Rouen data on French grain exports
• United
  Nation’s FAO Food Price Index
• Australia’s
  Bureau of Meteorology releases climate statement
• New
  Zealand commodity price

FRIDAY,
JAN. 10:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, noon
• Malaysia
  end-2019 palm oil stocks, production, export numbers; Jan. 1-10 palm oil export data from AmSpec, Intertek and SGS
• U.S.
  winter wheat seeding forecast
• USDA
  quarterly wheat, barley, corn, soybean stocks, noon
• 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

Source:
Bloomberg and FI

 

 

 

 

 

 

USDA
inspections versus Reuters trade range                                            

Wheat      
345,109     versus  300000-500000           range

Corn         
550,930     versus  400000-600000           range

Soybeans  
963,830     versus  500000-1000000         range

 

CFTC
Commitment of Traders

 

 

 

 

 

 

Macros.

US
Trade Balance (USD) Nov: -43.1B (est -43.7B ; prevR -46.9B ; prev -$47.2B)

US
Good Trade Balance (USD) Nov:  -62.99B (prev -63.19B)

 

 

Corn.

·        
Corn futures are lower on Tuesday as traders shore up positions ahead of the reports due out this week. 

·        
Baltic Dry Index fell another 6.3 percent or 53 points to 791.

·        
Gold was down about $1.20 as of 7:23 am CT and Dow futures up 14 points. 

·        
USD was 15 points higher as of 7:23 am CT and WTI down 49. 

·        
Corn and Soybean Advisory: 2019/20 Brazil Corn Estimate lowered 1.0 mt to 101.0 Million Tons

·        
USDA US corn export inspections as of January 02, 2020 were 550,930 tons, within a range of trade expectations, above 408,946 tons previous week and compares to 501,565 tons year ago. Major countries included
Mexico for 257,383 tons, Colombia for 156,462 tons, and Japan for 89,779 tons.

 

Export
Developments

• India’s
  MMTC delayed their import tender for 175,000 tons (50k previously) of non-GMO corn from Jan 2 to January 7,
  for shipment by February 10. Another source put shipment by Jan 22. 

 

 

Soybean
complex.

·        
Soybeans are
lower in a risk off session.  USDA is set to release their annual crop production report on Friday.  Cash market seems to be a little weak and USD is higher. 

·        
Corn and Soybean Advisory: 2019/20 Brazil Soybean Estimate Lowered 1.0 mt to 122.0 Million

·        
Rotterdam vegetable oils this morning were unchanged for nearby soybean oil positions and 1 euro lower for rapeseed oil. Rotterdam meal when imported from SA were mostly unchanged. 

·        
Offshore values are leading CBOT soybean oil 49 points higher and meal $1.30 lower.  

·        
China cash crush was last 139 cents per bushel, compared to 145 on Friday and 24 cents year ago. 

·        
China:

·        
Malaysian palm markets:
 

·        
A group in India is campaigning palm oil end users to stop importing palm oil from Malaysia. 

·        
USDA US soybean export inspections as of January 02, 2020 were 963,830 tons, high end a range of trade expectations, below 991,801 tons previous week and compares to 682,518 tons year ago. Major countries
included China Main for 353,715 tons, Egypt for 128,501 tons, and Indonesia for 93,074 tons.  Crop year to date (September – January 3) inspections for soybeans are running near 22.2 million tons, above 17.5 million tons year ago and 29.8 million tons during
the same period in 2017-18.  If you take out China, shipments to other countries fell 26 percent from the same period year earlier.  Shipments to China total 9.6 million tons, up from 475,000 year ago and below 20.5 million tons during the same period in 2017-18. 

 

Oilseeds
Export Developments

• USDA
  CCC seeks 14,650 tons of packaged vegetable oils for export to Yemen on January 7 with shipment February 1-29 (Feb. 16-Mar. 15 for plants at ports). 
  

 

Wheat

·        
US wheat futures are
lower on lack of fresh news despite traders looking for a lower 2020 US winter wheat area.   

·        
March Paris wheat futures earlier were unchanged at 188.25 euros as of early this morning.

·        
USDA US all-wheat export inspections as of January 02, 2020 were 345,109 tons, within a range of trade expectations, above 312,090 tons previous week and compares to 263,918 tons year ago. Major countries
included Nigeria for 74,002 tons, Philippines for 64,255 tons, and Malaysia for 54,209 tons.

 

Export
Developments.

• Jordan
  passed on 120,000 tons of wheat.
• Zimbabwe
  imported 30,000 tons of wheat from Argentina. 
• Japan
  seeks 106,125 tons of wheat on Thursday.

• Results
  are awaited on Ethiopia in for 80,000 tons of durum wheat and another 75,000 tons of soft wheat.
  
• Morocco seeks to import about 354,000
  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. 
  
• Turkey seeks 550,000 tons of red milling
  wheat on January 14, minimum protein content of 13.5% for January 21-February 15 shipment. 
  
• Turkey seeks 100,000
  tons of durum wheat on January 14 for Jan 25-Feb 25 shipment.

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

 

Rice/Other

• Results awaited: 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.
• Results awaited:
  South
  Korea seeks another 30,764 tons of rice on Jan 7 for Sep-Oct arrival. 

Details of
the new tender are as follows:

    TONNES(M/T) 
GRAIN TYPE      ARRIVAL/PORT

        20,000  
Brown Medium    Sept.1-Oct.31,2020/Busan

        10,764  
Brown Medium    Sept.1-Oct.31,2020/Gwangyang