FW: FI Morning Grain Comments 01/27/20

PDF attached

 

Morning.
Coronavirus
fears are driving commodities lower.  CNN has a live update page, along with other major news outlets. 
https://www.cnn.com/asia/live-news/coronavirus-outbreak-01-27-20-intl-hnk/index.html

 

 

 

Weather

• Argentina
  weather will be the center of market attention over the coming week to ten days
  • Net
    drying is still advertised by the GFS forecast model in much of the nation, but the European and Canadian Models are not in agreement
    • Both
      the European and Canadian Models suggest some improved opportunity for rain will come along during the weekend and next week
      • The
        rain expected will be erratic, but more beneficial than that advertised by the GFS model which downplays rainfall in the south half of the nation in particular for ten days and perhaps longer
    • Earlier
      this year in a similar setting the European model beat the GFS model numerous times with its greater rainfall forecast and World Weather, Inc. believes predicted rainfall in the next two weeks will be another one of those times
  • Argentina
    will receive some erratic rainfall this week and it will be difficult for a net increase in soil moisture to result
    • Rising
      temperatures and erratic rainfall will accelerate drying rates and raise some crop moisture stress in time
    • Rain
      during the weekend and next week should be better timed offering some important moisture that will not be uniform across the nation, but will help slow drying rates and may improve crop conditions in some areas
• Argentina’s
  bottom line
  is that rain will be very important over the next couple of weeks to slow drying rates and conserve subsoil moisture so that crop stress does not become overwhelming to plants that are reproducing and filling. Yield potentials might be at risk if rain fails
  to be well distributed over the next two weeks, but World Weather, Inc. believes those areas of crop production risk will be pocketed leaving many crop areas still in favorable condition. The nation’s summer crops will need to be closely monitored over the
  next two weeks because of the erratic rainfall distribution and warm weather that will prevail.
  

 

• Argentina
  was mostly dry and warm during the weekend
  with highs in the 90s Fahrenheit and a couple of extremes near 100 degrees
• Brazil
  temperatures were more seasonable during the weekend, but western and southern areas were just as dry as those areas in Argentina
  • No
    rain fell in western Mato Grosso or areas southward through most of Mato Grosso do Sul to western and southern Sao Paulo, Santa Catarina, Parana, Santa Catarina and Rio Grande do Sul
  • Rain
    was reported in most other areas with significant amounts from eastern Mato Grosso and Tocantins through Goias to the heart of Minas Gerais and immediate neighboring areas where 1.25 to 3.25 inches occurred often with local totals to more than 6.00 inches
    in central Minas Gerais

 

• Brazil
  rainfall over the next ten days will be a little light and infrequent in Rio Grande do Sul, but timely and beneficial to most of western and interior southern parts of the nation
  • Rio
    Grande do Sul will get some light rain Wednesday into Thursday with rainfall of 0.20 to 0.75 inch and a few totals over 1.00 inch
    • Most
      other days in the 10-day forecast period will not bring rain to Rio Grande do Sul
    • Rainfall
      of 0.75 to 3.00 inches will occur in other areas with southern Mato Grosso and northern Mato Grosso do Sul seeing the lightest rainfall
      
  • All
    other areas in Brazil will receive 1.00 to 3.00 inches of rain in the coming ten days with a few totals of 3.00 to 4.00 inches
    
  • The
    European model forecast generates more rain in Rio Grande do Sul than the GFS and if correct there would not be much serious concern for crops in Rio Grande do Sul – or for that matter in most of Brazil
  • Brazil’s
    bottom line
    still looks very good for most of the nation with timely rainfall and seasonable temperatures over the next two weeks. That will maintain good conditions for high yields and record or near-record production of soybeans. The rain might slow harvesting of early
    soybeans briefly, but farmers will advance with the harvest around the precipitation

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

MONDAY,
JAN. 27:

• USDA
  weekly corn, soybean, wheat export inspections, 11am
• MARS
  crop bulletin – monthly report on crop conditions in Europe.
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  China, Australia, Hong Kong, Malaysia, Singapore

TUESDAY,
JAN. 28:

• AmSpec,
  Intertek, SGS: Malaysia’s Jan. 1-25 Palm Oil Exports, Kuala Lumpur
• HOLIDAY:
  China, Hong Kong

WEDNESDAY,
JAN. 29:

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

THURSDAY,
JAN. 30:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, 8:30am
• GUS
  Polish pig population data, Warsaw
• HOLIDAY:
  China

FRIDAY,
JAN. 31:

• 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
• U.S.
  agricultural prices paid and received, cattle inventory
• Paris
  Grain Day conference. Topics include outlook for Black Sea/Europe grains and challenges facing the oilseed market
• AmSpec,
  Intertek, SGS: Malaysia’s Jan. 1-31 Palm Oil Exports, Kuala Lumpur

Source:
Bloomberg and FI

 

No
changes in CBOT registrations

 

 

 

 

Macros

 

 

Corn.

·        
Corn futures are
lower on fears the virus spreading across China will disrupt feed demand. 

·        
President Trump is expected to sign the USMCA on Wednesday. 

 

Export
Developments

• Under
  the 24-hour reporting system, private exporters sold 111,252 tons of corn for delivery to Japan during the 2020-21 marketing year.

 

Soybean
complex.

·        
CBOT soybean complex is taking a hit on virus fears. 
2700+
cases and 80+ perished. 

·        
Brazilian real was weaker at 4.2148.  USD was up 3.  

·        
Ukraine sunflower exports were up 60 percent so far this season to nearly 2.0 million tons, according to APK-Inform. 

·        
Offshore values are leading CBOT soybean oil 18 points lower and meal $1.00 lower.

·        
Rotterdam vegetable oils this morning were down 14 euros for nearby soybean oil positions and 10 euros lower for rapeseed oil. Rotterdam meal when imported from SA were unchanged to 4 euros lower. 

·        
China is on holiday until late this week. China cash crush was last 84 cents per bushel. 

·        
Malaysian palm markets:
 Holiday
– no trade

·        
ITS reported palm exports during the Jan 1-25 period at 1.022 million tons, down 1.3 percent from the previous period a month earlier. 

·        
There are reports that India palm oil imports from Malaysia for the month of January could hit a 9-year low. 

 

Oilseeds
Export Developments

• None
  reported

 

Wheat

·        
In a risk off session, US and Paris wheat futures are lower this morning. 

·        
March Paris wheat futures were down 2.75 at 192.75 euros as of early this morning. 

·        
Last week China bought 150,000 tons of wheat from Australia, which was a surprise to many traders. 

·        
Egypt said they enough wheat reserves through the end of June. 

 

Export
Developments.

·        
Saudi Arabia’s Saudi Grains Organization (SAGO) bought 900,000 tons of animal feed barley at an average price of $224.45/ton.

• Jordan
  seeks 120,000 tons of wheat on January 28. 
• Japan
  seeks 120,000 tons of feed wheat and 200,000 tons of feed barley on January 29 for arrival by March 19. 
  

 

Rice/Other

• South
  Korea seeks 77,778 tons of non-glutinous brown rice for arrival between March and May, on Jan. 30.  Details of the tender are as follows:

   
TONNES(M/T)  GRAIN TYPE    ORIGIN    ARRIVAL/PORT

       
20,000   Brown Short   China     March 15-31/Gunsan

       
20,000   Brown Short   China     April 30/Masan

       
15,556   Brown Short   China     May 31/Donghae

       
22,222   Brown Medium  U.S.      May 31/Incheon

• Mauritius
  seeks up to 6,000 tons of long grain white rice on Feb. 3, optional origin, for delivery between May 1 and July 31.