FW: FI Morning Grain Comments 01/30/20

PDF attached

 

Morning.

 

 

 

Weather

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

There
is still not much reason for concern over Brazil summer crop conditions, but Argentina is still a little worry. Argentina is not likely to see failing rainfall over a large enough area to move markets in a big manner especially not with Brazil’s weather so
good.

            Weather
in eastern Australia improved briefly during the weekend, but this week will trend drier again. More showers are expected next week. South Africa will dry down for a while this week raising some potential for mild crop stress especially in western production
areas.

            Southeast
Asia rainfall will be well mixed and mostly supportive of palm oil development. Rain in China and India will be typical of this time of year with winter crops poised for improvement as spring approaches because of recent past precipitation.

           
Southeastern Europe remains too dry, but there is potential for some rain and mountain snow this week from there into Kazakhstan possibly easing long term dryness in Romania, the lower Danube River Basin and parts of Ukraine. The moisture boost will be important
for spring planting and early season winter rapeseed development.

            Overall,
weather today will produce a neutral to slightly bearish bias to market mentality.

 

MARKET
WEATHER MENTALITY FOR WHEAT: 

There
is still no risk of winterkill around the world for the next couple of weeks. That will leave winter crop conditions mostly unchanged. China crops will improve in the spring because of recent precipitation. India’s crops are still expected to yield extremely
well.

There
is still some concern over Morocco weather and the lack of rain in the southwest may harm production. A few other areas in northern Africa will also need some timely rain in February to protect production potentials.

Middle
East wheat conditions are rated favorably, but would benefit from some greater rain. Southeastern Europe, Ukraine, southern Russia and Kazakhstan may get some needed precipitation in the next two weeks to improve soil moisture for spring crop development.
Warm weather will continue to minimize the risk of winterkill and some areas may become snow free.

U.S.
crops are not likely to experience much change in the next two weeks and the same is true for southeastern Canada.

Overall,
weather today will have a neutral bias on market mentality.

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

 

Bloomberg
Ag Calendar

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

US
GDP Annualized (Q/Q) Q4: 2.1% (est 2%, prev 2.1%)

US
GDP Price Index Q4: 1.8% (est 1.8%, prev 1.8%)

US
Personal Consumption Q4: 1.4% (est 2%, prev 3.2%)

US
Core PCE (Q/Q) Q4: 1.3% (est 1.6%, prev 2.1%)

US
Initial Jobless Claims: 216K (est 215K, prevR 223K)

US
Continuing Claims: 1703K (1730K, prevR 1747K)

 

 

 

Corn.

·        
Corn futures are
lower on China feed demand concerns. There was a report 300 million chickens were near death in Hubei due to lockdown.   

·        
USDA export sales were good at 1.235 million tons. 

·        
As of this morning the coronavirus spread to 7700 reported cases and 170 deaths. 

 

Export
Developments

• None
  reported

 

Soybean
complex.

·        
CBOT soybeans
are lower as global commodity markets were under selling pressure overnight.   March soybean oil slipped below 31 cents while meal is trying to hang in there by trading $1.30 lower at the electronic pause.  COFCO asked soybean crushers and rice processors
to resume production to increase supplies. The virus impacted sunflower oil prices. Ukraine prices for sunoil fell to $730-$750/ton from $765-$785 last week. 

·        
USDA export sales were good all around for the exception of soybeans at only 469,700 tons. 

·        
Brazilian real was getting crushed again, now at 4.2494, and pressure is expected to increase from the Brazilian farmer.

·        
Offshore values are leading CBOT soybean oil 81 points lower and meal $0.30 lower.

·        
Rotterdam vegetable oils this morning were down 12 euros for nearby soybean oil positions and 19 euros lower for rapeseed oil. Rotterdam meal when imported from SA were 0.50-4.00 euros lower. 

·        
China is on holiday through Sunday but most normal business will not return until February 10.

·        
China cash crush was last 84 cents per bushel. 

·        
Malaysian palm markets:
 

 

Oilseeds
Export Developments

• Private
  exporters reported to the U.S. Department of Agriculture export sales of 30,000 metric tons of soybean oil for delivery to Egypt during the 2019/2020 marketing year.
• Algeria
  bought about 35,000 tons of soybean meal at $376.25/ton for shipment by March 15. 
  

 

 

Wheat

·        
Wheat is lower on virus fears.

·        
USDA export sales of 646,300 tons were very good. 

·        
March Paris wheat futures were down 1.00 at 191.75 euros as of early this morning. 

·        
Russia plans to set annual quotas for grain exports according to Interfax. The market took note of this but will not matter until next year as no future quota amounts were given and as they already have sought
to impose a quota for this season which are in-line with export forecasts.  Quotas will be determined based on the domestic crop size and domestic demand.

·        
Russia’s AgMin sees the 2020 grain crop reaching 125.3 million tons, up from 120.7MMT in 2019.

·        
Russia reported most of its winter wheat is in good condition. 

 

 

Export
Developments.

• Egypt’s
  GASC seeks 55,000 – 60,000 tons of wheat on Thursday for March 11-25 shipment.  $231.50/ton of French wheat was lowest offer. 
  
• Tunisia
  seeks 75,000 tons of feed barley on Friday. 
• Jordan
  seeks 120,000 tons of wheat on February 4 for August – September shipment. 
  
• Algeria
  seeks 50,000 tons of feed barley on Thursday, valid until Friday, for Feb 16-29 shipment. 
  
• Syria
  seeks 200,000 tons of wheat from Russia on February 17 for shipment within 60 days of contract signing. 
  

 

Rice/Other

• Result
  awaited: 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.
  

 

 

Export Sales Highlights   

This summary is based on reports from exporters for the period January 17-23, 2020. 

Wheat:  Net
sales of 646,300 metric tons for 2019/2020 were down 7 percent from the previous week, but up 49 percent from the prior 4-week average.  Increases primarily for Bangladesh (165,000 MT, including 110,000 MT switched from unknown destinations), Japan (97,900
MT), Mexico (96,600 MT, including decreases of 2,900 MT), Guatemala (92,000 MT), and unknown destinations (60,300 MT, including 10,800 MT switched from Barbados), were offset by reductions for the Dominican Republic (7,400 MT) and Barbados (6,800 MT).  For
2020/2021, total net sales of 1,000 MT were for Peru.  Exports of 218,300 MT–a marketing-year low–were down 58 percent from the previous week and 48 percent from the prior 4-week average.  The destinations were primarily to Mexico (72,200 MT), Japan (59,400
MT), Indonesia (26,500 MT), Thailand (26,200 MT), and Peru (20,600 MT).

Optional Origin Sales:  For 2019/2020, the
current outstanding balance of 56,000 MT is for the Philippines. 

Corn:  Net sales of 1,234,700 MT for 2019/2020
were up 23 percent from the previous week and 99 percent from the prior 4-week average.  Increases were primarily for unknown destinations (345,000 MT), Colombia (228,000 MT, including 110,000 MT switched from unknown destinations and decreases of 2,600 MT),
Mexico (190,200 MT), Guatemala (106,300 MT, including decreases of 100 MT), and Japan (81,400 MT, including 39,400 MT switched from unknown destinations and decreases of 38,000 MT).  For 2020/2021, net sales of 143,600 MT were for Japan (113,900 MT) and Guatemala
(29,700 MT).  Exports of 681,900 MT were up 74 percent from the previous week and 44 percent from the prior 4-week average.  The destinations were primarily to Mexico (277,600 MT), Colombia (242,300 MT), Japan (88,400 MT), Taiwan (21,300 MT), and Nicaragua
(20,900 MT). 

Optional Origin Sales:  For 2019/2020, the
current outstanding balance of 375,900 MT is for South Korea (267,000 MT), Egypt (58,900 MT), and Israel (50,000 MT).

Barley: Total net sales reductions of 11,000
MT for 2019/2020–a marketing-year low–were reported for Japan.  For 2020/2021, total net sales of 9,000 MT were for Japan.  Exports of 900 MT were up noticeably from the previous week and up 53 percent from the prior 4-week average.  The destinations were
Japan (700 MT) and Taiwan (200 MT).  

Sorghum:  Net
sales reductions of 300 MT for 2019/2020 resulting in increases for China (122,300 MT, including 122,000 MT switched from unknown destinations), were more than offset by reductions for unknown destinations (122,000 MT) and Mexico (600 MT).  Exports of 147,400
MT–a marketing-year high–were up noticeably from the previous week and from the prior 4-week average.  The destinations were China (122,300 MT) and Mexico (25,100 MT).   

Rice:  Net sales of 32,700 MT for 2019/2020
were down 58 percent from the previous week and 31 percent from the prior 4-week average.  Increases were primarily for El Salvador (13,000 MT), Japan (4,800 MT), Guatemala (3,500 MT), Honduras (3,000 MT), and Canada (2,700 MT).  Exports of 41,200 MT were
down 43 percent from the previous week and 27 percent from the prior 4-week average.  The destinations were primarily to Mexico (29,100 MT), South Korea (3,600 MT), Saudi Arabia (2,300 MT), Jordan (1,700 MT), and Canada (1,700 MT). 

Exports for Own Account:  For 2019/2020,
the current exports for own account outstanding balance is 100 MT, all Canada. 

Soybeans:  Net sales of 469,700 MT for 2019/2020
were down 41 percent from the previous week and 11 percent from the prior 4-week average.  Increases primarily for China (360,900 MT, including 210,000 MT switched from unknown destinations), Japan (95,700 MT, including 59,000 MT switched from unknown destinations
and decreases of 5,200 MT), Spain (71,400 MT, including 65,200 MT switched from unknown destinations and decreases of 100 MT), the Netherlands (69,100 MT, including 60,000 MT switched from unknown destinations), and Thailand (45,400 MT, including decreases
of 200 MT), were offset by reductions for unknown destinations (370,500 MT) and Mexico (2,200 MT).  For 2020/2021, total net sales of 2,000 MT were for Japan.  Exports of 1,231,200 MT were up 17 percent from the previous week and 11 percent from the prior
4-week average.  The destinations were primarily to China (556,900 MT), Japan (115,200 MT), Saudi Arabia (71,500 MT), Spain (71,400 MT), and Netherlands (69,100 MT). 

Exports for Own Account:  For 2019/2020,
the current exports for own account outstanding balance is 2,100 MT, all Canada. 

Soybean Cake and Meal:  Net sales of 438,800
MT for 2019/2020 were down 32 percent from the previous week, but up 48 percent from the prior 4-week average.  Increases primarily for Ecuador (123,000 MT, including decreases of 7,500 MT), Colombia (74,500 MT, including 10,000 MT switched from unknown destinations
and decreases of 2,400 MT), Guatemala (64,500 MT, including decreases of 2,700 MT), the Philippines (44,600 MT), and Canada (34,000 MT), were offset by reductions for unknown destinations (16,000 MT), Venezuela (2,200 MT), and El Salvador (1,600 MT).  Exports
of 189,200 MT were down 18 percent from the previous week and 9 percent from the prior 4-week average.  The destinations were primarily to Colombia (60,100 MT), the Philippines (51,500 MT), Mexico (18,300 MT), Canada (15,200 MT), and Nicaragua (11,600 MT). 

Soybean Oil:  Net sales of 29,400 MT for
2019/2020 resulting in increases primarily for Peru (11,500 MT), Guatemala (4,500 MT), unknown destinations (4,000 MT), the Dominican Republic (2,400 MT), and South Korea (2,300 MT), were offset by reductions for Canada (300 MT).  Exports of 2,000 MT were
primarily to Mexico (1,600 MT) and Canada (300 MT).

Cotton:  Net sales of 347,100 RB for 2019/2020–a
marketing-year high–were up 13 percent from the previous week and 48 percent from the prior 4-week average.  Increases primarily for China (109,900 RB, including decreases of 17,600 RB), Vietnam (78,400 RB), Pakistan (56,800 RB), Turkey (45,600 RB), and Indonesia
(30,200 RB, including 300 RB switched from Malaysia and 200 RB switched from Japan), were offset by reductions for India (15,100 RB), El Salvador (1,200 RB), Honduras (700 RB), and Malaysia (300 RB).  For 2020/2021, net sales of 50,200 RB were primarily for
China (30,800 RB), Vietnam (8,800 RB), and Pakistan (7,000 RB).  Exports of 327,100 RB were up 16 percent from the previous week and 28 percent from the prior 4-week average.  Exports were primarily to Vietnam (73,600 RB), China (71,400 RB), Pakistan (49,000
RB), Turkey (32,600 RB), and Bangladesh (21,500 RB).  Net sales of Pima totaling 15,800 RB were down 22 percent from the previous week and 16 percent from the prior 4-week average.  Increases were primarily for Vietnam (8,700 RB), Indonesia (4,300 RB), India
(1,800 RB), South Korea (300 RB), and Pakistan (300 RB).  Exports of 12,900 RB–a marketing-year high–were up 98 percent from the previous week and from the prior 4-week average.  The primary destinations were Vietnam (3,500 RB), India (2,800 RB), China (2,800
RB), Pakistan (1,300 RB), and El Salvador (1,300 RB).

Exports for Own Account:  For 2019/2020,
new exports for own account totaling 27,100 RB were to Vietnam (22,600 RB), Bangladesh (2,600 RB), and China (1,900 RB).  Exports for own account totaling 10,900 RB primarily to Vietnam (5,600 RB), South Korea (2,300 RB), and Bangladesh (2,200 RB) were applied
to new or outstanding sales.  The current exports for own account outstanding balance of 43,400 RB is for Vietnam (22,900 RB), Bangladesh (8,300 RB), India (7,800 RB), and China (4,400 RB).

Hides and Skins: Net
sales of 340,100 pieces reported for 2020.  Whole cattle hide sales totaling 319,500 pieces primarily for China (174,000 pieces, including decreases of 11,800 pieces), Mexico (72,500 pieces, including decreases of 400 pieces), South Korea (34,200 pieces, including
decrease of 1,900 pieces), Thailand (22,300 pieces, including decreases of 1,200 pieces), and Indonesia (11,600 pieces, including decreases of 500 pieces), were offset by reductions primarily for Brazil (2,300 pieces).  Exports of 421,300 pieces were reported
for 2020.  Whole cattle hide exports of 415,500 pieces were primarily to China (263,600 pieces), South Korea (56,500 pieces), Mexico (38,600 pieces), Thailand (23,300 pieces), and Indonesia (12,600 pieces). 

 

Net sales of 133,000 wet blues
for 2020 primarily for Vietnam (47,800 unsplit and 200 grain splits), China (36,000 unsplit), Thailand (30,900 unsplit, including decreases of 100 grain splits), and Italy (8,400 unsplit and 6,500 grain splits), were offset by reductions primarily for India
(1,600 grain splits).  Exports of 124,600 wet blues were to Italy (38,600 unsplit), Vietnam (30,200 unsplit and 1,400 grain splits), China (30,500 unsplit), Thailand (15,000 unsplit and 1,500 grain splits), and Brazil (3,200 unsplit). Net
sales reductions of splits, 16,800 pounds for 2020 resulting in increases for China (3,200 pounds) and South Korea (1,600 pounds), were more than offset by reductions for Vietnam (21,600 pounds).  Total exports of 239,800 pounds were to Vietnam.

 

Beef: Net
sales of 21,700 MT for 2020 were primarily for Japan (6,400 MT, including decreases of 400 MT), South Korea (4,500 MT, including decreases of 500 MT), Canada (3,500 MT, including decreases of 100 MT), Hong Kong (2,600 MT, including decreases of 100 MT), and
Taiwan (1,700 MT, including decreases of 200 MT).  Exports of 16,600 MT were primarily to
Japan (5,300 MT), South Korea (4,300 MT), Mexico (2,100 MT), Taiwan (1,300 MT), and Hong Kong (1,200 MT).   

Pork: Net
sales of 34,100 MT for 2020 were primarily for Japan (11,000 MT), Mexico (7,500 MT), South Korea (5,100 MT), Canada (3,500 MT), and China (1,500 MT).  Exports of 43,600 MT were primarily to China (18,600 MT), Mexico
(10,800 MT), Japan (4,500 MT), South Korea (2,800 MT), and Canada (2,300 MT). 

January 30, 2020                                        1                                       FOREIGN AGRICULTURAL SERVICE/USDA

                                                                                                SUMMARY OF EXPORT TRANSACTIONS
                                                                                 REPORTED UNDER THE DAILY SALES REPORTING SYSTEM
                                                                                                FOR PERIOD ENDING JANUARY 23, 2020

COMMODITY                                            DESTINATION                                                                  QUANTITY (MT)                                             
M ARKETING

CORN                                                         UNKNOWN                                                                       283,428 MT 1/                                                  
2019/2020

CORN                                                         GUATEMALA                                                                    114,224 MT 1/                                                  
2019/2020

CORN                                                         GUATEMALA                                                                      29,724 MT 1/                                                  
2020/2021

CORN                                                          JAPAN                                                                               111,252
MT 1/                                                   2020/2021

 

1/ Export sales. 

                                                                             

 

U.S. EXPORT SALES FOR WEEK ENDING 1/23/2020    

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	291.8	1,824.5	1,808.2	76.3	5,901.5	3,770.6	0.0	80.9
SRW	14.7	409.4	886.1	42.6	1,735.1	1,391.0	1.0	5.2
HRS	213.3	1,589.9	1,511.3	54.0	4,427.6	3,992.9	0.0	59.0
WHITE	126.5	1,209.5	1,167.2	45.5	3,015.5	2,961.6	0.0	20.9
DURUM	0.0	190.4	89.9	0.0	623.8	330.0	0.0	61.0
TOTAL	646.3	5,223.6	5,462.7	218.3	15,703.6	12,446.1	1.0	226.9
BARLEY	-11.0	17.9	30.9	0.9	30.8	27.4	9.0	9.0
CORN	1,234.7	11,034.5	13,020.8	681.9	10,508.3	19,266.6	143.6	1,168.2
SORGHUM	-0.3	360.8	119.2	147.4	779.4	357.4	0.0	0.0
SOYBEANS	469.7	6,215.9	12,517.2	1,231.2	25,457.2	17,851.9	2.0	306.3
SOY MEAL	438.8	3,623.4	3,936.1	189.2	3,445.3	2,973.6	0.0	87.3
SOY OIL	29.4	224.6	210.7	2.0	324.7	195.2	0.0	0.5
RICE
L G RGH	19.5	337.4	222.9	27.9	709.3	564.4	0.0	0.0
M S RGH	0.0	18.8	4.5	0.5	16.5	23.1	0.0	0.0
L G BRN	0.1	21.8	5.2	0.1	20.4	24.7	0.0	0.0
M&S BR	0.1	69.1	95.2	2.0	21.0	45.3	0.0	0.0
L G MLD	4.8	138.4	141.8	2.3	537.1	371.8	0.0	0.0
M S MLD	8.2	132.1	217.3	8.3	303.9	191.2	0.0	0.0
TOTAL	32.7	717.6	687.0	41.2	1,608.2	1,220.5	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	347.1	7,466.0	7,305.9	327.1	5,048.3	3,572.9	50.2	1,080.8
PIMA	15.8	224.4	294.6	12.9	199.6	172.6	0.0	35.3