Corn and Soy Morning Update & Commentary: Overnight, both the corn and soy markets were mostly quiet, finishing steady-to-slightly-lower by the AM break. Beans put in a six cent range, but spent it straddling unchanged. For the week, beans are sporting.....
Corn and Soy Morning Update & Commentary: Overnight, both the corn and soy markets were mostly quiet, finishing steady-to-slightly-lower by the AM break. Beans put in a six cent range, but spent it straddling unchanged. For the week, beans are sporting respectable fourteen cent gains, while corn is eyeing a three cent loss; meal is currently on track to finish a little higher and oil a little lower. Three-day weekend coming up, with markets closed Sunday/Monday, re-opening Monday evening. By that time, the "Phase One" agreement will have officially come into force. Whether it generates any business remains to be seen, but where there is smoke, there is often fire, and bean spreads have been strong this week, amid rumors of PNW bean trades (likely to China). Pork, beef, and ethanol, are likely closer to the top of China's shopping list than U.S. corn? Markets will also keep half-an-eye on USDA baseline data, due later this morning (rarely a market-mover); USDA Outlook Forum is at the end of next week, and the bean markets will get a NOPA crush report Tuesday. Trade estimates continue to trickle out of South America - Agroconsult set a new high bar on Brazil soy output, pegging it at 126.3 mmt, which compares to most around the 123-125 mark, and the USDA itself at 125 mmt. Despite this record production, they see Brazil bean exports dropping 3 mmt yr/yr to 73, as China will likely be obliged to pick up more U.S. supply to fulfill 'Phase One' commitments. Argy corn estimates are generally coming in around the 49-50 mmt, particularly with the recent shift to better weather. Brazil soy harvest delays will likely be the chief weather point to watch going forward, both in terms of Brazil soy basis (which has been inching higher) and safrinha corn planting.
Choppy trade continued in corn Thursday, while beans have shown a little more oomph. March Corn followed up a decent Wed recovery effort with a three cent dipsy-doo, though this was more a spread deal (July finished 1 ½ lower, Dec a penny lower). Beans finished a few cents better up-front, though the market did come off its highs late in the day. The more dynamic (for good or ill) oil market gained on subdued meal. Funds are short corn, meal, and beans, while still clinging to a modest long in bean oil, despite a 20% beginning-of-year shake-out. The weekly export sales report this morning was 'good', but not 'as good' as the past few weeks, while beans were a little disappointing. 968,800 metric tons in fresh corn sales were reported; this was 22% lower than the prior week and snapped a string of three 1+ mmt sales weeks. Still, it was well above the marketing year average. Soybean sales barely squeaked in at the low-end of expectations at 645,000 metric tons; meal sales were unremarkably good at 234k, while oil sales were a highlight at 39,100 (vs. expectations of 25k). Overall, corn sales have the toughest road to hoe with a sluggish start to the marketing year, but arguably have the best path to pick up some fresh biz in the second-half. Soybean sales are running ahead of last year (33 mmt vs. 30.4 last year), but will face stiff competition going forward from a record bean harvest in Brazil. U.S. Dollar also at a multi-month high as we write, while the Brazilian Real tries to stop the proverbial bleeding as it plumbs record lows. That will also remain a thorn in the side of U.S. exporters.
QT News - Top News
-- Grain traders Friday reported around 35,000 mt of optional origin Corn was bought by Algeria in their tender that closed today. Prices were said to be near the low end of the range of prices, around $194.75/mt cif.
-- On Friday, China's state planning commission said it has sold 1.32 mln mt of Corn to southern province feed mills, adding some 23 feed manufacturers from Hubei province participated in the auction.
-- China's Commerce Ministry Friday said the central commodity reserve system released 14,000 mt of Pork to ensure market supplies. Analysts noted during January pork prices jumped +116% over the year ago month levels.
-- USA Poultry & Egg Export Council recently noted, due to coronavirus outbreak in China, refrigerated US chicken cargoes are being diverted to other Asian ports. Chinese consumption has slowed as workers stay at home, and demand at restaurants and food stores have dwindled. Also Chinese officials are giving port work preference to incoming medical supplies and pork imports to meet demand.
-- Favorable winter weather conditions in France have helped farmers plant 16% of the expected spring Barley crop as of February 10th, according to data released by France AgriMer. Last week 14% of the crop had been planted, and in the year ago week 12% of the crop had been planted.
-- France AgriMer data Friday pegged winter Barley conditions at 67% good to excellent, unchanged from the prior week, but that was off from the 79% in the year ago month.
-- On Thursday, Buenos Aires Grain Exchange weekly report pegged 19/20 Corn crop conditions 62% good to excellent, 36% fair, 2% poor to very poor, that compares to last week's 59% good to excellent, 30% fair, 3% poor to very poor.
-- Buenos Aires Grain Exchange report Thursday pegged the 2019/2020 Argentina Corn harvest at 49.0 mln mt
-- On Thursday, Buenos Aires Grain Exchange weekly report pegged 19/20 Soybean crop conditions 71% good to excellent, 29% fair, that compares to last week's 70% good to excellent and 30% fair.
-- On Thursday, Buenos Aires Grain Exchange weekly report pegged 19/20 Sunflower crop conditions 58% good to excellent, 38% fair, 4% poor to very poor, that compares to last week's 50% good to excellent, 46% fair, 4% poor to very poor.
-- Grain trade sources Thursday indicated Informa kept their expected 2020 US corn acres unchanged at 93.442 mln acres, and expected 2020 US soybean also unchanged at 86.500 mln acres
-- On Friday, the Malaysian Primary Industries minister said his government reserves the right to file WTO trade suit against the EU regarding their restrictions on palm oil based biofuel imports.
-- Rabobank commodity analysts recently estimated soybean exports from Brazil to China may fall by -15% in 2020 to aorund 45 mln mt. They attributed the potential decline on slowing demand from coronavirus and better US competition
-- Commodity trading sources Thursday said 41,500 mt of domestic origin Soyoil was bought by Egypt's GASC; prices were said to be at $788.44/mt.
-- Ahead of next Tuesday's monthly NOPA soybean crush report, analysts are forecasting the January soy crush at 173.75 million bushels, that would compare to December's crush at 174.81 mln bushels. In the year earlier month the industry group's soy crush was 171.63 mln bushels. The data will be released at 1::00 am CT, Tuesday, Feb 18th.
-- Analysts are forecasting next Tuesday's monthly NOPA January crush report to show 1.780 billion lbs of Soyoil stocks at the end of the month. End of December stocks totaled 1.757 bln lbs, and the year ago month stocks totaled 1.549 bln lbs.
-- Analysts with AgroConsult Thursday pegged their Brazil 2020 soybean export forecast at 73.0 mln mt that is below their 76 to 78 mln mt range previously forecast. The group noted Brazilian soy exports to China are seen slipping to 54 mln mt this year compared to the 58 mln mt in 2019.
-- On Thursday, AgroConsult analysts increased their 2019/2020 Brazil Soybean production forecast to 126.3 mln mt, +2.0 mln mt over their prior outlook
-- On Thursday, AgroConsult analysts increased their 2019/2020 Brazil second season Corn production forecast to 74.7 mln mt, +0.7 mln mt over their prior outlook
-- Analysts with AgroConsult Thursday pegged their Brazil 2020 corn export forecast at 35.0 mln mt
-- Pending Tender: On Wednesday, Algeria's state grain buyer announced they are seeking nominal 35,000 mt of optional origin Corn in a tender to close on Thursday, Feb 13th. The grain is for LH March shipment.
-- Jordan's state grain buyer Thursday announced yet another 120,000 mt of optional origin feed Barley tender. The offer deadline is Feb 19th.
-- Euronext Paris March corn futures on Friday are trading +0.50 euro higher at 168.75 euros/mt
-- Dalian May corn futures on Friday traded -6 yuan lower ending at 1,919 yuan/mt
-- Dalian May soybean futures on Friday traded -49 yuan lower ending at 4,139 yuan/mt; May soymeal futures rose +1 yuan to end at 2,671 yuan/mt
-- Dalian May vegoil futures on Friday traded lower, soyoil fell -74 yuan to end at 5,926 yuan/mt, palm oil lost -76 yuan to end at 5,516 yuan/mt
-- Malaysian April crude palm oil futures on Friday traded +26 ringgit higher ending at 2,651 ringgit/mt
-- Malaysian cash offers for RBD palm oil and olein Friday traded +$2.50/mt higher at $680.00/mt and $682.50/mt, respectively
-- Outside markets. Crude Oil up +73c ; Gold up +60c ; Silver up +6.1c ; US $ index up +8 pts
QT News Cash Markets
Bean Barge Corn Barge SRW Barge HRW Track Ill Riv Frt
12 pros 11 pros
Feb +58/65 H +50/53 H +105/112 H +172/177 H +135/140 H 310/320
Mch +59/62 H +54/56 H +105/115 H +173/178 H +137/143 H 315/325
Apr +47/?? H +54/57 H +110/118 H +170/175 H +138/145 H 325/335
Hi-pro meal Soy oil
Chicago -2 H +16 H +40 H
Toledo +10 H +23 H +15 H
Dec ILL +8 H +18 H -25 K -75 H